The Demise of Unions and Why We Need to Revive Them

Stephen H. Unger
September 11, 2013

Consider the following scenario. A branch of Simpson Supermarkets advertises an opening for a sales clerk, at $10/hr, in one of its Brooklyn stores. Joe Hyde is interested and comes to the store for an interview with the manager. After a brief discussion, the manager offers the job to Joe. Joe says he would be happy to accept, but he wants $14/hr. The manager raises the offer to $11, Joe says he'll go down to $13, and they finally agree to make it $12. Maybe this negotiation could have occurred in some parallel universe, but no way would it occur in the one we reside in.

As an isolated individual, an applicant for such a job has no leverage that would enable negotiation with even a small corporation. In today's real world Joe could either accept the job at the specified pay rate or turn it down--no bargaining. The story might be different if there were a shortage of workers. But, as will be made clear below, there are powerful mechanisms that make this very unlikely. If there were a union, Joe would still have the same take-it-or-leave-it choice, but the pay offered would almost certainly be significantly larger, as a result of negotiations between the union and the company.

American workers today, in all categories, ranging from well educated, highly skilled professionals, to unskilled, poorly educated people have, for several decades been receiving steadily diminishing shares of the national income. One reason, which is the principal subject of this essay, is the near elimination of labor unions as an economic and political force. The other is the fact that there is a surplus of workers in the US in virtually every category. Let's first look briefly at the reasons for this surplus.

The role of technology

Technology is a major factor in the elimination of jobs. One bulldozer operator can replace many workers with picks and shovels. Many tedious, repetitive tasks, and some that are hazardous, have been relegated to machines. The number of person hours that go into the production of an automobile, for example, has been greatly reduced by automation.

Automated telephone switching systems have made possible our worldwide telephone network without requiring that a large proportion of the population work as telephone operators. Some highly skilled jobs, such as controllers of processes in steel mills, have also been automated. Sadly, instead of benefiting from technological progress over the past several decades, large numbers of people were vocationally displaced. No effort has been made to compensate them for their loss [Unger- Benefits].

In some cases, automation has transferred work to consumers. A clear example is the maddening telephone trees that we often have to navigate in order to deal with some simple matter, perhaps concerning an insurance policy.

Import workers--export jobs

A classic method used by American employers to lower wages is the importing of workers from low-wage countries. This was done from the start of the industrial age, as textile workers were brought in from Europe to replace the original American workers who were demanding higher pay. Railroad construction during the nineteenth century was heavily dependent on workers brought in from China and Ireland, who were willing to work hard for very little pay. Companies usually claim that they can't get enough Americans to do the work. What that means is that not enough Americans were, or are, willing to do the work, under third world conditions, for the low wages offered.

Today, workers are brought in from low-pay countries in several ways. One is via a "guest worker" program, in which workers are brought in, for a limited time, to fill such jobs as crop harvesting or computer programming. A second way is to admit workers from the same countries as permanent residents, or as prospective citizens. A third way is to encourage illegal immigration. Note, for example, that about half of all hired agricultural workers are here illegally, and about a quarter are guest workers.

During the past several decades, an additional approach has been used to create worker surpluses. This is to export American jobs to low-pay countries. There are two varieties of this method, both of which involve shutting down factories and research and development facilities in the US.

In one version, US corporations establish their own overseas facilities in low-pay countries. In the other version, US companies contract to have their products manufactured by indigenous companies in low-pay countries.

Both schemes benefit US corporations in several ways. They obtain products at much lower costs in wages. Other production costs are also reduced, since factories in China, and in many other countries, externalize costs by using methods that abuse the environment in ways not legal in the US. Furthermore, by decreasing the number of jobs available to US workers, they force US workers to compete for the remaining jobs by accepting lower pay and degraded working conditions. I have written in more detail about the points mentioned in this section [Unger-immigration][Unger-Jobs][Unger-Americans].

Yet another way in which a worker surplus is created is to impose longer work weeks. This reduces the number of workers needed. Note further that, if hourly pay rates are cut, many people have to take on second or even third jobs in order to make a living. This, in effect, further increases the number of available workers. (There is a counter effect in that some people will not accept a job if the pay rate is too low.)

What unions can do for workers

In addition to the surplus of workers with respect to jobs, the fact that fewer than 7% of private sector US workers belong to unions goes far to account for the current lowly status of American workers. Good unions help workers in several ways. The most obvious is by negotiating labor contracts that increase pay, and improve benefits and working conditions for union members.

Unions also help workers not in unions. E.g., if a company is unionized and its workers thereby gain certain benefits, this puts pressure on non-unionized companies in the same industry to match those benefits in order to ward off the formation of unions by their employees. Unions can also help workers in general by operating in the political arena to lobby for legislation favorable to workers, help put pro-worker people in government positions, and by educating the general population about worker issues.

So, even tho unions never represented much more than about a third of American workers, they had a major beneficial effect on the economic well being of all working and middle class Americans during the New Deal and post World War II eras. Since the mid fifties, both union membership and the income share of working Americans have been steadily declining. About 11.3% of American workers now belong to unions (6.6% of private sector and 35.9% of public sector workers) [BLS]. How did this happen?

Some history

Unions in the US have always faced powerful opposition from employers, who, except during the New Deal period, have generally been supported by local, state, and federal government. Forming a union was always difficult, as employers routinely fired those workers involved in the organizing process. During strikes, picket line battles were common, as employers brought in replacement workers (scabs), who striking workers tried to keep from crossing their picket lines.

Employers often hired strikebreakers and labor spies to intimidate workers. Starting in the late nineteenth century there were gun battles between workers and employer guards, police, state militia, and even federal troops. Workers almost always lost. Most union organizing campaigns were unsuccessful as the forces arrayed against the workers were overwhelming. The workers who succeeded in forming unions and getting contracts with employers were usually skilled artisans, such as bricklayers, plumbers, miners, railroad train drivers. It was not so easy to replace them with scabs.

An additional factor that plagued workers, particularly during the first half of the twentieth century, were gangsters who muscled their way into the control of some major unions, such as the East Coast longshoremen, and the teamsters union. Sometimes the gangsters, for a fee, promoted the interests of employers, and sometimes they used their control of a union to extort money from employers, in addition to stealing from union treasuries.

The golden days of American unions were during the New Deal era, starting, just before it began, with the passage of the Norris-LaGuardia Act in 1932, and then the 1935 Wagner Act (National Labor Relations Act--NLRA). These laws, which were initially enforced to a useful extent, made it possible for workers to form substantial, effective unions on an industry-wide basis. I.e, encompassing all workers at a facility, not just highly skilled workers. Note tho that the Wagner Act does not cover agricultural, railroad, airline, or government workers.

By the mid-fifties, with the New Deal a fading memory, the tide turned and union membership began a decline that is still going on. (An exception to the general downward trend was the growth of teacher's and some government worker unions.)

Why did union membership fall?

Suppose, for example, that the employees of a large department store wish to form a union to negotiate for higher pay, improved working conditions, and better job security. If management is strongly opposed to this, there are two basic methods it can use to resist. It can increase pay and improve other conditions sufficiently to make workers feel that it is not worth the trouble to unionize just for further marginal improvements. Or, it can use a variety of nasty tactics, discussed below, to fight off efforts to establish a union [Wikipedia-busting][Shapiro]. (Or both methods could be used.) The second method is, by far, more commonly used. This often involves calling on the services of companies that specialize in impeding the formation of unions and in strike breaking.

Many aggressive tactics have been used for these purposes. One set is based on the idea of replacing those supporting the union with more docile people. The importing of workers from abroad for this purpose was, as mentioned above, common in the past, and is still being used today, as people from low-pay countries are encouraged to come here, both legally and illegally. Companies were formed to supply workers to break strikes.

Agents of companies such as the Pinkerton Detective Agency were used to infiltrate unions in order to disrupt their operations by such means as provoking violence, stirring up racial strife among members, and raiding union treasuries. They were able to do a great deal of damage by simply identifying employees who were strong union supporters, so that they could be fired. In some cases agents succeeded in attaining leadership positions enabling them to virtually destroy the unions, or to convert them into tame "company unions".

The current situation

Since the end of the New Deal era, government, at all levels, reverted to its prior anti-labor role. The 1947 Taft-Hartley Act, which significantly weakened the pro-labor provisions of the Wagner Act, marked the beginning of the downfall of labor unions. One of its features was to give state governments the right to pass laws outlawing union-management agreements requiring all employees of a unionized company to pay all or part of specified union dues. Cooperation between different unions was restricted.

The National Labor Relations Board (NLRB) is the agency charged with enforcing national labor laws. It is supposed to protect the legal rights of workers to organize unions. But, particularly since passage of the Taft-Hartley Act, it has proven to be a paper tiger with respect to protecting the right to organize a union [Greenhouse][Weiner].

A basic point is that, when a worker is fired for expressing support for a union, which is a violation of the law, the NLRB is limited to ordering back pay (less any earnings during the layoff period), and this only after a prolonged delay. No punitive action can be taken against the perpetrators. Employers freely violate this and other aspects of labor laws, accepting the minimal consequences as a cost of doing business. Proving that a worker was fired for union activity is difficult, as the courts tend to accept arguments that there were other reasons.

The period between the accumulation of enough signatures (30% of the work force involved) to mandate a certification election and the date of the election is usually several months, and can be prolonged for years by various legal tactics involving such matters as arguing over which workers are in the proposed bargaining unit [Wikipedia-NLRB]. This time is commonly used by employers to apply all sorts of pressure on the employees, including the identification and firing of strong union supporters. A company can require its workers to attend meetings on their premises at which it presents arguments against the union. But the union has no access to workers on company property.

Employer threats, e.g., to cut health benefits, or to lay off half the work force, or to close a plant if the union wins a union representation election are illegal. But there is no penalty for a violation. All the NLRB can do is to order the company to post a notice (after the election is over) promising not to do it again. Even when a union wins a certification election, employers can drag their heels for many months before entering into serious negotiations.

The situation is very different North of our border. In Canada, labor laws are far less hostile to unions, which may explain why there was no plunge there in union membership over the past few decades [Warner].

US unions are generally in weak positions. Companies respond to demands for decent wages by downsizing their work forces and outsourcing work to non-union firms, or hiring contract workers, who are not protected by unions. Credible threats are made to relocate out-of-state, or even out-of-country. Even long established public sector unions are under attack. E.g., the NY City government recently insisted on contract changes degrading job security and lowering the (already low) pay rate of school bus drivers, thereby provoking a strike, which the union lost [Singer].

The relative success of public sector unions in bettering the lives of their members might reasonably have been expected to inspire private sector workers to join or form unions. Unfortunately, the more prevalent effect is that they resent the effect of public sector unions on their tax rates. Contributing to anti-union bias are the inconveniences to the public that often result from strikes. The great difficulties outlined above in forming private sector unions may be another factor in shaping this attitude.

Another reason given for opposition to unions is that increasing worker pay and benefits increases the costs of goods and services. Of course, this is an argument that could be, and was, used to oppose the abolition of slavery. It is also related to the argument that improving conditions for American workers puts US industry at a disadvantage with respect to competitors in low-wage countries.

A more legitimate criticism of unions is that they have a mixed record with respect to racism. E.g., building trade unions have traditionally excluded blacks. This, of course, is not an argument against unions in general, but rather an argument for action to deal with this serious failing where it exists. There is no reason why this problem can't be solved, as, both now, and in the past, many, perhaps most, unions have behaved properly in this regard. Unions have often been in the forefront of battles against racism.

In the face of a very difficult situation, it does not appear that unions have risen to the occasion. There is little evidence of inspired leadership. The idea of solidarity seems to be a thing of the past. There seems to be little in the way of joint action by different unions to push for common goals or to help one another. Most unions seem to be wedded to the Democratic Party, despite that party having done virtually nothing for them since the New Deal days.

Future prospects for American workers

It should be obvious that individuals, with the exception perhaps of some very specially qualified, talented people, cannot in any real sense "negotiate" terms of employment with organizations. The union "movement" today is little more than the twitching of a dying organism. Thus, there has been a steady downward slide affecting the great majority of all Americans living on wages and salaries. Job security, income, health care and other benefits, have all been going south for decades. All indications are that this trend will continue, as there are no signs of significant numbers of people getting together to do anything that has the potential to stop it. (This, despite the fact that most private sector workers say they would like to be able to join unions. [Freeman]) Occasional organized protests not associated with real political action won't do the job.

So, we are approaching a situation in which the US population will consist of a tiny, super-rich elite, dominating a layer of people precariously clinging to middle class status, and a mass of people living in, or on the edge of, poverty.

A necessary condition for reversing this slide is a movement to develop a strong political party that represents the general population, as opposed to the current major parties that are owned by the elite. A government in the hands of such a decent party would, among other benefits, make possible a revival of real labor unions, and the growth of worker cooperatives [Unger-Co-Ops]. It is also essential that rank and file union members actively participate in the governance of their unions, so as to ensure that the leadership is honest, competent, and acting in the best interest of the members and the public.


BLS, "UnionMembers -- 2012", U.S. Bureau of Labor Statistics, January 23, 2013

Richard B. Freeman, "Do Workers Still Want Unions? More Than Ever", Economic Policy Institute, February 22, 2007

Steven Greenhouse, "Labor Law Is Broken, Economist Says", NY Times, October 28, 2010

Harold Meyerson, "The State of the Unions", The American Prospect, July 8, 2013

NLRB, "Investigate Charges", National Labor Relations Board (NLRB)

Lila Shapiro, "Union-Busting Tactics More Pervasive Than Previously Thought: Study", The Huffington Post, 6/28/11

Alan Singer, "Union-busting, Bloomberg-Style", The Huffington Post, 3/20/2013

Stephen H. Unger-Americans, "Are Americans Obsolete?", Ends and Means, May 31, 2011

Stephen H. Unger-Benefits, "Where Did the Benefits of Technology Go?", Ends and Means, February 10, 2012

Stephen H. Unger-Co-Ops, "Worker Co-Ops: A Plausible Solution to Some Big Problems", Ends and Means, July 11, 2011

Stephen H. Unger-immigration, "The Immigration Issue: Good Folks on the Wrong Side", Ends and Means, October 19, 2011

Stephen H. Unger-Jobs, "Jobs", Ends and Means, August 4, 2007

Kris Warner, "The Real Reason for the Decline of American Unions",, Jan 23, 2013 11

Michael Weiner, "Can the NLRB Deter Unfair Labor Practices? Reassessing the Punitive-Remedial Distinction in Labor Law Enforcement", UCLA L. Rev., June, 2005

Wikipedia-busting, "History of union busting in the United States",Wikipedia

Wikipedia-NLRB, "NLRB election procedures", Wikipedia




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