The big news in labor relations this week is the passage in Michigan of so-called right-to-work legislation, and its signing by Governor Rick Snyder. Experience in the 23 states that previously had right-to-work laws indicates that this legislation, if it sticks, will have a very negative influence on union membership, revenues, and ultimately, influence.
But the dramatic decline of private sector unionism long pre-dated this latest legislation, and is highly likely to continue, even if the Michigan unions can succeed in somehow rolling back the legislation. While right-to-work legislation is a serious negative for private sector unions, their much bigger problem is that companies, once unionized, fail to grow, then decline, and ultimately die. Unions are not shrinking because they get voted out, or even because of inability to organize new workplaces. Unions are shrinking because their conduct drives their employers out of business.
First, some broad numbers. According to widely reported Labor Department statistics available for example here from the New York Times, the rate of union membership in the United States declined from 35% in the mid-1950s, to 20.1 % by 1983, to just 12.3% by 2009. And that massive decline masks even more dramatic figures for the private sector, since during this period the rate of unionization in the public sector was increasing, reaching 36.2% in 2009, and leaving just 6.9% of private sector workers in unions.
Can anyone actually name an example of a union getting voted out of any workplace with a significant number of employees? It does occur, but that is by no means the main source of the union decline.
Consider the auto industry. According to data here, membership in the UAW has plummeted from over 1.5 million in the 1970s to around 300,000 today. Has the union been voted out of GM, Ford or Chrysler? Of course not. What has occurred is that the combination of high wages, expensive health and pension benefits, and restrictive work rules made GM, Ford, Chrysler and many of their suppliers, uncompetitive in the marketplace. They have closed plant after plant and their unionized workforces are a fraction of what they were at the peak. That created openings for the likes of Toyota, Honda, Nissan, BMW, Mercedes and Hyundai. all of which greatly expanded manufacturing in the United States, and all or nearly all in the right-to-work states. None of them would go anywhere near Michigan. Back in Michigan, GM and Chrysler exist on government life support, the City of Detroit has lost well over half its population since the 1950s, and even the State of Michigan as a whole lost population between the 2000 and 2010 censuses, the only state to do so. Not having a right-to-work law has preserved existing privileges of Michigan's union members and leaders, but has not prevented rapid decline of the union movement in the state.
Very similar stories exist in other formerly heavily-unionized industries, such as steel and tires -- huge declines in the unionized companies, accompanied by the rise of non-union competitors, often in right-to-work states. New York is the state with the highest remaining rate of private-sector unionization, at over 20%. But here is a report from the New York Times on September 3, 2012 on ongoing dramatic declines in private sector union jobs in New York City.
The number of city residents with union jobs in the private sector has dropped by nearly 20 percent since the recession started in 2008, the report by scholars at the City University of New York shows. That amounts to a loss of about 95,000 union jobs, and a decline twice as steep as that for the rest of the nation, said Ruth Milkman, a sociology professor who wrote the report with Laura Braslow. . . .
“I saw this happen in California in the 1990s,” Professor Milkman said. Such a sharp decline is difficult to turn around because the businesses created after a recession are less likely to be unionized than the older ones that failed in the downturn, she said.
And it only takes a little looking around to see where some of the next declines in unionization are going to occur. How about the U. S. Postal Service? They have gone from mostly-unionized 909,000 employees in 1999 to just 617,200 in early 2012, and they are hemorrhaging employment at the rate of 30,000 - 50,000 per year. Will they even still be in existence in 2020? Hostess just closed with a loss of over 18,000 mostly-unionized jobs. If anything the trend is accelerating toward the end.