In the world of labor relations, a strike is a useful tool for labor to signal to the company that the union can accept some pain (in the form of lost wages) for longer than the company can lose profits. This is done to achieve some sort of concession like wage or not having children work longer than 12 hours a day. One of the tricks with striking is giving the impression that you could continue striking for another day or week but at the same time not posturing that you will never go back to work, which is not credible. Usually one side backs down when the costs of the strike get close to their best alternative to negotiated agreement (BATNA.)
But what about when the pain is spread out beyond the players in the negotiations? When city workers go on strike and the
garbage doesn't get picked up, there is, uh, collateral damage. When airline baggage handlers go on strike, the customer loses along with the union and the company. The NHL strike hurt the whole sport of hockey.
So how to reduce the collateral damage in these types of strikes?
One answer is to isolate the pain to include just the players at the bargaining table. A "virtual strike" does just this. During a virtual strike, the union keeps working and business stays open, except neither labor or the company gets paid. The union works for free and the company forgoes any profit or revenue, for example donating it to charity or making the service free. Sometimes the money is tucked away and given back when negotiations are successful. The customer remains happy, and both labor and management have incentives to settle. In fact, labor might work even harder because any extra revenue generated bypasses the company, thereby hurting more.
Sometimes the government steps in to offer this as an alternative to regular strikes. If the government is also the management (as in a teacher's strike) this can be a conflict of interest as well.