January 28, 2012

January 28, 2012 | Commentary on Labor

Here's Why Union Membership Keeps Falling

Folks in Springfield, Ill., witnessed a bizarre scene two years ago. Thousands protested outside the Capitol, chanting: "Raise my taxes! Raise my taxes! Raise my taxes!"
Who protests for higher taxes?

Government unions do. The American Federation of State, County, and Municipal Employees helped organize the rally.

This is the new face of the union movement. The Bureau of Labor Statistics reported this past Friday that union rates fell again last year. Fewer than one of every eight Americans now belong to unions.

Of those, most work in the government; less than 7 percent of private-sector workers belong to unions. The Postal Service employs twice as many union members as the auto industry does.

Competition makes it difficult for private-sector unions to survive. During the 1950s, a third of Americans belonged to unions -- during a tightly regulated economy with few international competitors.

Americans could choose to buy expensive union-made cars from Ford, or expensive union made cars from General Motors, or expensive union-made cars from Chrysler.

Deregulation and free trade have since made the economy more competitive, giving Americans more choices. Now Americans can buy from whomever offers the most value. Unfortunately for the union movement, that company is often nonunion.

The auto industry. The steel industry. Trucking. Construction. Unionized companies have fallen behind in industry after industry. This makes organizing new members difficult.

Few workers want their company to wind up like General Motors or Bethlehem Steel. Only one of every 10 nonunion workers tells pollsters he or she wants to join a union. Unionization rates are lower now than when President Franklin Roosevelt signed the National Labor Relations Act in 1935.

Unions remain strong in government because government has no competition. It does not matter how efficiently or wastefully the government operates. Americans must pay their taxes or go to jail.

So in government, unions can raise costs without risking their jobs. The taxpayers must pick up the tab. Government unions have remained strong because of these factors. They now represent two of every five government employees.

This explains why the overall unionization rate fell last year. Union rates did not fall in either the private sector or in government. But while the mostly nonunion private sector created almost 2 million jobs, state and local governments cut spending.

That meant fewer unionized government employees. The strength of the union movement now moves in tandem with the size of the government. This would have surprised the early leaders of the labor movement.

They did not think unions belonged in government. Government unions bargain with elected representatives over how to spend taxes. They thought that made no sense. George Meany, the first president of the AFL-CIO, famously declared that "Bargaining collectively is impossible in government."

Today's union movement has a direct stake in big government, no matter how well that serves the public.

Government unions do not want more efficient government; that means fewer dues-paying union members. Government unions do not want reasonable benefits; they want to retire in their 50s.

Even President Obama believes that schools should remove bad teachers. But education unions disagree. They want their members to have jobs for life, whether or not their students learn to read.

Taxes pay for all this, which explains union opposition to tax relief. It means less money for them. Government unions have lobbied for almost every recent tax increase.

Illinois' union protestors got their tax hike. The Legislature increased the state income tax by two-thirds. Business taxes went up almost 50 percent. Government unions hit the jackpot.

The rest of Illinois suffered. Businesses fled the state, taking jobs with them. Last year, Illinois' unemployment rate increased the most in the nation. They would have done better to follow Wisconsin's example. The government should serve the public, not the other way around.

James Sherk is the senior policy analyst in labor economics at the Heritage Foundation.

About the Author

James Sherk Research Fellow, Labor Economics
Center for Data Analysis

Related Issues: Labor

First appeared in The Washington Examiner