Are you thinking about going on strike? This way you can budget for your union’s next action: MoneySense

Make your finances safe with early planning

Experts say dealing with a wage disruption takes a lot of planning, and that should start long before your union heads to the picket line.

“A year into our negotiations, it’s time to put some savings aside, just in case,” said Marty Warren, national director of the United Steelworkers union. While no one can predict whether a strike will occur or how long it will last, the more you can stay away, the better equipped you will be to weather the situation.

To help build your savings, Warren has advised union members in the past to work some overtime, if it’s available, and rethink that new car, cottage, boat or house.

“Obviously, if you have one car and it’s running, you need to replace it, but some of those bigger purchases you need to postpone so you can vote with your heart (if your company asks if you’re willing to strike),” he said. “Then your vote won’t be affected because you just bought that brand new truck six months ago and you have a car payment due.”

Adjust savings to protect essential payments

If you’re saving for one of those goals but they’re not imminent, workers can reallocate money to help them get through a strike, says Mark Kalinowski, a partnerships and education specialist at the Credit Counseling Society.

“People often do not see one savings goal as transferable to another savings goal,” he says. “Well, right now it’s not your vacation. This is the time when we have to make sure the mortgage gets paid, so be open to changing what your immediate goal is and we’ll save for a vacation later.”

He believes the best way to build a fund that you can dip into during a strike is to put some money aside every time you get paid, ideally in a tax-free savings account. If you don’t think you’re capable of doing that, consider “cleaning the fluff out of your life,” even if it only takes long enough to build up a strike fund, he said. “Everyone loves a cup of coffee, but if you’re not going to work, can you make it at home? It will save you $3 a day,” he said.

Reduce costs and assess actual expenses

During the COVID-19 pandemic, Kalinowski and his wife calculated how much money they could live on if they covered only basic needs such as food, utilities and housing and child costs. He said they were shocked at how little they needed to make ends meet and encouraged others to do the same if they were worried about a strike.

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While Kalinowski found plenty of ways to cut back on his spending, he recognizes that some people have recurring payments from mortgages, loans, credit cards and student loans. He recommends that people who have these payments pending contact their lenders as soon as possible to find out if they can get extensions or assistance in the event of an impending strike.

“Typically we find that when you approach, especially banks about mortgages, they don’t want to own your house,” Warren said. “They always find a way to work with us or our members, honestly, to delay payment until the end or to make half payment.” Some lenders also allow you to skip a payment.

Strike benefits will not fully replace wages

While workers are not getting their paychecks and are not eligible for employment insurance during the strike, Warren says there is often some cash available that they can access. Normally unions offer strike benefits, but often there are conditions attached. Workers typically only get it if they picket or help with other work, and sometimes it doesn’t take effect once a strike begins.

If they do receive strike pay, Warren said, “There’s no question about it, it’s not equal to your wages. It’s just to help you get ahead,” he said.

When faced with extreme circumstances, many unions have created hardship committees to distribute extra money to their neediest members. Recipients generally must demonstrate extraordinary need when applying for the money. For example, if you need an expensive drug that isn’t covered by your county health care system, a hardship board can give you some money, Warren said.

Frugal living contributes to recovery after a strike

Unions also encourage workers to take on gig work if they are struggling to make ends meet. “If you’re that skilled, you can paint and build a card deck,” Warren said.

While strikes can last a long time, most end quite quickly, he said. If they do, workers don’t get paid for the days they spend on the picket line, so they usually have to focus on recovering from their job action and preparing for the next time their union negotiations take place.

For some people, this may mean continuing to live frugally or postponing major purchases. Others may feel that overwork is the answer.