<p>Strikes last a few days usually or weeks - indicatively per <a href="https://www.euronews.com/next/2023/03/07/industrial-action-in-france-and-the-uk-which-countries-have-the-most-strikes-in-europe" rel="nofollow noreferrer">https://www.euronews.com/next/2023/03/07/industrial-action-in-france-and-the-uk-which-countries-have-the-most-strikes-in-europe</a></p>
<p>the highest national average per 1000 workers in certain European countries is something between <span class="math-container">$50$</span> and <span class="math-container">$150$</span> days, meaning less than a day per worker annually.
On the other hand, a wage increase tends in most cases to stay.</p>
<p>To see that purely income considerations makes a strike really likely, let's consider a greatly simplified exercise.
First, let's think in terms of weeks.</p>
<p>Let <span class="math-container">$W_0$</span> be the weekly wage without a strike and <span class="math-container">$E(W_s)$</span> be the expected weekly wage that the employer is expected to concede after a strike. Let <span class="math-container">$\beta &lt;1 $</span> be the gross discount factor but <em><strong>the weekly one</strong></em>, which is a critical aspect of the situation.
The discounted stream of income without a strike is
<span class="math-container">$$I_0 = \sum_{t=0}^{\infty} \beta^t W_0 = W_0\cdot (1 + \beta + \beta^2 + ...) = \frac{1}{1-\beta}W_0 \tag{1}$$</span></p>
<p>while the discounted stream of income given a strike that will last <span class="math-container">$S$</span> weeks (so <span class="math-container">$S$</span> weeks without income), is
<span class="math-container">$$I_s = \sum_{t={S+1}}^{\infty} \beta^t E(W_s) = E(W_s)\cdot \big[\frac{1}{1-\beta} - (1 + \beta + \beta^2 +...+ \beta^S)\big]$$</span></p>
<p><span class="math-container">$$=E(W_s) \cdot \left[\frac{1}{1-\beta} - \frac{1-\beta^{S+1}}{1-\beta}\right] = \frac{\beta^{S+1}}{1-\beta}E(W_s) \tag{2} $$</span></p>
<p>In terms of discounted income only, a strike gives more if</p>
<p><span class="math-container">$$I_s &gt; I_0 \implies \frac{\beta^{S+1}}{1-\beta}E(W_s) &gt; \frac{1}{1-\beta}W_0 \implies E(W_s) &gt; \frac 1 {\beta^{S+1}} W_0 \tag{3}$$</span></p>
<p>Now comes the crucial aspect that <span class="math-container">$\beta$</span> is a <em>weekly</em> discount factor, so it will be <em>very</em> close to unity.
For example to be consistent with  a yearly <span class="math-container">$\beta_{yearly} = .9$</span> (which is considered a high degree of discounting the future, even for individuals), we must have <span class="math-container">$\beta = 0.9979758875215$</span> looking at <span class="math-container">$52$</span> weeks.</p>
<p>Suppose the strike lasts 1 week so <span class="math-container">$S=1$</span>. Then the strike is beneficial for the workers if</p>
<p><span class="math-container">$$E(W_s) &gt; \frac 1 {(0.9979758875215)^{2}} W_0 = 1.00406054930652 \cdot  W_0 \tag{4}$$</span></p>
<p>This means that even if the expected increase in the wage is just <span class="math-container">$0.5 \%$</span> (namely half a percentage point), the strike is beneficial - income wise. Note that this would be also the overall increase in the yearly income (this percentage does <em>not</em> compound week-by-week).</p>
<p>Considering striking for two weeks <span class="math-container">$S=2$</span>, still does not raise this wage-increase-threshold above <span class="math-container">$1\%$</span>. One needs to consider a strike that will last a month (<span class="math-container">$S=4$</span>) to obtain that one needs to anticipate at least a <span class="math-container">$1\%$</span> increase in the wage for the strike to be beneficial in discounted income terms.</p>
<p>Of course, things in real life are much more complicated -for example, the above exercise implicitly assumes zero probability of being fired/losing employment.</p>
<p>Even if we changed the &quot;infinite&quot; horizon to a two-year one, then we would get that we need an expected wage increase after a one-week strike of just ~<span class="math-container">$2\%$</span>.</p>
<p>The point I want to stress is that, purely income-wise, the situation is inherently &quot;in favor&quot; of going on strike, because even small wage increases make it worthwhile, which also indicates why employers resist even small wage increases (either profit-seeking private firms or budget-constrained public sector organizations).</p>
<p>--</p>
<p><strong>RESPONSE TO COMMENT ON MATHEMATICAL ISSUE</strong></p>
<p>(for <span class="math-container">$\beta &lt; 1$</span>)
<span class="math-container">$$A \equiv 1+ \beta + \beta^2 + \dots +\beta^{S} \tag{a}$$</span></p>
<p>Take <span class="math-container">$(1/\beta)$</span> as a common factor in the right-hand-side,</p>
<p><span class="math-container">$$A = \frac 1{\beta} \left(\beta + \beta^2 + \dots +\beta^{S+1}\right) \implies \beta A = \beta + \beta^2 + \dots +\beta^{S+1}. \tag{b}$$</span></p>
<p>Subtract <span class="math-container">$(b)$</span> from <span class="math-container">$(a)$</span>
<span class="math-container">$$A - \beta A = 1+ \beta + \beta^2 + \dots +\beta^{S} - (\beta + \beta^2 + \dots +\beta^{S+1})$$</span>
<span class="math-container">$$\implies (1-\beta)A = 1 - \beta^{S+1} \implies A = \frac{1 - \beta^{S+1}}{(1-\beta)}$$</span></p>

CC BY-SA 4.0
2023-08-26T13:18:28.027Z
This would be a better answer if you compared the difference between the increase with a strike and without.
H2ONaCl
CC BY-SA 4.0
2023-08-26T17:28:05.697Z
@H2ONaCl $W_0$ can be readily considered as the counter-offer by the employer before the strike. Say current wage is $W_c$ and $W_0 = 1.03\cdot W_c$. The moral will not change because the percentage increases are small in real world situations.
Alecos Papadopoulos
CC BY-SA 4.0
2023-08-26T18:38:50.970Z
"*average per 1000 workers in certain European countries is something between 50 and 150 days, meaning half to one-and-a-half days per worker*" Seems like the lower bound should be one-twentieth of day per worker.
Giskard
CC BY-SA 4.0
2023-08-26T18:41:42.060Z
Your answer explains why getting a small wage increase is worth losing several days of salary in the mid-term. Except for the last, very light paragraph your answer does not seem to address to issue of why the situation develops into a strike instead of a wage negotiation without work stoppage. Essentially it seems to be a mathified version of [BB King's answer](https://economics.stackexchange.com/a/54878/1601)?
Giskard
CC BY-SA 4.0
2023-08-27T12:22:01.510Z
@Giskard Thanks for the correction. On your other comment, my answer provided a quantitative assessment of why the financial motives tend to favor a strike. This is per my long-standing motto "when in doubt, do the math".
Alecos Papadopoulos
CC BY-SA 4.0
2023-08-27T17:00:38.717Z
Doing math is fine, but this is a one sided incentive analysis, it does not answer the core of the question. If you can do the math, why cannot managament, why does it come to an actual strike? In his seminal paper, Rubinstein comes to the conclusion that agreement will always be instantaneous, and IMO he does more math. Should I believe him because of the relative difference in your maths, or should the models also factor into this decision somehow?
Giskard
CC BY-SA 4.0
2023-08-27T17:05:43.317Z
Ps. In your own answer, you write that the national average of striked days per workers per year is less than 0.15 in most countries, but you end your answer with '*the situation is inherently "in favor" of going on strike*'. Do you not feel that something is missing here, do you really feel that you have answered the question?
Giskard
CC BY-SA 4.0
2023-08-27T20:27:01.207Z
@Giskard Such questions cannot be answered by posts, it would take an article or most likely a monograph. Analyzing even one contributing factor to the issue, is my idea of a useful post.
Alecos Papadopoulos
CC BY-SA 4.0
2023-09-26T14:16:30.860Z
Hi @AlecosPapadopoulos. I really enjoyed your answer. Just for my own benefit, I wondered if you could clarify a little of the algebra in step (2), please? In particular, could you clarify why: $$(1 + \beta + \beta^2 +...+ \beta^S)$$ becomes: $$\frac{1-\beta^{S+1}}{1-\beta}$$?
EB3112
CC BY-SA 4.0
2023-09-26T20:04:34.010Z
@EB3112 I included the derivation at the end of my post.
Alecos Papadopoulos
CC BY-SA 4.0
2023-09-26T20:55:13.630Z
Thank you @AlecosPapadopoulos. Very much appreciated
EB3112
CC BY-SA 4.0
2023-08-26T12:48:37.107Z
2023-09-26T18:28:57.410Z
2023-09-26T18:28:57.410Z
Alecos Papadopoulos
<p>Your lose-lose argument only holds in the short-term and the issue is a longer term (dynamic) problem over time.</p>
<p>For both the employees and employers, it can be beneficial to accept a short-term loss, if it translates into a big gain in the long-term (by getting higher wages for workers and the opposite for employers).</p>
<p>Since wages tend to be sticky and not go down, the sum of all long term effect of the entire future (up to the firm’s or worker’s life span) can often easily outweigh the cost of a short-term strike.</p>
<p>Lastly, because of inflation, wages need to be negotiated regularly. So the more often negotiations are needed, the more often you have the potential for strikes.</p>

CC BY-SA 4.0
2023-03-28T06:45:22.633Z
This answer explains why wage negotiations are frequent, but not why such negotiations "frequently" result in strikes, instead of an instant agreement a la Rubinstein.
Giskard
CC BY-SA 4.0
2023-03-28T08:02:00.143Z
“if it translates into a big gain in the long-term” – that's exactly my point: in the long term, money spent on a strike is just _gone_. If the employer (E) is so closefisted that the union has reason to strike, E loses a lot of money on that strike and still more later after having to raise the wages to end the strike. If the union (U) demands wages that E really can't affort, U loses money that the workers will _perhaps_ get back in the short term because the company is forced to overspend, but on the cost of making the company unprofitable in the long run, which costs U/W even more money.
leftaroundabout
CC BY-SA 4.0
2023-03-28T15:00:27.467Z
What makes you think they have to raise wages to end the strike? Many strikes are unsuccessful? A company can lose 6 months worth of revenue on a strike, or raise wages and have higher wage costs for the next 100 years. Often, the cost of 6 months of revenue will be smaller than 100 years of wages, so you roll the dice and try to win.
BB King
CC BY-SA 4.0
2023-03-29T08:14:28.523Z
100 years is silly – but, sure, the company could just refuse to move. It doesn't change the point though: in this case it's the union that is confronted with exactly the same position as they were before the strike, so _if_ it was justified for them to strike in the first place, then the consistent decision would be to not give in but just keep on striking. Of course this can go on only so long – at some point their choice will be between stopping the strike and driving the company into bankruptcy (or to move abroad or whatever). But how is _that_ useful for anyone involved?
leftaroundabout
CC BY-SA 4.0
2023-03-29T12:42:01.797Z
Strikes very often don’t work, so workers very often do not keep on striking practice. Companies that do not give in to strikes don’t always go bankrupt and they profit if they can pay their workers more. So the “choice at some point “ you mention does not really exist always.
BB King
CC BY-SA 4.0
2023-03-28T06:35:22.500Z
2023-03-28T06:43:54.973Z
2023-03-28T06:43:54.973Z
BB King
<p>It is clear that the possibility to go on strike is an effective power asset for employees. However, it is also clear that every strike that is carried out is a lose-lose: the employer loses money immediately, the company gets in a worse economic position which will presumably reduce also its ability to pay wages, and the labour union loses money on paying the employees without any productive activity coming out of it.</p>
<p>So it would seem in everyone's good interest to negotiate in such a way that minimises the number of strikes – those should only be an extreme action, reserved for the odd case every couple of years when the negotiators fail their job to come to an agreement in time. (Which should be especially seldom in the case of big companies, where the negotiators are professionals specialized at estimating how much the opposite party can be made to budge.)</p>
<p>Yet, at least in central and northern Europe, major strikes are a very regular phenomenon. In Germany, the transport sector alone upsets the whole country (yet another lose!) almost annually by going on strike.</p>
<p>Why? What's going wrong there?</p>

CC BY-SA 4.0
2023-03-28T06:43:23.873Z
"*Yet, at least in central and northern Europe, major strikes are a very regular phenomenon.*" Can you please support this claim with a reference?
Giskard
CC BY-SA 4.0
2023-03-28T08:17:02.137Z
@Giskard hm, it's easy to find anecdotal references, but I can't find solid, up to date statistics right now. [Wikipedia quotes a table](https://en.wikipedia.org/w/index.php?title=Strike_action&oldid=1146790709#By_country) that lists five countries with more than 100 days of strike over a period of 5 years for the average worker, which I daresay confirms the premise. It's rather old though (1996-2000).
leftaroundabout
CC BY-SA 4.0
2023-03-28T08:31:02.553Z
Hi! This table does not measure days of strikes per worker, but "*average number of days not worked for every 1000 employees*", so the average day not worked (due to strike action) per worker is less than 0.3 days over 4 (5?) years in all these countries, which are the countries with most strikes 1996-2000 (according to the Wikipedia entry). This seems to *refute* your premise, depending on your definition of the word "often".
Giskard
CC BY-SA 4.0
2023-03-28T09:14:12.827Z
Ah, well that certainly paints a very different picture if, this is how the table is to be read! It definitely doesn't match up with my experience though. Perhaps the question should be refined to “why are strikes so common in the transport sector of central European countries”. But ideally, an answer would pinpoint where the premise holds, where not, and why.
leftaroundabout
CC BY-SA 4.0
2023-03-28T10:17:13.173Z
IMO it would be nice if you were to edit your question to reflect these; i.e. what is it exactly that you expect from an answer and what your assumptions are.
Giskard
CC BY-SA 4.0
2023-03-28T23:19:33.350Z
Arguably relevant: https://en.wikipedia.org/wiki/Myerson%E2%80%93Satterthwaite_theorem
afreelunch
<labor-economics>
Strikes: why so often?
leftaroundabout
# Strikes: why so often?

(Asked by: username_0 on 2023-03-27)

It is clear that the possibility to go on strike is an effective power asset for employees. However, it is also clear that every strike that is carried out is a lose-lose: the employer loses money immediately, the company gets in a worse economic position which will presumably reduce also its ability to pay wages, and the labour union loses money on paying the employees without any productive activity coming out of it.

So it would seem in everyone's good interest to negotiate in such a way that minimises the number of strikes – those should only be an extreme action, reserved for the odd case every couple of years when the negotiators fail their job to come to an agreement in time. (Which should be especially seldom in the case of big companies, where the negotiators are professionals specialized at estimating how much the opposite party can be made to budge.)

Yet, at least in central and northern Europe, major strikes are a very regular phenomenon. In Germany, the transport sector alone upsets the whole country (yet another lose!) almost annually by going on strike.

Why? What's going wrong there?

**Tags:** labor-economics
> **Comments:**
> **username_1**: "*Yet, at least in central and northern Europe, major strikes are a very regular phenomenon.*" Can you please support this claim with a reference?  
> **username_0**: @Giskard hm, it's easy to find anecdotal references, but I can't find solid, up to date statistics right now. [Wikipedia quotes a table](https://en.wikipedia.org/w/index.php?title=Strike_action&oldid=1146790709#By_country) that lists five countries with more than 100 days of strike over a period of 5 years for the average worker, which I daresay confirms the premise. It's rather old though (1996-2000).  
> **username_1**: Hi! This table does not measure days of strikes per worker, but "*average number of days not worked for every 1000 employees*", so the average day not worked (due to strike action) per worker is less than 0.3 days over 4 (5?) years in all these countries, which are the countries with most strikes 1996-2000 (according to the Wikipedia entry). This seems to *refute* your premise, depending on your definition of the word "often".  
> **username_0**: Ah, well that certainly paints a very different picture if, this is how the table is to be read! It definitely doesn't match up with my experience though. Perhaps the question should be refined to “why are strikes so common in the transport sector of central European countries”. But ideally, an answer would pinpoint where the premise holds, where not, and why.  
> **username_1**: IMO it would be nice if you were to edit your question to reflect these; i.e. what is it exactly that you expect from an answer and what your assumptions are.  
> **username_2**: Arguably relevant: https://en.wikipedia.org/wiki/Myerson%E2%80%93Satterthwaite_theorem  

---

## 2 answers

### Answer by username_3 on 2023-08-26. Score: 1

Strikes last a few days usually or weeks - indicatively per <https://www.euronews.com/next/2023/03/07/industrial-action-in-france-and-the-uk-which-countries-have-the-most-strikes-in-europe>

the highest national average per 1000 workers in certain European countries is something between $50$ and $150$ days, meaning less than a day per worker annually.
On the other hand, a wage increase tends in most cases to stay.

To see that purely income considerations makes a strike really likely, let's consider a greatly simplified exercise.
First, let's think in terms of weeks.

Let $W\_0$ be the weekly wage without a strike and $E(W\_s)$ be the expected weekly wage that the employer is expected to concede after a strike. Let $\beta <1 $ be the gross discount factor but ***the weekly one***, which is a critical aspect of the situation.
The discounted stream of income without a strike is
$$I\_0 = \sum\_{t=0}^{\infty} \beta^t W\_0 = W\_0\cdot (1 + \beta + \beta^2 + ...) = \frac{1}{1-\beta}W\_0 \tag{1}$$

while the discounted stream of income given a strike that will last $S$ weeks (so $S$ weeks without income), is
$$I\_s = \sum\_{t={S+1}}^{\infty} \beta^t E(W\_s) = E(W\_s)\cdot \big[\frac{1}{1-\beta} - (1 + \beta + \beta^2 +...+ \beta^S)\big]$$

$$=E(W\_s) \cdot \left[\frac{1}{1-\beta} - \frac{1-\beta^{S+1}}{1-\beta}\right] = \frac{\beta^{S+1}}{1-\beta}E(W\_s) \tag{2} $$

In terms of discounted income only, a strike gives more if

$$I\_s > I\_0 \implies \frac{\beta^{S+1}}{1-\beta}E(W\_s) > \frac{1}{1-\beta}W\_0 \implies E(W\_s) > \frac 1 {\beta^{S+1}} W\_0 \tag{3}$$

Now comes the crucial aspect that $\beta$ is a *weekly* discount factor, so it will be *very* close to unity.
For example to be consistent with a yearly $\beta\_{yearly} = .9$ (which is considered a high degree of discounting the future, even for individuals), we must have $\beta = 0.9979758875215$ looking at $52$ weeks.

Suppose the strike lasts 1 week so $S=1$. Then the strike is beneficial for the workers if

$$E(W\_s) > \frac 1 {(0.9979758875215)^{2}} W\_0 = 1.00406054930652 \cdot W\_0 \tag{4}$$

This means that even if the expected increase in the wage is just $0.5 \%$ (namely half a percentage point), the strike is beneficial - income wise. Note that this would be also the overall increase in the yearly income (this percentage does *not* compound week-by-week).

Considering striking for two weeks $S=2$, still does not raise this wage-increase-threshold above $1\%$. One needs to consider a strike that will last a month ($S=4$) to obtain that one needs to anticipate at least a $1\%$ increase in the wage for the strike to be beneficial in discounted income terms.

Of course, things in real life are much more complicated -for example, the above exercise implicitly assumes zero probability of being fired/losing employment.

Even if we changed the "infinite" horizon to a two-year one, then we would get that we need an expected wage increase after a one-week strike of just ~$2\%$.

The point I want to stress is that, purely income-wise, the situation is inherently "in favor" of going on strike, because even small wage increases make it worthwhile, which also indicates why employers resist even small wage increases (either profit-seeking private firms or budget-constrained public sector organizations).

--

**RESPONSE TO COMMENT ON MATHEMATICAL ISSUE**

(for $\beta < 1$)
$$A \equiv 1+ \beta + \beta^2 + \dots +\beta^{S} \tag{a}$$

Take $(1/\beta)$ as a common factor in the right-hand-side,

$$A = \frac 1{\beta} \left(\beta + \beta^2 + \dots +\beta^{S+1}\right) \implies \beta A = \beta + \beta^2 + \dots +\beta^{S+1}. \tag{b}$$

Subtract $(b)$ from $(a)$
$$A - \beta A = 1+ \beta + \beta^2 + \dots +\beta^{S} - (\beta + \beta^2 + \dots +\beta^{S+1})$$
$$\implies (1-\beta)A = 1 - \beta^{S+1} \implies A = \frac{1 - \beta^{S+1}}{(1-\beta)}$$

> **Comments:**
> **username_4**: This would be a better answer if you compared the difference between the increase with a strike and without.  
> **username_3**: @H2ONaCl $W_0$ can be readily considered as the counter-offer by the employer before the strike. Say current wage is $W_c$ and $W_0 = 1.03\cdot W_c$. The moral will not change because the percentage increases are small in real world situations.  
> **username_1**: "*average per 1000 workers in certain European countries is something between 50 and 150 days, meaning half to one-and-a-half days per worker*" Seems like the lower bound should be one-twentieth of day per worker.  
> **username_1**: Your answer explains why getting a small wage increase is worth losing several days of salary in the mid-term. Except for the last, very light paragraph your answer does not seem to address to issue of why the situation develops into a strike instead of a wage negotiation without work stoppage. Essentially it seems to be a mathified version of [BB King's answer](https://economics.stackexchange.com/a/54878/1601)?  
> **username_3**: @Giskard Thanks for the correction. On your other comment, my answer provided a quantitative assessment of why the financial motives tend to favor a strike. This is per my long-standing motto "when in doubt, do the math".  
> **username_1**: Doing math is fine, but this is a one sided incentive analysis, it does not answer the core of the question. If you can do the math, why cannot managament, why does it come to an actual strike? In his seminal paper, Rubinstein comes to the conclusion that agreement will always be instantaneous, and IMO he does more math. Should I believe him because of the relative difference in your maths, or should the models also factor into this decision somehow?  
> **username_1**: Ps. In your own answer, you write that the national average of striked days per workers per year is less than 0.15 in most countries, but you end your answer with '*the situation is inherently "in favor" of going on strike*'. Do you not feel that something is missing here, do you really feel that you have answered the question?  
> **username_3**: @Giskard Such questions cannot be answered by posts, it would take an article or most likely a monograph. Analyzing even one contributing factor to the issue, is my idea of a useful post.  
> **username_5**: Hi @AlecosPapadopoulos. I really enjoyed your answer. Just for my own benefit, I wondered if you could clarify a little of the algebra in step (2), please? In particular, could you clarify why: $$(1 + \beta + \beta^2 +...+ \beta^S)$$ becomes: $$\frac{1-\beta^{S+1}}{1-\beta}$$?  
> **username_3**: @EB3112 I included the derivation at the end of my post.  
> **username_5**: Thank you @AlecosPapadopoulos. Very much appreciated  

---

### Answer by username_6 on 2023-03-28. Score: 0

Your lose-lose argument only holds in the short-term and the issue is a longer term (dynamic) problem over time.

For both the employees and employers, it can be beneficial to accept a short-term loss, if it translates into a big gain in the long-term (by getting higher wages for workers and the opposite for employers).

Since wages tend to be sticky and not go down, the sum of all long term effect of the entire future (up to the firm’s or worker’s life span) can often easily outweigh the cost of a short-term strike.

Lastly, because of inflation, wages need to be negotiated regularly. So the more often negotiations are needed, the more often you have the potential for strikes.

> **Comments:**
> **username_1**: This answer explains why wage negotiations are frequent, but not why such negotiations "frequently" result in strikes, instead of an instant agreement a la Rubinstein.  
> **username_0**: “if it translates into a big gain in the long-term” – that's exactly my point: in the long term, money spent on a strike is just _gone_. If the employer (E) is so closefisted that the union has reason to strike, E loses a lot of money on that strike and still more later after having to raise the wages to end the strike. If the union (U) demands wages that E really can't affort, U loses money that the workers will _perhaps_ get back in the short term because the company is forced to overspend, but on the cost of making the company unprofitable in the long run, which costs U/W even more money.  
> **username_6**: What makes you think they have to raise wages to end the strike? Many strikes are unsuccessful? A company can lose 6 months worth of revenue on a strike, or raise wages and have higher wage costs for the next 100 years. Often, the cost of 6 months of revenue will be smaller than 100 years of wages, so you roll the dice and try to win.  
> **username_0**: 100 years is silly – but, sure, the company could just refuse to move. It doesn't change the point though: in this case it's the union that is confronted with exactly the same position as they were before the strike, so _if_ it was justified for them to strike in the first place, then the consistent decision would be to not give in but just keep on striking. Of course this can go on only so long – at some point their choice will be between stopping the strike and driving the company into bankruptcy (or to move abroad or whatever). But how is _that_ useful for anyone involved?  
> **username_6**: Strikes very often don’t work, so workers very often do not keep on striking practice. Companies that do not give in to strikes don’t always go bankrupt and they profit if they can pay their workers more. So the “choice at some point “ you mention does not really exist always.  

---

