Why Union Membership is Declining

COMMENTARY Jobs and Labor

Why Union Membership is Declining

Feb 1, 2013 3 min read

Research Fellow, Labor Economics

As research fellow in labor economics at The Heritage Foundation, James Sherk researched ways to promote competition and mobility.

Would you want to work for an employer who ignores your contributions? What about one who only promotes on seniority? The answer to these questions explains why union membership keeps falling: unions have not adapted to the modern workplace.

Collective bargaining means one contract covers everyone. Such contracts do not reflect individual contributions. Instead unionized companies typically base promotions and raises on seniority, not merit. Unions designed this system for the industrial economy of the 1930s.

Today's knowledge economy looks quite different. Machines and computers automated many of the rote tasks of the industrial age. Most employers today value employees for their skills and abilities - "human resources" - instead of seeing them as interchangeable cogs on the assembly line. Employees also expect to be rewarded for what they bring to the table.

Collective contracts make that challenging, especially when unions fight against individual recognition. In 2011 Giant Eagle grocery stores gave several employees in Edinboro, Pa., raises. United Food and Commercial Workers Local 23 promptly sued, arguing their contract prevented the company from awarding individual pay increases. The courts agreed and ordered Giant Eagle to rescind the raises. Local 23 wanted everyone to make the same amount, no matter how good they were at their job.

Many unions share this attitude. Sen. Marco Rubio, R-Fla., introduced legislation to allow unionized employers to give performance-based raises. These pay increases would come on top of union wages. Unions nonetheless denounced the proposal. SEIU President Mary Kay Henry objected that the bill would allow "arbitrary" wage increases. The Teamsters derided it as a "bosses' pet" bill. This attitude alienates many potential union members.

In the past unions offset such concerns by negotiating higher pay for everyone. In today's competitive economy, they no longer can. If unions raise labor costs, consumers can shop elsewhere. Unions that insist on uncompetitive wages wind up like Hostess's Bakery Union - with unemployed union members. Consequently, studies find unions do not raise pay at most newly organized companies.

Without being able to offer higher pay, unions have to sell workers on the value of collective bargaining itself. But that has proven difficult. The government already requires employers to provide employment protections like safety standards protections and overtime rates. Polls show that most workers feel their employer respects them. Unsurprisingly, polls also show that only one in 10 non- union workers want to join a union.

This makes it difficult for unions to organize enough new members to replace those lost to bankruptcy. Union membership has steadily declined over the past two generations. Today just 11.2 percent of employees belong to unions, fewer than when President Roosevelt signed the National Labor Relations Act in 1935. The private sector figures are even lower - just one in 15 private employees hold union cards.

Unions only remain strong in the one sector of the economy that faces no competition: the government. Government unions do not have to organize new members to replace those lost in bankruptcy. The government does not go out of business.

Unions do not need to persuade new government employees to unionize either. Once formed, unions remain certified indefinitely without standing for re-election. New employees hired afterward are compelled to accept union representation.

Consider New York Public schools. No one currently teaching in New York voted in the 1961 union organizing election. Yet the United Federation of Teachers represents every teacher in the district to this day.

This dynamic keeps unions strong in government even as they faded elsewhere. Today, most union members work in government. The U.S. Post Office employs twice as many union members as the domestic auto industry.

This explains why unions so strongly support higher taxes and more government spending - they directly benefit from bigger government. It is hardly surprising that government unions organize rallies like the one they hosted in Springfield, Illinois. There government employees protested outside the state capitol chanting "Raise my taxes! Raise my taxes! Raise my taxes!"

Few workers outside government feel that way.

The union movement needs to adapt to the 21st century workplace. That means replacing their one-size-fits-all collective bargaining model with a focus on creating value for employees and employers.

A new union movement could offer workers needed services like job training, networking opportunities, and advice on managing 401(k)'s. Instead of an adversarial relationship unions could help employers tailor compensation packages and work hours to their employees' needs.

Such unions would attract far more support than ones which go to court to block pay increases for their members. If unions want to reverse their membership decline, they need to become relevant to today's employees.

-James Sherk is a senior policy analyst in labor economics at The Heritage Foundation.

First moved by The McClatchy-Tribune News wire.