jake rosenfeld is a professor of sociology at Washington University in St. Louis. His recently published book is titled You’re Paid What You’re Worth: And Other Myths of the Modern Economy.
Published October 11, 2021
As pretty much everybody who loves —or hates —Amazon knows, workers at one of the company’s warehouses in Bessemer, Ala., voted in May on whether to join a union. Hopes had run high among union supporters: President Biden had publicly backed the initiative, and support for the union even bridged our yawning partisan divide. Organized labor believed a victory would establish a model at Amazon that could kickstart a massive unionization drive among the corporate behemoth’s million-plus work force.
The effort failed —decisively. And while there’s a chance the National Relations Board will force a do-over, unionization will be an uphill battle. But this shouldn’t have surprised close observers of the labor movement in recent decades. After all, other high-profile efforts to organize major Southern workplaces —Volkswagen plant in Tennessee in 2014, a Boeing facility in South Carolina in 2017 —also went down to defeat. The real surprise was that the election occurred at all (since at least 30 percent of eligible employees must go out on a limb and ask for a vote). Compared with earlier years, the number of elections for union representation has fallen drastically.
So, too, has the fraction of workers who belong to unions nationwide. The unionization rate peaked in the 1950s when, for a brief period, about one of every three wage and salary workers belonged to a union. This was also a time when income inequality reached historic lows in the United States, and wage gains for average workers outpaced income gains for those atop the income distribution. Today, by contrast, about one-tenth of American workers are organized, and in the private sector, it’s roughly one in 20.
Maybe unions simply lost their mojo, with U.S. workers turning against an institution older than their grandfathers’ Oldsmobiles —and increasingly associated with the Democratic Party. That’s a conclusion some observers reached after labor’s defeat in Bessemer. But plainly it’s more complicated than that.
When asked in July 2020 by the Gallup organization “Do you approve or disapprove of labor unions?” two-thirds of Americans responded in the affirmative.
When asked in July 2020 by the Gallup organization “Do you approve or disapprove of labor unions?” two-thirds of Americans responded in the affirmative. And recently a team of researchers at MIT put the issue to a more specific test, surveying thousands of workers who did not belong to unions whether they’d be interested in joining one if given the opportunity. Nearly half said yes.
So, what actually happened? Beginning in the 1960s, and accelerating throughout the 1970s and especially the 1980s, employers mounted a frontal assault on organized labor. A growing political coalition of anti-union lawmakers aided their efforts by stymying labor’s attempts to update labor laws that had lost their bite in the face of hostile regulators and outmoded laws. Employers had plenty of other resources to draw upon, too — including a fast-growing collection of consultants and specialty law firms focused on fighting unionization attempts, and a legal landscape in which the paltry penalties for violating the law were well worth it if an employer was intent on remaining union-free.
Well worth it, indeed. New research by MIT’s Anna Stansbury reveals that it pays for employers to break labor laws if the violation tilts the playing field away from organizers by even a trivial amount. As an employer today, if you’re busted for breaking federal labor laws — say, by systematically firing workers you suspect of being union sympathizers — you’ll be on the hook for paying their lost wages, and the terminated employees will have a right to return to their old jobs (should they want them). But that’s it — and only if you are caught. With laws like these, what’s a profit-maximizing employer to do?
With all the well-tried tactics and tools at your disposal, and the laughably small penalties for any legal violations incurred during the drive, it’s no wonder employers would rather fight than switch.
Low unionization rates are in and of themselves another barrier to organization. Should an employer in an otherwise union free industry accede to a successful organizing drive, it bears the costs of unionization alone. Competition from non-union firms will prevent it from passing on the costs in the form of higher prices, and it will have to find comparative advantages elsewhere. The far more attractive alternative, of course, is to smother the organizing campaign in its crib. With all the well-tried tactics and tools at your disposal, and the laughably small penalties for any legal violations incurred during the drive, it’s no wonder employers would rather fight than switch.
What the legal scholar Mark Barenberg has termed “the disintegration of employers” aided anti-union efforts as well. Instead of the “vertical integration” so common in mid- 20th century, in which car companies made their own parts and steel companies made their own iron, firms have created intricate supply chains in which much of the value added of the finished product is outsourced.
The consequences sometimes affect labor in ways you are unlikely to observe. When you stayed at a Holiday Inn for that pandemic hiatus getaway, you probably encountered few actual Holiday Inn employees, if any.
Major hotel chains partner with staffing firms to provide the workers who check you in and tidy up your room while you frolic on the beach. This type of employment “fissuring” is now ubiquitous across major industries.
To the point here: complicated supply chains hinder unionization. At any given link in the chain, the central company can sever its ties to a supplier whose workers have unionized, and welcome in a new non-union one.
It’s worth noting that large vertically integrated companies also had much larger work forces in the golden era of unions. In the early 1940s, some 60,000 workers walked through the gates of Ford Motor Company’s sprawling River Rouge complex in Dearborn daily. And such mega-sites presented rich targets for organizers, given the tens of thousands of potential new dues-paying members. Today, Ford’s total work force at the River Rouge site has dwindled to about 5,500 — and the entire state of Michigan employs fewer than 40,000 auto workers.
Moreover, that’s auto production, where a typical plant still operates with considerable economies of scale and thus is still large enough to employ thousands. But barely a tenth of private sector employees work in establishments with more than 1,000 workers. Going through the arduous process of organizing small firms is expensive, and often beyond the means of unions gambling with their members’ dues.
What about globalization? With the labor movement of the 1950s and 60s anchored within manufacturing, wasn’t the movement’s demise inevitable given the transition to a service-industry-dominated post-industrial economy? And what about automation? Isn’t production-line manufacturing especially vulnerable to job-replacing robotization?
Technological changes have, indeed, allowed employers to automate many processes, leading to layoffs and slower employment growth in sectors that were highly organized. By the same token, increasing pressure from foreign competitors has spurred U.S. employers to search for cheaper labor overseas or in areas of the country where unions have little history and no foothold. As noted above, Boeing’s new plant in South Carolina, where much of the company’s assembly has moved, has rejected unionization.
Labor organizations’ woes aren’t confined to our shores alone. Technological changes spread fast and wide, and globalization is, well, global. Indeed, the economic restructuring of the second half of the 20th century put labor on the defensive across the developed world, as the industries in which unions once flourished shed workers by the millions. But few countries experienced as steep a decline as the United States. Canada’s unionization rate is two and a half times that of ours.
And the pressures undermining unions aren’t confined to industries where the threats of offshoring and automation are real. You can’t send your house to China to have its roof replaced, yet labor organization in construction has fallen by over 60 percent since the early 1970s. In transportation, robots don’t rule the roads — not yet anyway. Nonetheless, while nearly half of our nation’s truck drivers and other private-sector transportation workers belonged to unions 50 years ago, that figure is down to about 15 percent.
Can We Afford Organized Labor?
While unions’ popularity among non-union workers may run high, their popularity among employers has, to say the least, remained very low. Aside from concerns about ceding managerial authority or having to share in company profits, do employers know something the rest of Americans don’t? Are unions a drag on productivity — a relic of a bygone version of capitalism no longer compatible with today’s knowledge-driven economy?
The argument seems good, but only until one looks at the facts. First, plenty of dynamic economies coexist with strong labor movements. In 2019, highly unionized Norway and Denmark’s GDP per hour worked — a measure of labor productivity — exceeded that of the United States. Our nation’s labor productivity was similar to Sweden’s, despite significantly lower unionization rates. Second, studies comparing the productivity of unionized versus non-unionized enterprises in the United States generally find no overall relationship.
A few caveats. Research does indicate that the nature of labor-management relations in the United States has led to sluggish adaptation to economic shocks in key industries, notably, airlines and automobiles. Highly bureaucratized, slow-moving responses to changes in the broader business environment can prove disastrous for a company’s bottom line. If combined with adversarial relationships between labor and management, the business’s woes multiply.
These conditions aren’t inevitable, however. Unions can coexist with dynamic firms if labor understands their fortunes are hitched to the companies’ success. And when management decides it would rather fight a union tooth and nail even if it poisons morale, well, it’s hard to blame the union for the resulting drop in productivity.
Can We Afford Not to Encourage Organization?
The costs of labor’s decline to workers are immense. Decades of research finds that the “union wage premium” — the extra pay a union member receives that a similar nonunion worker does not — averages about 15 percent. And that’s just wages. Strong unions were able to secure generous benefit packages for members, including health care and retirement benefits that for the first time granted millions of working-class Americans the keys to a middle-class living standard.
Former members were not the only ones hurt. A growing body of research finds that non-union workers’ pay is higher in times and places that unions are strong. Prized workers might depart for unionized competitors if the employer failed to match union pay and benefit scales. And if a non-union employer wanted to stay that way, one tried-and-true tactic was simply to offer whatever his or her organized peers had negotiated with their workers.
One prominent study estimates that about a third of the rise in income inequality among private sector men and about a fifth among women is attributable to the collapse of unions in the private sector.
One prominent study estimates that about a third of the rise in income inequality among private sector men and about a fifth among women is attributable to the collapse of unions in the private sector. Another finds that de-unionization accounts for fully 40 percent of the growth in compensation inequality between a median male worker and one in the top-tenth of the distribution.
Researchers working in this area agree on one thing: unions helped transform a certain set of jobs that didn’t require a college degree into “good” jobs. Trucking, meat processing, mining, construction, warehouse work … the list goes on and on. Meanwhile, unions’ disappearance in these industries goes a long way toward explaining how these good jobs reverted to bad.
Despite a long history of racial exclusion and often vicious xenophobia, by the mid-20th century unions had finally begun to diversify their ranks. Four in 10 African-American men in the private sector belonged to unions in the early 1970s, and organization rates for African-American women in the private sector were much higher than among white women. Indeed, by the 1970s, African-Americans were more likely to belong to unions than any other racial or ethnic group.
By no coincidence, the decline of unions hurts African-Americans’ economic standing particularly hard. In an article I co-authored with Meredith Kleykamp, we estimated that if private sector unions had remained as strong today as they were in the 1970s, the typical black male worker would be making approximately $50 more per week. Among women, black-white wage inequality would be 13 to 30 percent lower.
Unions’ collapse has reshaped not only our economy, but our polity too. Unions once served as a vital buffer against political inequality. The highly educated and highly remunerated participate in politics and are rewarded for that participation more than those further down the education and income ladders. Put simply, unless there are countervailing institutions to pull average Americans into politics — and to hold policymakers accountable to their wishes — the voices of vast reaches of the citizenry go unheard. This problem is especially acute in periods of runaway economic inequality (like ours) when elites can easily translate their financial largesse into political power.
Unions once helped to counteract these anti-democratic tendencies. First, unions impressed upon members the stakes of upcoming elections, educating them about issues relevant to workers’ economic interest. And they got their members to the polls: I estimate that union workers are 12 percent more likely to vote than their non-union counterparts.
Second, unions — and union membership — temper white racial resentment. Scholars from the University of Washington and Princeton University found the political socialization that often accompanies union membership lowers racist antipathy among whites and increases their support for policies that benefit all workers. There is just no other set of organizations that operates similarly, and unions’ long-term decline goes a long way toward explaining today’s politics of white racial grievance.
Prospects for Revitalization
Ironically, to many supporters of organized labor, the “original sin” in the nation’s labor management system is contained in the very law that legalized collective bargaining. The National Labor Relations Act, signed into law by President Roosevelt in 1935, protects the right to collective bargaining — but only at the workplace level. That means if you’re an enterprising union eager to organize, say, Walmart, you can’t petition to unionize all of the retailer’s 1.6 million U.S. employees. You have to organize store by store — and there are over 5,000 of them.
Say you succeed in organizing one, or at least part of one, as happened among the butchers in a Texas Walmart back in 2000, the only successful organizing drive at one of its U.S. stores in the company’s history. Did the company cave, accept defeat and stay neutral in other organizing drives at its thousands of establishments? Hardly. Within days, Walmart eliminated the meat-cutting division at nearly 200 of its stores, and just like that, organized labor’s tiny toehold in the nation’s largest private sector employer vanished.
Workplace-level bargaining means the U.S. labor movement is always going to face an uphill battle. In some European countries, by contrast, union heads negotiate with management representatives of entire industries, and the bargaining framework they agree upon extends to all workers in the industry. That’s how a country like France can have a unionization rate about as low as ours and yet a vast majority of its work force is covered by one or another collective-bargaining agreement. In other nations, unions administer key social benefits like unemployment compensation, gaining social legitimacy in the process that bolsters unionization rates.
Even the most ambitious proposals currently being debated in Congress wouldn’t scrap the workplace-level bargaining structure for a new system. That should provide some solace to business interests about the potential changes that would occur if unions and their allies were finally able to update our antiquated set of labor laws.
The U.S. is never going to turn into Sweden. But some change is desperately needed if average workers’ demands for greater protections and higher pay are to be met.
Hence, the U.S. is never going to turn into Sweden. But some change is desperately needed if average workers’ demands for greater protections and higher pay are to be met. The Protecting the Right to Organize Act, which passed the House of Representatives early in Spring 2021, currently languishes in the Senate.
The bill, rightly referred to as the most ambitious labor reform since passage of the NLRA in 1935, would help rebalance the uneven playing field in labor-management relations. Among other important provisions, it would crack down on employer retaliation in union elections (thereby changing the incentive structure for companies facing organizing drives), ban such common practices as mandatory-attendance meetings where employers warn workers of the consequences of unionization, ban the hiring of permanent replacement workers during strikes and widen the range of workers eligible to join unions.
Back to the Future
In the last year and a half, we have discovered how essential many workers we’ve treated poorly for too long are to our collective wellbeing. This celebration of essential workers was long overdue. And as we glimpse the end of the pandemic, we find ourselves at a historic juncture in which the critical nature of our underpaid and under appreciated work force is laid bare. We don’t have to dream of a world in which essential workers are paid well — many of them once were. And we know why: a strong labor movement boosted their pay and served as an important counterweight to unchecked corporate power.
The right thing to do (for labor and the broader society) is to support policies and organizing efforts that will ensure living wages, robust benefits and safe working conditions. Yes, profit margins at some firms might be a bit lower, and the price of that naked chicken chalupa at Taco Bell might top $4. But if the pandemic has taught us anything, these are costs that a just and stable society should be willing to bear.