Those of you who follow Timyan Bank Alert closely know that I'm on a tear about unionized banks in the US.
Evaluating Amalgamated and AmeriServ's respective performance in the context of unionized banking has me seeing the recent Wells Fargo branch unionization in an entirely new light.
Disclosure: As of this posting, I own shares in ASRV, CNAF, and WFC, and may subsequently either dispose of them or purchase more.
A Brief History
| There have been three waves of bank unionization in the US. Interest in organizing in the industry appears to surge every 50 years. 1st Wave (1920s) At least 50 of our nation's oldest banks were unionized from the start. Of these, only three remain, but all can be said to be performing well.
2nd Wave (1970s) Three banks were unionized during the second wave. None are exemplary performers.
3rd Wave (2020s) Two recent labor organization successes suggest we are in the third wave of bank unionization. So far, Beneficial Bank has performed poorly since unionizing in 2020. How the Wells Fargo branch unionized in 2023 will perform remains to be seen. Is a third predictable, based on prior waves?
See also: Infographic: Unionized Banks in the US |
Takeaways
| There's a case to be made for increasing Union Ownership in US banks. Generally speaking, unionized banks that were both founded by unions and maintained significant Union ownership have performed much better than their peers. Four of the aforementioned unionized banks boast Union Ownership — the old-schoolers, plus 70's newcomer Union Bank and Trust:
The average ROA and ROE for these four banks are 1.2% and 18.3%, respectively, vs 0.4% and 6.0% for the two publicly traded peers that don't feature notable Union ownership (i.e., CNA Financial and AmeriServ). It's not surprising today's bank tellers are expressing interest in organized labor. Frankly, many tellers are being financially exploited — and at the expense of taxpayers. The US Bureau of Labor and Statistics indicates as much as 35% of America's bank tellers are making less than $15/hour. According to a recent Axios article about labor organization efforts at Wells Fargo, as many as one in three bank tellers relies on some form of government assistance.” Bank profits are high enough that banks can afford to pay their workers a living wage, and societally, we should be expecting, encouraging, and if needed, requiring, them to do so. There's no need and no excuse for US banking to be operating as a government-subsidized industry. There's a case to be made for encouraging Teller Ownership in our banks. Financial stewardship and fiduciary thinking are mindsets crucial to the DNA of a strong banking system. A bank that doesn't care about the financial well-being of all its stakeholders isn't a world class bank. There's literally no bank in the nation that can't afford to gift some shares to every employee, getting them truly vested in the bank's performance. |
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