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. Well...like 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.

What Happens in the Aftermath of the Janus Ruling?

In 2018, all eyes in the labor relations community were focused on the Supreme Court in anticipation of its ruling in Janus v. American Federation of State, County, and Municipal Employees, Council 31. Workers who are represented by a labor union cannot be forced to join a union and pay full dues, but in the absence of a right-to-work law, it has been possible to require them to pay an agency fee (equivalently, “fair-share fee”) to cover the costs of representing them. The question in Janus was whether mandatory agency fee arrangements in the public sector violate an individual’s free speech rights. This is only a question relevant to the public sector because the Constitution only prohibits the government from infringing on speech—there are no prohibitions against a private sector employer limiting an employee’s speech.

The free-speech argument against public sector agency fees is that mandating these payments means that a governmental body is forcing someone who does not belong to the union to subsidize the speech of others (the union) who they don’t agree with. Note carefully that this requires seeing public sector collective bargaining as rising to the level of public expression that enjoys constitutional protections. Opposed to this view is a counter-argument based on seeing collective bargaining as part of the employment relationship, not part of public discourse. So if states want to allow agency fees and prevent free-riding, then this should continue to be within their authority as regulators of the public sector employment relationship, consistent with other precedents in which public sector employees do not have free speech rights when speaking as workers rather than citizens.

When the Janus decision was issued last week, no one was surprised by the verdict: five conservative justices outnumbered four liberal justices in declaring that mandatory  agency fee arrangements in the public sector are unconstitutional free speech violations. This makes the entire U.S. public sector a right-to-work sector in which public sector unions will only be financially supported by union members. As such, this is arguably the most significant Supreme Court ruling affecting labor relations in a long time. It is also a highly-charged decision because Janus and related cases have been funded by conservative political groups seeking to weaken the labor movement as a counterweight to Republicans in the political arena. Indeed, President Trump’s tweet in support of the ruling boasted “Big loss for the coffers of the Democrats!”:

So this case is about much more than individual free speech. But will it be successful in weakening the labor movement?

In the short-term, Janus is likely to reduce the financial strength of public sector labor unions in non-right-to-work states (agency fees were already prohibited in right-to-work states) as nonmembers stop paying dues. Labor unions might also have to spend more time and money fighting additional lawsuits that will likely be filed by conservative groups seeking to get previously-paid agency fee amounts returned to workers. But it might not be all bad news for organized labor.

Some states might take legislative steps to lessen the impact of the Janus ruling. Possibilities include not requiring unions to represent nonmembers in grievance hearings; allowing unions to charge nonmembers for specific services such as grievance representation or arbitration; giving unions time during new employee orientation to meet new workers; making it difficult for anti-group workers to contact workers; and giving union members paid release time to recruit others into the union. It might also be legal for public sector unions to negotiate an agency fee arrangement that includes an opt-out clause allowing objectors to donate their fee to a charity.

At an even more fundamental level, recall that the Janus decision relies on elevating collective bargaining to a level of public speech that is entitled to constitutional protection. Ironically, then, this could bring new levels of legal protection to public sector collective bargaining. For example, state laws that restrict collective bargaining to narrow occupations or prohibit it altogether might be now be unconstitutional violations of free speech. Attempts to legislate further limitations on public sector bargaining, as in the case of Wisconsin, could also be challenged on this same basis. These issues will take years to work through the legal system, however.

So without waiting for favorable legislative or legal action, what can the labor movement do? The labor movement has had several years to prepare for this kind of ruling, and the primary response is to focus on internal organizing. This emphasizes relationship-building with bargaining unit members so that workers feel that they are a necessary part of a vibrant organization that effectively represents their interests. When this is successfully, not only will workers join their union and pay dues, but they will also be more engaged which further creates a more dynamic organization. Janus might also contribute to a feeling among public sector workers that they are under attack, making them receptive to collective action, as was demonstrated earlier this year in the statewide teacher strikes in West Virginia, Oklahoma, and Arizona. So there is the distinct possibility that the labor movement ends up stronger than it was before the Janus decision.

Say What? Employee Empowerment Zones?

Illinois’ new Republican governor, Bruce Rauner, gave his first State of the State address this week, which included the following:

We must also empower voters to decide for themselves whether they want their communities to become employee empowerment zones. These zones will give employees the freedom to choose whether or not they want to join a union. Local communities – local voters – deserve this option so that they can compete with other states and other nations for new businesses and new investment. Employee empowerment zones will increase jobs for residents, increase economic activity for local businesses and generate more tax dollars for local governments.

Say what? Employee Empowerment Zones? For starters, call these what they are: local right-to-work zones. "Right-to-work" is a dubious term in its own right, but it's been widely-used for decades. Right-to-work is the belief that individuals should be able to work without having to join a labor union or pay union dues. The issue of right-to-work is an intense point of conflict between supporters and opponents of labor unions and collective bargaining. U.S. labor law allows private sector unions to negotiate contracts which contain union shop or agency shop clauses requiring all employees to pay union dues as a condition of continued employment. Right-to-work advocates label this compulsory unionism and argue that it violates individual freedoms by depriving workers of their right-to-work, that is, the right to freely choose whether or not to become a union member and pay union dues.

Unions argue that right-to-work is a misleading term used to weaken unions. Since labor law requires unions to represent all employees – members and nonmembers alike, unions argue that it is unfair to allow free-riders to benefit from union representation without sharing the costs by paying dues. Majority rule is also a basic feature of democratic institutions and any dues paying requirements are subject to majority approval.

While federal labor law does not forbid union shop and agency shop clauses, it allows individual states to pass laws prohibiting these clauses (section 14(b) of the Taft-Hartley Act). Such laws are called right-to-work laws and a state that has passed such a law is called a right-to-work state. Almost half of the states are now right-to-work states, primarily in the southern, Great Plains, and Rocky Mountains states (Michigan being a curious exception).

Also, while federal law does not prohibit union shop clauses, the U.S. Supreme Court has determined that paying dues is sufficient – no one can be forced to become a union member even in states without right-to-work laws. The Supreme Court has further ruled that nonmembers can choose to only pay agency fees: money that funds collective bargaining and other representational activities like processing grievances. Nonmembers have the right to object to being charged for activities such as lobbying or helping political candidates. Under federal law, unions have a legal “duty of fair representation” so they cannot discriminate against nonmembers when negotiating contracts and processing grievances, but nonmembers can be excluded from internal union matters such as contract ratification votes and union officer elections.

Right-to-work states often have lower wage levels, on average, than non-right-to-work states. Depending on the time period used as the comparison, they also have higher employment growth rates, or not. Whether these differences are caused by the right-to-work laws or instead reflect other factors such as negative attitudes towards unions is a controversial question with no well-accepted answer. So to claim definitively that right-to-work zones "will increase jobs for residents, increase economic activity for local businesses and generate more tax dollars for local governments" is a stretch.

And even if this claim is correct, what kind of jobs will be created? Stagnant middle class incomes, rising inequality, unpredictable work schedules, lack of basic benefits, and the like have been well-documented. How does further weakening labor market institutions that champion workers empower employees? Finally, it should be pointed out that union shop and agency shop clauses are not imposed by some centralized government or union authority. Rather, they are negotiated into collective bargaining agreements by those "on the ground" doing the bargaining. So wherever they exist, the employer and a majority of the employees agree to their inclusion in some earlier bargaining round. That's empowerment. And if  the current employees want to remove the clause from their contract, they can vote on it via a majority-wins NLRB withdrawal of union shop authority election. That's empowerment.

Three years ago I concluded a blog post by saying that "The bottom line is that debates over the cleverly-named "right-to-work" issue simply serve to further divide us in these already divisive times....Our energy and our resources would be better spent directly tackling the serious issues that we face as a society." Making up silly new names, like "employee empowerment zones," is not the progress that I had hoped to see.

Say What? "There's nothing we can do that is more beneficial for people's freedom and liberty" than a right-to-work law?

In an article in today's Star Tribune ("GOP weighs cost of union battle"), Minnesota State Senator Dave Thompson, a supporter of Minnesota's right-to-work initiative, is quoted as saying about the proposed Minnesota right-to-work law, "In my opinion, there's nothing we can do that is more beneficial for people's freedom and liberty, and creating a better business climate in this state.'' Seriously?


I've already criticized the right-to-work initiative in an earlier blog posting, but let's set that aside. Regardless of what one thinks about right-to-work laws, it's hard to take seriously the claim that there is nothing more beneficial for people's freedom and liberty than whether or not one has to pay union dues. What about freedom of speech? of religion? Freedom from discrimination and hate crimes? Freedom from poverty, or at least enhanced prospects for upward mobility? Or if we focus narrowly on workplace issues, there's workplace freedom of speech, greater anti-discrimination protections, portable health insurance, a right to request flexible schedules, and innumerable other issues that would do more for worker freedom and liberty than a right-to-work law.

And for creating a better business climate in the state? What about greater investments in education and infrastructure? A simplified tax structure? What about lawmakers who can work in a bipartisan fashion to solve difficult problems? Or for starters, what about less divisive political rhetoric that avoids hyperbole such as "there's nothing we can do that is more beneficial for people's freedom and liberty, and creating a better business climate in this state'' than passing a right-to-work law.

Say What? A Right-to-Work?

So-called "right-to-work" laws are again a hot topic of debate. Most right-to-work laws were passed decades ago, but Indiana (Republican) lawmakers hurriedly passed a right-to-work law last week, and Minnesota Republicans are pushing to have a right-to-work law included on the state's November ballot. The conservative perspective was succinctly summed up by a Minnesota legislator launching this initiative: "There is nothing more fundamental to my economic liberty than the ability to obtain employment, feed myself and my family, without having to pay another organization to do it" (Star Tribune, February 3, 2012). Powerful words. But accurate?

U.S. labor law allows private sector unions to negotiate contracts which contain agency shop clauses requiring all employees to pay a fraction of union dues as a condition of continued employment. As captured above, right-to-work advocates label this as "compulsory unionism" and argue that it violates individual freedoms by depriving workers of their right-to-work, that is, the right to freely choose whether or not to become a union member and pay union dues. Hence, they favor right-to-work laws that ban union and agency shop clauses. However, if we take the compulsory unionism argument literally, it's simply untrue. Union shop clauses are unenforceable in the United States, so no one can be forced to join a union against their will.

Yes, it's true that in states without right-to-work laws, workers who are in unionized bargaining units can be compelled to pay some, but not full, union dues. How much? The amount that is calculated as going toward representing workers--negotiating contracts, processing grievances, paying arbitration costs, and the like. Why? Because labor law requires unions to represent all employees--members and nonmembers alike. So unions argue that it is unfair to allow free-riders to benefit from union representation without sharing the costs by paying their fair share. It's also worth remembering that if there is an agency shop clause in a union contract, it's because union and management negotiators agreed to it, and it was approved by management and ratified by a vote of the rank and file. In other words, majority rule is a basic feature of democratic institutions and any dues paying requirements are subject to majority approval.

But what about the argument that right-to-work laws promote economic growth? The data on this can be challenged (see Gordon Lafer's report, for example). Even if we ignore the questionable nature of the empirical record, it is wishful thinking for someone to believe that if a state simply passes a right-to-work law, then economic growth will result. The problem is that even when right-to-work states do experience higher growth, it is difficult to attribute this solely to the right-to-work law. Right-to-work states also have lower business tax rates, less generous workers' compensation and unemployment insurance systems, and anti-union attitudes. There are also geographical differences that affect access to natural resources, transportation costs, and weather patterns. A right-to-work law by itself is not likely to stimulate economic growth. If you don't believe me, take a look at this video. Oh wait, that's me, too.

And a right-to-work law is certainly not going to promote the type of economic growth that we should demand--that is, based on high-paying jobs and respectful, productive labor-management relationships. Where is that right to work? Supporters of "right-to-work" laws typically oppose the right to work at a living wage, or the right to take care of one's family via paid sick leave, or the right to balance work and family by refusing mandatory overtime.

The bottom line is that debates over the cleverly-named "right-to-work" issue simply serve to further divide us in these already divisive times. I shudder to think at what the upcoming months will be like as Minnesotans are confronted with polarizing positions not only on right-to-work, but also on same-sex marriage. Our energy and our resources would be better spent directly tackling the serious issues that we face as a society.