Unions are good, they balance worker interests against corporate interests which benefits society.
On Labor Day and with the UAW strike in the news, there are lots of questions about Unions. This Labor Day is a chance to step back and look at the benefits Unions provide to society. Let’s look at some of the basic questions. Are they good for workers? For the general economy? and for society? Why haven’t more people unionized? We want to look at Union membership, history, and bargaining power in detail.
First, we want to acknowledge some key union wins, SEIU 32BJ, the hospital workers’ unions, UPS workers, and the American Federation of Teachers (AFT) all delivered large pay increases. However, most of the Union news is bad. The UAW and SAG-AFTRA strikes drag on. Workers at Starbucks and Amazon struggle for recognition and bargaining power.
Currently (2022), only 10.1% of workers are members of a union, down from 10.3% in 2021. Union membership has been declining since 1954 when 33% of all workers belonged to Unions. Currently, Union membership is at a historic low of 10%. About 14.3 million workers belong to Unions.
Union membership in the public sector (33%) is about five times as high as the rate in private sector firms (6.0%). Private sector union members are spread throughout the economy but the railroad and airline industries have the highest rates of union membership (41%). The job category with the highest rate of Unionization is Education (35%) followed by Protective Services (34%), which includes Police Officers, Firemen, and Correction Officers. The states with the highest rates of union members are Hawaii (22%), California (16%), and NY (21%) while the states with the lowest Union participation rates were South Carolina (1.7%) and North Carolina (2.8%).
Public opinion polls support Unions and 46% of people would join a union if given the chance
A recent Gallup poll survey reported that 71% of people in the United States had a favorable opinion of unions (Gallup)—60% percent would join a union if the option was available at work. Yet, there is a strong anti-union sentiment among Republicans and near-fanatical opposition by corporations.
58% percent of people see the decline in Unions as bad for the country. Majorities of adults see the decline of union membership as bad for the U.S. and working people (Pew Research Center).
Below is a chart of Union membership trends since 1983. In 1981, President Ronald Reagan fired 12,000 Union air traffic controllers, setting the example of anti-Union practices that followed for decades.
The second chart, from an excellent study from the Congressional Research Service, show Union membership since 1880. This is known as “Density” or the number of workers out of the total worker population that belong to a Union. Union density is defined as the total number of Union members divided by the total workforce. Data from the period of 1880-1983 are estimated using various sources. In 1983 the census started collecting Union membership data. While the US census data is more accurate the downward trend in Union membership does not change.
Let’s quickly look at why Unions have done so poorly, before delving into some history.
Between 1960 and 1980, Unions faced a decline in manufacturing jobs and the movement of jobs to the non-union South. In 1981, President Reagan fired 12,000 members of the Air Traffic Control Union. In 2001 China joined the WTO leading to further outsourcing of manufacturing jobs where Unions were concentrated.
But there is another story. Corporations and conservative politicians became openly hostile to unions. Many states have passed right-to-work laws which sent an anti-union message. Politicians openly opposed legislation supporting Unions. Union could no longer deliver the votes for pro-Union politicians and many Union members were split on social issues. Finally, Wall Street and capital markets demanded higher returns putting pressure on labor costs.
Major Corporations in low-wage, slow-growth industries like retail, food processing, and hospitality are always looking to cut costs. They have consistently lobbied against Union organizing efforts. These low-margin businesses are under tremendous pressure from Wall Street to deliver returns to shareholders. They view workers as a cost rather than an asset.
Corporations have mounted strong anti-union campaigns. Using several different tactics, such as threatening employees with job loss, holding anti-union meetings on company time, and employing an army of anti-Union consultants. They also use sophisticated management tools to control labor costs. They use information technology to manage their workforce hours and scheduling, monitoring tools to force job compliance and gutted Human Resources. Corporations are always looking to reduce labor costs.
In the following chart, you can we the long-term decline in income due to wages. It looks slightly even, but it is distorted by high income earners. The real story is labor income to low-income workers. Income to low-wage workers has actually declined.
The decrease in labor income has resulted in record corporate profits and stagnant wages for workers. Corporate profits have reached the highest level ever and so has CEO Pay. The workers have gotten none of the record profits.
In the US, there is lots of competition in the job market especially at the low end limiting Union organizing efforts. High-income workers have been immune to Union efforts.
The government has been lax in enforcing labor laws. NLRB
The large, fact-based media outlets have been objective when covering unions but have greatly reduced coverage of labor or worker issues. Right-leaning media has been openly hostile to unions and supportive of corporations. Politicians on the left have been supportive of unions but have not passed any pro-labor legislation nor spent government money on enforcing labor laws. Politicians on the right have blocked any federal legislation and support right-to-work laws that weaken union funding and political power.
This is the current labor climate in the US.
*** European example
US Labor History Lesson
Now we want to look at a short history of labor unions in the US To give some context we want to take a quick look at the history of labor organizing in the United States.
We will start in 1950, after WWII, and look at key events in the labor movement. Sadly, for now, we must skip A. Phillip Randolph and the Pullman Porters’ Union.
There are three big events in modern US labor history: The industrial might of the US during and after WW II, the decline in manufacturing during 1970s, and President Reagen’s firing the air-traffic controllers.
By 1950, The US had finished WWII and started to recover. The government, which ran the economy during the war, returned control to corporations. But things were different, every worker and corporate leader had severed during the war. Everyone had sacrificed. The economy was shifting back to producing consumer goods like cars and refrigerators rather than tanks and bombs. There was a huge amount of pent-up demand for consumer goods. The US had the largest intact industrial economy in the world. The economy was largely manufacturing-based. Unions hit peak membership in 1953 when 33% of all workers belonged to a Union. And there was a community spirit of winning the war. However, that spirit did not extend to Black people in the US.
During the 1960s to the 2000s, the US slowly shifted to a service-based economy. Manufacturing moved down South and then offshore as corporations sought lower wages. Education, healthcare and business services grew rapidly. Then in the 1990s, financialization took over. The era saw an explosion in private equity and venture capital firms. Libertarian ideas such as profit was the only goal of a corporation. (Milton Freidman) found new supporters. “Stakeholders” did not matter. The business media championed these financial leaders like Jack Welch with little coverage of the impact on workers. Venture capitalists saw a lucrative opportunity to claw back benefits from employees and workers like pension funds(ever wonder why you have an IRA instead of a pension) in the name of increasing shareholder returns. The final nail in the coffin was admitting China to the WTO ( near zero tariffs on imported Chinese goods) and the rise of mass retailing. Consumers voted with their pocketbooks always looking for the cheapest price.
The government looked the other way. There was intense pressure from corporate lobbyists and “free-market” conservatives to sabotage Unions. They underfunded the National Labor Relations Board
Also, during this period labor Unions were plagued by corruption and discrimination. Some practices continue to this day in the skilled trades.
That is the playing field that unions confront.
Union myths and facts
Unions are corrupt. There was corruption in Unions. And also many efforts to root it out. I love “On the Waterfront.” But union corruption is largely a thing of the past. Unions are governed by democratic principles, unlike businesses. They elect their leaders. Elections are monitored by the NLRB.
Union are inefficient is also a trap. Who gets to define inefficiency?
Unions are only out for themselves. Union workers do not work hard. Again, far from the truth. They do their job. They are skillful and knowledgeable workers who get the job done safely and on time. In many cases, the real issue is poor management. Failure to plan, forecast, and handle resilience under changing conditions. Corporations limit overtime but when a hurricane strikes, they blame the union for asking for overtime.
Union workers are unskilled
Unions are inflexible and against bonuses or merit pay. Poor planning by management and corporations. Their lawyers fight tooth and nail against incentives.
Unions do not care about the company they work for. Nothing could be further from the truth. They know who is paying their salary, the simply want to share in the success. During the 1990s there was a record number of givebacks by unions.
Some Unions were and are still racist. Up until recently, many Unions were racists. Construction unions, police, and fire unions restricted Black membership. There is no Black leadership in many Unions. Blacks and other minorities have had difficulty enrolling in apprenticeship programs.
Unions inflate the cost of infrastructure projects. Over-specialization has hampered projects like the 2nd Avenue subway and Eastside access. However, highways are more expensive than in other countries.
Union corruption is real. But since the modern NLRB and RICO statutes, there is been little union corruption. Unions operate on democratic principles with leadership elected by vote.
Unions act in their own best interests. Not always for the benefit of society
Union resists reform. Teacher unions resist educational reforms. Police unions resist police reforms. Police unions were notably resistant to bodycams. In NYC, the police union has hampered investigation into racial killings such as Eric Gardner.
Some public sector unions could be more efficient such as fire services, EMS and government employees.
However, we do want to spotlight the longshoreman’s union and the brotherhood of locomotive engineers, which both performed amazingly during COVID-19, putting their lives on the line to get you toilet paper.
Unions helped to create the middle class. They reduce income inequality.
Corporations’ myths and facts
Corporations hate Unions.
Unions disrupt flexibility and interfere with business operations.
Sadly, corporations have waged a long, vigorous, and successful campaign against private-sector unions. They view it as a cost of doing business that they can control. They have hired the best anti-union consultants and lawyers to fight unions tooth and nail.
Actually, it is only US companies that hate Unions. Mercedes Benz, Toyota, and other companies all unionized in their home countries.
The media has not been supportive of workers. The NYT fired Steven Greenhouse. They have taken over the moral high ground in the Media after Ronald Reagan broke the air traffic control union strike. Since the passing of the “Wall Street Journal” they have used Fox News to promote anti-union views.
They have lobbied for and promoted an anti-union stance under “right-to-work” laws and against government support for Unions. Right-to-work laws allow free riders on Union contracts. But the real message is we are anti-union. Right to work pits union members against union members.
And they have labeled unions as anti-competitive and inefficient. Meanwhile, they constantly seek to cut labor costs. They seek monopolies themselves.
Interestingly, some corporations like unions. They like the rules, stability and predictability of a union contract.
Unions are good for society.
Unions, in general, are good for society, workers, and the general economy.
They are good for society because they put extra money in workers’ pockets and reduce income inequality. Unions also balance corporate power, in the workplace and in politics. They help balance the power of corporations and promote social justice and worker rights. In addition, Union wages and benefits “spillover” to all workers. They lobby for workers’ rights, better working conditions, and healthcare that benefit all workers.
Unions supported the civil rights movement. The Labor Movement Was a Critical Ally To Civil Rights Movement (NPR) and Unions promoted racial equity (EPI) and African Americans and the American Labor Movement (National Archives). A much more interesting reference is (University of Maryland – Libraries)
Second, Unions support workers, not just with higher wages but with decent and respectful working conditions like the 40-hour work week and pensions. They provide community for workers to empower themselves.
Third, they benefit the general economy because Union members are working class. They spend on staples like food, housing and cars that keeps the economy going. Real consumption drives the economy. Not yachts and private jets.
Unions are different from corporations and consumers. They are a third power group representing workers. Consumers want the cheapest price; businesses want the cheapest labor and unions want higher pay and benefits for workers. An inherent conflict. But the ultimate power broker in the US economy, the consumer, has decided in favor of cheaper prices. Interestingly, economists have estimated the actual cost to the economy of labor unions to GDP? What’s the actual cost? Not much. Estimates are in the 3/10 of 1% or 0.3% range.
The question if Unions are good is really a trap. It may be the wrong question to ask. The real question is how much should workers benefit from our economy?
If you believe workers should share in the benefits of our modern, US economy then Unions are one tool in our toolbox. Along with minimum wage laws, active enforcement of employment discrimination laws, and a basic social safety net. Union membership and power (or lack of) are just a symptom of the larger issue of corporate power in the US. Unions are good for society and the economy. The decline in Union power or worker power relative to corporations, is not good for society. There needs to be some balance or it’s a race to the bottom
But the real answer to why union decline is the decline may be social. Many people place individual wealth above community concerns. And the common good. The average US consumer, who ultimately runs the show, does not care or pay attention to where goods are made, who makes them or who sells them. Business is only responding to customer demand. In most other developed countries consumers care about buying locally and supporting local workers. In the US, consumers look for the cheapest price. And workers and unions have paid the cost.
A Brief Examination of Union Membership Data (Congressional Research Service) – June 16th, 2023 – The best guide to Union membership statistics.
The Bureau of Labor Statistics has a Yearly survey of Union Membership (BLS)
Majorities of adults see decline in union membership as bad for the U.S. and working people (Pew Research Center)