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Labor, Wages & Unions

Labor, Wages & Unions

Unions in Decline

In recent decades, union power has declined considerably. In 1945, union membership peaked at 35% of non-agricultural workers. Today, only 12% of all workers are union members, and if government employees are taken out of the equation, the percentage of the civilian workers that are members of unions falls to 8%.

Economists offer several explanations for this rapid decline of union power. Some argue that company hostility to unions is the main cause. Armed with supportive legislation like the Taft- Hartley Act, large companies have waged a systematic campaign to eliminate union contracts and undercut union influence. Yet other economists argue almost the opposite—that overly aggressive unions are primarily to blame for their loss of influence. In the global economy, unions have hurt themselves by demanding too much from employers that can easily take their jobs elsewhere.

Other economists argue that the changing composition of the workforce is more responsible for declining union membership. Women and teenagers represent a larger part of the workforce than they did 50 years ago. And for many of these, their jobs represent a second or temporary income. Consequently, they are less interested in the long-term employment objectives pursued by unions. Similarly, illegal immigrants, now numbering, according to the United States Census, around 10.4 million adults, are not usually receptive to union organizing efforts.

Some economists argue that the shifting structure of the American economy is more responsible for declining union membership. Unions were well established in heavy industries, like steel and autos. But those represent a far smaller part of the economy than they did a half century ago. Far more jobs are being created in the service sector, which has proven resistant to union organization.

Finally, some economists suggest that since government has taken over some of the roles filled by unions in the past, union membership is less essential to workers. Congressional mandates addressing workplace discrimination and conditions, and establishing protections for family and medical leave, have addressed some of the worker concerns that formally led workers into unions.

Clearly, the workplace and the workforce are changing. The growth of the service sector, the decline of heavy industry, the reduction of union power, and the expansion of government involvement all signal a fundamental transformation in the American economy.

Why It Matters Today

In the private sector, unions have experienced 55 years of fairly steady decline. In the public sector...not so much.

While unions have lost ground in most industries, public employees unions have grown larger and more powerful in recent decades.

People are split on whether this growth is a good thing or a bad thing.

Those who argue against unions cite the negative effects of collective bargaining: federal employees now make more money for the same type of jobs than their counterparts in private industry. While the private sector has shed some eight million jobs in the recent recession, employment in the public sector has grown, and those workers often have generous state-funded pensions that could lead to budgetary woes in the long run. Some argue that higher costs associated with unionization might make the United States less competitive in the global market.

On the other hand, union membership still serves a valuable purpose in ensuring that workers are being paid and treated fairly. Democracy is all about participation, and unions give employees a voice in the decision-making process. Additionally, there's evidence that a high level of union participation doesn't necessarily mean less growth. In fact, prior to the global recession, some of the countries with the highest growth rates also had some of the highest rates of unionization.

As someone who will eventually be a worker and a taxpayer (if you aren't already), this discussion affects you. What do you think? Are employee unions merely working to ensure a decent living for their members, or are they imposing costs that the states and federal government can't afford to bear?

Sometimes, a Skit Says it Better: Saturday Night Live does a skit on public employee benefits

Saturday Night Live’s discussion of unions and pensions:

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