Saturday, January 12, 2019

The State of Organized Labor in the U.S.: An Abbreviated FAQ

This past week I had the pleasure of speaking about the current state of labor relations to a local community group. It was great to see their interest in the topic, and the audience asked many good questions and had numerous important observations. I wasn’t sure how to structure my presentation, but they had provided me with a list of possible questions so I decided to approach it like a “State of Organized Labor FAQ.” Here are some highlights:

1. How many union members are there in the United States? What is the trend is union density (the fraction of workers who are union members?

We can answer these questions by this graph I’ve constructed:

The total area shows the number of union members. While less than its peak membership 45 years ago, there are still a lot of union members in the United States (over 14 million, roughly even split between private and public sector workers). Trends in union density (the fraction of workers who are unionized) are indicated by the blue (private sector) and green (public sector) lines. There is a clear divergence in these two trends over the past 50 years. Specifically, public sector density has been relatively stable at around 35 percent for a couple of decades, while private sector union density has been falling since the 1950s, and now stands around 6.5 percent. Comparing the red area with the blue line, we can that the decline in union density is less about losing members and more about failing to keep pace with employment growth.

[Update: On January 18, 2019, the Bureau of Labor Statistics released its annual statistical report on union membership. For 2018, total union membership is 14.7 million, with density rates of 6.4 and 33.9 percent in the private and public sectors, respectively.]

2. Why has union membership declined, or not?

Again, looking back at the graph, union density decline is a private sector issue. By why? For starters, note that the decline in private sector density started way back in the 1950s. So this is a long-term issue which likely reflects a combination of factors, and we can’t blame recent things (even as far back as President Reagan’s firing of the air traffic controllers) for the entire decline. Commonly-cited factors include structural change (e.g., decline of manufacturing, demographic shifts, globalization), decreased demand for union representation (e.g., laws and paternalistic human resource management provide some of the protections that unions provide, or unions have failed to keep up with what workers want), and most controversially, employer opposition (legal and illegal). In the final analysis, it’s likely to be a combination of these factors.

But why the stability in public sector? That sector has also experienced demographic shifts (making it a less satisfactory explanation for the private sector decline), but the economic shifts have been less pronounced in this sector (e.g., the decline of manufacturing is purely a private sector issue). Moreover, robust union density in the public sector also seems to undermine demand-based explanations for the private sector decline. But due to differential norms and an inability to shift much of public sector work (e.g., schools need to remain in their district), there might be less scope for union opposition by public sector managers. This might be a key reason for the difference in the private and public sector trends.

3. Is it imaginable that the software engineers in Silicon Valley could be unionized?

Sure. There are many independent-minded skilled workers who are unionized, such as airline pilots, university faculty, and lawyers. Actors and professional athletes are also unionized. And the recent walkout among Google employees to protest Google’s handling of sexual harassment indicate that collective action is one strategy these workers are already using.

4. Has immigration (documented and undocumented) been a plus or minus or a zero for unions?

Yes. Wait a minute, which is it? This isn't a yes or no question. many other things in labor relations, it’s complicated. There are cases in which immigration can be bad for organized labor, whether because of desperate workers willing to work for less, immigrant workers who are fearful of being deported and therefore don’t want to make waves, prejudice against immigrant workers by union leaders or members, or other reasons. But there is another side to this story. Many immigrants to the United States come from cultures that are more collectivist and less individualistic than in the United States, and shared experiences of living and working together in specific neighborhoods and jobs can provide a strong sense of solidarity. Indeed, in Minneapolis, CTUL has been very successful in building collective power among janitors and other low-wage workers, many of whom are Latinx, Somali, or members of other non-majority groups, and Somali workers recently forced Amazon to negotiate with them. We should not dismiss immigration as entirely a negative for the labor movement--indeed, quite the contrary. 

5. Do unions make their firms or industries less productive and hence less competitive? Do unions put firms out of business?

A common stereotype about unions pertains to extensive, restrictive work rules, which might reduce productivity. But once again, there is another side to the story and there are ways in which unions might increase productivity (e.g., workers protected by a grievance procedure might feel empowered to speak out about work practices more honestly than nonunion workers). What happens in practice? Everything. In some cases, unionized workplaces are less productive; in other cases, it’s the reverse, or in some cases there aren’t meaningful differences. So it’s really about the nature of any particular situation. Moreover, from a pluralist perspective in which unions are necessary to better balance an otherwise unequal employment relationship, unions are not intended as productivity-enhancing devices so this should not be a major element on which they are judged.

In terms of whether unions put companies out of business, that too is always a complicated story. Sometimes a strike might prove to be the final straw, but there could have been business-related problems for a longer period of time. In the 1990s in the Twin Cities, Country Club Markets closed after a strike, but there were many factors at play, including a lack of investment back into the business. Indeed, it’s not in a union’s self-interest to systematically put companies out of business, and research does not find that unions destroy firms.  

6. Can unions engage with younger workers?

Yes. In fact my own research suggests that we overstate the labor movement’s lack of connections with younger workers. For details, see my blog post on unions having more younger workers than they think.

7. Where is Jimmy Hoffa buried?

Envision here a picture of the end zone at Giant’s Stadium in New Jersey. But of course I don’t have an answer to this, but given that some people in audience grew up in Detroit, I thought this would be funny to throw in. Moreover, it gave me the opportunity to point out the following. In response to some union corruption (which it’s important to not overstate), the Landrum-Griffin Act was passed in 1959 and essentially has the philosophy that requiring greater disclosures and transparency among unions will prevent union fraud (it’s harder to commit fraud when others can see what’s going on). Sounds sensible, but it took lawmakers until 2002 to treat companies in the same way (that is, Sarbanes–Oxley has essentially this same underlying logic). Seems like a big double-standard. In contrast, what I often emphasize is that unions are like other private, public, and nonprofit sector organizations: most are effective, most are good, but a small number are not. The same can be said for leaders of unions, businesses, public sector agencies, and non-profits. Unions should not be singled out, especially when it comes to corruption or other negative behaviors.

8. Why the controversies over right-to-work laws, free riders, and agency fees (fair share fees)?

Misleading named, right-to-work laws prevent unions from negotiating contract clauses that require workers from paying any union dues, even though the union has a legal obligation to represent them. Most right-to-work laws were passed in the 1940s and 1950s. But the issue sparked back to life around 2012 when a number of Republican governors and state lawmakers began championing laws in states with traditionally strong labor movements, such as Wisconsin and Michigan. Debates over right-to-work laws are very divisive, with proponents arguing that they are necessary to protect individual liberty and opponents countering that the true goal is to weaken unions. The controversies have become amplified because it now really more of a political issue than an economic one, with some conservative strategists being bold in revealing their desire to destroy the Democratic Party. In addition to state-level legislative initiatives, there has also been a paired movement to achieve right-to-work through the courts--a movement that achieved success when the Supreme Court made the entire public sector a right-to-work jurisdiction with its 2018 ruling in Janus v. American Federation of State, County, and Municipal Employees, Council 31. Though in the longer-run, this Janus decision could actually make unions stronger

9. Is labor relations still relevant.

YES! See my blog entry on why students should study labor relations. Or my posting on why HR-OB still needs IR

And finally, in my presentation I emphasized what I have long emphasized: to really understand labor unions (and many other employment-related things), we need to appreciate different frames of reference. These provide competing lenses through which one can evaluate labor unions in very different ways. That’s essential for understanding, and for evaluation.

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