Labor Day used to be more than a summer-closing holiday; it was a celebration of labor unions and the American labor movement. That’s easy to forget these days because labor unions don’t have much to celebrate.
At the height of their influence in the 1950s, labor unions could claim to represent about 1 of every 3 American workers. Today, it’s 1 in 9 — and falling.
Some have seen the shrinking size and waning influence of labor unions as a sign that the US economy is growing more flexible and dynamic, but there’s mounting evidence that it is also contributing to slow wage growth and the rise in inequality.
Who are these union members?
While union membership has fallen to just 11 percent of US workers, that’s still 14.5 million people — more than twice the population of Massachusetts.
Variations abound when you break the numbers down by race, gender, and geography. There are more union men then union women, and a higher percentage of blacks than whites. Public sector workers are five times more likely to join unions than their private-sector counterparts, and workers in New York are eight times more likely to do so than workers in North Carolina.
Why has union membership fallen so far?
It’s really a tale of two sectors, the public and the private.
Public-sector unions — meaning those that represent local, state, and federal government employees — have been pretty stable. In 1983, about 37 percent of public sector workers were in unions. Today, it is 35 percent.
Private sector unions have been decimated. Their membership numbers fell nearly 60 percent since 1983, partly in response to globalization and partly as a result of various legal changes that have curtailed unions’ ability to organize.
Is it also because of falling support for unions?
Surprisingly, no. Going back to 1985, the Pew Research Center has been asking people whether they have a favorable view of unions. And though the numbers do fluctuate a bit, 40-60 percent of people consistently say they support unions while 35-45 percent say they don’t.
Are unions faring any better here in Massachusetts?
While Massachusetts’s unions are stronger than average, it’s not among the most heavily unionized states. That honor goes to New York, where 1 in every 4 workers belongs to a union. After New York, there are 11 other states with higher union membership rates then Massachusetts.
Here too, though, the decline in union membership over time has been steep.
Does it matter that unions are in decline?
Unions increase the bargaining power of workers, which translates into higher earnings and a stronger voice for employees.
The big, economic critique of unions is that while they may help members, they actually hurt other workers. By interfering with the natural operations of the economy, they push wages above their normal level, heighten inflation, and make it difficult for companies to hire and fire workers as needed.
On the other hand, recent research has traced a direct line between the fall of unions and some of the foremost problems in the US economy, including rising inequality and stagnant wages.
In the simplest terms, as unions have lost power, workers have lost wages. For example, the chart below highlights the widening gap between wages and income, showing that less money is going to workers while more and more goes to owners and investors.
Should I spend Labor Day lamenting?
Of course not. Union or nonunion, everyone could use a long weekend.
But three days off means ample time for fun and reflection. For decades, unions played the leading role in championing the rights of workers. If that era is over, who is left to do the championing? Or can we do without such a voice when globalization, robotification, and other big economic changes are affecting more and more workers?