Hicks
The United Auto Workers strike against GM, Ford and Chrysler is now a week old, with little evidence of progress towards a resolution. However, it is always difficult to judge the progress of negotiations, so anything could happen between my penning this column and you reading it. While we wait for news from the UAW and the ‘Big Three,’ it is better to reflect on the state of American unions.
Over the past 60 years, private sector unionization rates fell from almost one in three workers to about one in 20. This is a surprisingly complete collapse of something that was an important American institution in the middle of the last century. Today private sector unions are largely peripheral institutions in both labor markets and in politics.
Public sector unions are more important, and fraught with more complexity than private sector union relationships. They are more politically active, and represent a very different set of employees, from sanitary workers to professors and physicians. They also represent about 40% of local government workers and 30% of state workers nationwide.
The cause of private-sector union decline really stems from the fact that union participation failed either to make U.S. firms more productive or to deliver better outcomes to workers. I suspect most of this is due to the antagonistic relationship between employers and unions. That is not the hallmark of nations with more durable unions, such as Germany. But there are other explanations, such as U.S. unions focusing on broader political goals unrelated to labor outcomes for their workers.
There is disagreement among researchers on these issues, but what is not in dispute is simply that unionized firms in the U.S. failed to remain competitive, and so downsized. That act cost union jobs, and made it more difficult for unions to extend their representation to other firms. Despite all the news about the current strike, there is no evidence of a resurgence in the UAW or other industrial unions today.
Over the coming decade, it is certain that there’ll be fewer automobile manufacturing jobs that today, perhaps far fewer. This will happen regardless of the result of the UAW strike. This is a high-stakes labor action by the UAW, but the national consequence of the strike will be far more muted. Even if the UAW achieves all its goals, its membership will continue to languish.
Despite the poor prognosis for the UAW, unionization in the US might see more favorable conditions. We are in the midst of almost unprecedented changes to the nature of work, and there are reasons to suspect unions will find ways to expand their influence. Three types of occupations are especially susceptible to unionization.
The first of these are smaller, boutique occupations, such as the Writer’s Guild. This union represents most TV and movie writers, and a strong organizing effort can yield significant benefits for members. Its membership is currently on strike, and having an effect on the industry. I can imagine several other occupations successfully organizing in the coming years, but these are still represent a small share of workers.
The expansion of remote work also means that onsite workers might find themselves with significantly expanded labor market power. This is especially true in some health professions. I would imagine that nursing, and other allied healthcare occupations are ripe for unionization.
Public sector unions are the most likely to see significant growth. Indiana is a prime example of the growing likelihood of successful organizing. In inflation-adjusted terms, wages for teachers are lower now than they were two years ago. Salaries for state and municipal workers and those at state universities are all lower now than they were a decade ago. I work in a business college where unions would normally be held in low esteem. But, I would be unsurprised if the college today voted to unionize, though I wouldn’t support the move.
Tighter labor markets make it easier for workers to unionize, particularly for lower-wage work. This might be why Starbucks and other restaurants have seen more organizing activities. We also live in an unusual political climate where leaders of both parties are interested in courting unionized workers. This makes it easier for union organizing efforts, even if there’s no fundamental change in the political direction of unions.
Of course, the fact that we might be in a period of increased union activity does not mean the outcomes will be good for workers, bad for businesses or have any economy-wide effect. It would be remarkable if private sector unions ever again approached 10% of the workforce. Even a decade of good news for unions would leave them a shell of their former glory.
The weakness of unions also tempers the effect of anti-union efforts. My research on Right-to-Work legislation, published in the Cato Journal, finds only modest employment effects. Right to Work boosted employment modestly in adopting states, but only when existing unions were strong. The weaker unions are, the less Right to Work matters for the overall economy. Although, if you own a business in a heavily unionized industry, unions are likely to be an unwelcome presence.
There are also factors working against unions. In the modern workplace, it is easier to judge the individual productivity of workers. Highly efficient workers will have less desire to unionize because the goal of unions is to move all workers to ‘average’ wages.
Automation also eases the demand for labor. Most of the lost factory jobs since peak employment in 1979 are due to the automation and digitization of the workplace. There is no slowdown in labor-saving technological expansion. Occupations that are most susceptible to automation are less likely to successfully organize.
The current UAW strike may last for some time, but in the end, it will be far less important than strikes of a half century ago. If unions are to again be a force in the American economy, it will be through the difficult work of convincing workers that union membership is beneficial. Right now, it is difficult to convince workers to pay union dues and risk strikes. There is precious good news for union organizers anywhere. Nothing that happens in Detroit is likely to change that.
Michael J. Hicks is the director of the Center for Business and Economic Research and the George and Frances Ball Distinguished Professor of Economics in the Miller College of Business at Ball State University. Send comments to [email protected].
