Industry Market Trends

The State of the Labor Union

Feb 18, 2013

Around the middle of the last century, labor unions represented about a third of all American workers. Since then, the U.S. labor movement has undergone major changes, particularly in recent years, not the least of which has been shrinking membership.

Last year, the dwindling number of American workers belonging to labor unions fell sharply further, by nearly 400,000 members, even as the nation's overall employment rose by almost 2 million net new jobs. In 2012, the percentage of employed workers in unions fell to 11.3 percent, down from 11.8 percent in 2011 and, over the longer term, 20.1 percent in 1983. The latest drop brought unionization to a 97-year low, the New York Times reported last month, citing a study by two Rutgers economists.

Today, there are 14.4 million wage and salary workers belonging to labor unions in the U.S., according to data reported by the U.S. Department of Labor's Bureau of Labor Statistics (BLS) in January.

Overall, the portion of public-sector workers in unions (35.9 percent) is more than five times higher than that of private-sector workers, whose union membership rate fell from 6.9 percent in 2011 to 6.6 percent last year.

Based on the BLS data, organized labor's latest annual slippage was particularly acute in two groups where unions have historically been strong: manufacturing workers and local government employees.

Manufacturing Staves Off Unions in Post-Recession

In the nation's manufacturing sector, the percentage of employed workers belonging to unions fell from 10.5 percent in 2011 to just 9.6 percent last year.

Labor unions have declined in membership for years as the manufacturing industries that supported union jobs have receded. Yet, even as American manufacturing bounces back from the last recession, the sector's union membership base dwindles further.

While the number of workers employed in manufacturing grew by about 340,000 last year, The American Prospect recently noted, the number of unionized manufacturing workers declined by roughly 86,000, reflecting a manufacturing recovery that is largely bypassing unionized workers

"U.S. manufacturers have added a half-million new workers since the end of 2009, making the sector one of the few bright spots in an otherwise weak recovery. And yet there were 4 percent fewer union factory workers in 2012 than there were in 2010, according to federal survey data," the Washington Post recently reported. "On balance, all of the job gains in manufacturing have been non-union."

Even as non-union manufacturing employment expanded by 6.5 percent between 2010 and 2012, unionized manufacturing employment continued to plunge during the same period, falling another 4.7 percent, according to the Heritage Foundation last month.

"This continues a long-term trend. Non-union manufacturers employed just as many workers in 1977 (12.5 million) as in 2012," the right-leaning think tank explained. "During that same period, unionized manufacturing employment fell from 7.5 million to 1.5 million - an 80 percent drop."

U.S. manufacturing now directly employs almost 12 million workers and is expanding employment for the first time since the mid-1990s. Yet those gains pale in comparison to the nearly 6 million U.S. manufacturing jobs that vanished from 2000 to 2010. In 2008 and 2009 alone, the nation's manufacturing sector lost 2.2 million jobs.

Certainly, advancements in technology, production efficiencies, and global market forces have created systematic challenges for U.S. factory workers and labor unions.

"While the country's manufacturing output continues to grow steadily, it no longer produces significant job growth," Adam Davidson, co-founder of NPR's Planet Money podcast and blog, recently wrote in a New York Times Magazine column. "Factories compete against low-wage foreign labor by investing in automated machinery and implementing new techniques - like the aptly named Lean system, which focuses on efficient work flow - to make them far more productive."

Right-to-Work Laws Curb Union Power

In addition to inexorable economic forces, however, government action is also partly responsible for the decline of American unions, labor leaders and liberal economists say.

A 2012 paper from the Center for Economic and Policy Research (CEPR), a left-leaning research firm, compared unionization rates in the U.S. to rates in Canada -- the author, Kris Warner, wrote that as a nation, Canada "is probably more like the U.S. than any other - economically, socially and politically." Between the 1920s and 1960s, both countries saw similar unionization rates, thanks to changes in labor law and the growth of industries ripe for organizing, such as automotive manufacturing. But around 1965, the two countries' paths diverged; union membership held steady in Canada but plummeted in the U.S.

Warner explained at Bloomberg last month that the biggest reason for the two nations' contrasting fates has to do with labor laws, citing card check and contract arbitration as key policy differences between Canadian and U.S. union-friendliness.

Moreover, there is no Canadian equivalent of the so-called "right-to-work" laws that have been enacted in 24 U.S. states. In practice, it isn't clear how much these laws hamper unions, although evidence suggests that such laws have some impact on union membership.

"Almost half the union member losses in the last year were in the industrial Midwest - Indiana, Wisconsin, Ohio and Michigan..." CNBC reported in January. "Indiana passed a so-called 'right-to-work' law in February 2012, making payment of union dues voluntary for workers. Wisconsin passed severe restrictions on public sector unions in 2011, but it was blocked by the courts for part of 2012. Ohio also passed curbs on public sector unions in 2011, but it was overturned by referendum the same year. Michigan last month passed a right-to-work law that has not yet taken effect."

Although unions are still legal in right-to-work states, adoption of the measures curbs unions by sapping their finances, as workers can opt out without paying fees and still receive union-negotiated benefits and protections.

Meanwhile, organized labor has developed something of a national image problem in recent years. In a 2012 Gallup poll of more than 1,012 Americans, a slim majority -- 52 percent -- said they approve of labor unions, up only slightly from the all-time low of 48 percent in 2009. Americans had been far more approving of unions before 2009 than they have been in the last few years. Gallup first asked Americans whether they approved of labor unions in 1936, at which time 72 percent approved.

Even as U.S. manufacturing makes a comeback after shrinking for years, unionized jobs so far aren't. Labor unions are already an endangered species in the U.S. The question now is, will they become extinct in the 21st century?

"If unions are going to have any chance of reversing course -- and it's not obvious they can at this point -- they'll need to win back the public and break into markets where they've been effectively shut out," The Atlantic recently posited. "[T]he reality is that local unions won't be going cold turkey. The effects of right-to-work laws appear to unfold gradually and at the margins. ... And if the spread of these statutes ultimately forces unions to make the case for themselves more effectively, it may go some ways toward restoring the public's decayed trust in them."