The Future of Unionism In America

Being here to talk with you today about the "Future of Unionism in America" is in itself a reflection on the changes that are taking place.

Twenty-five years ago, as I traveled around the country giving talks about unionism, most of my private sector audiences were "Industrial Relations Groups."

Now, I'm talking to a "Society for Human Resources Management."

It reminds me of George Carlin's old routine about the difference between football and baseball. In football in order to score you launch "aerial assaults" and "attacked the line" but in baseball you scored by getting "home safely."

That's very much like the difference between "Industrial Relations" and "Human Resources."

These differences really do matter. In Industrial Relations it was presumed that you dealt with unions in what was usually an adversarial and confrontational manner and in human resources you are usually dealing with people in a cooperative and productive way.

But then my topic isn't human resources management, which is a good thing, because I don't know much about that.

I came to talk about the future of unionism. I suspect that what I have to say may be slightly different from what you'd expect because how we perceive this issue has so much to do with our sources of information.

Most information about unions comes from the unions themselves or from the government.

The unions have an obvious self-interest in putting the best face on it.

I've been a student of unionism since 1964. Even then, union officials were saying, "Yes, we've had some problems but we've got it straightened out and we're back on the right track."

And the government isn't much better. The U.S. Department of Labor is aptly called the "Department of 'Organized' Labor."

Every year when the Bureau of Labor Statistics issues its report on union membership they go out of their way to emphasize the least little glimmer of hope and frequently ignore important information about the unions' problems.

Negative information is usually buried in the pages of statistics that accompany the report but you will rarely find it mentioned in the news release.

In 1999, the Bureau of Labor Statistics reported that union membership in America increased by 266,000. The report included prominent mention of the fact that union penetration in the work force had remained constant from the year before at 13.9 percent.

Union officials hailed this as an indication that they were "turning the corner" on reversing their decline.

Many news reports included statements by union officials that they had organized 600,000 workers in 1999.

The details in the report, however, raised serious questions about whether that was the case.

According to the report, during 1999 the economy generated 2,233,000 new jobs; 1,696,000 of them were in the private sector. That's a very healthy increase of 1.7 percent.

Unfortunately, 537,000 of them were in the public sector, an increase of 2.9 percent.

Union membership increased by 113,000 in the private sector and in the public sector by 153,000.

In 1999, if employment in unionized firms had grown at the same rate as the rest of the economy, that alone would have increased private sector union membership by 161,000, not by 113,000.

In other words, even if there had been no union organizing activity, more than all the increase in union membership could be explained by increased employment in already unionized jobs.

This was clearly not the case.

Suffice it to say that this question presents a problem for the unions.

If they contend that the increase in membership resulted from organizing activity, are they saying that there were no increases in employment at firms with union contracts?

If so, what does this imply about the impact of unionism on the economic health of such firms?

It's worth noting, too, that union penetration remaining constant at 13.9 percent was a statistical anomaly. Union penetration in the private sector fell from 9.5 to 9.4 percent and in the public sector from 37.5 to 37.3 percent. Neither of these changes, though, were enough to move total union penetration by a whole tenth of a percent so there was the appearance that union decline may have been halted.

Another way to look at this is to examine union membership by industry.

In 1999, union penetration declined in almost every private sector industry group. In some instances, despite the growth in total employment, the number of union members in an industry actually declined.

The glaring exception was the construction industry where unions added 131,000 new members.

Again, please note that more than all the increase in private sector union membership can be explained by the increase in a single industry - an industry that accounts for about 6 percent of the work force.

At the same time unionism was declining in mining, manufacturing, transportation, communications & utilities, wholesale & retail trade and the service industry.

Yet, another way to look at union claims of organizing successes is National Labor Relations Board elections.

The National Labor Relations Board has been quite properly described as a gamekeeper whose job it is to make the death of the union dinosaur as prolonged and as painless as possible.

In 1999, the National Labor Relations Board conducted about 2,800 elections and unions won about 52 percent of them.

That's about 25 percent fewer than the approximately 3,800 elections the NLRB conducted in 1998. They tell me that the reason there were so many fewer elections is that the unions withdrew from elections they knew they would lose.

That's rather remarkable because in 1998 unions won more than 49 percent. Imagine what their record would have been like if they hadn't withdrawn from almost 1,000 elections they knew they couldn't win.

Whatever the reason the fact remains that there were notably fewer NLRB elections in 1999 and considerably fewer new union members as a result.

In 1999, I said at the time that I thought the figures were a bit off, so it wasn't much of a surprise when this year's report, issued just a few weeks ago, found that union membership had once again declined, in this case by 219,000 members.

Now, I'd like to share with you a little "secret" about all these figures. They aren't necessarily true.

They are derived from the Current Population Survey, which, although a very good source of information, is, after all, a survey.

This data is much more accurate than most other polling data but it is subject to the statistical limitations of all survey research.

I've tried to pin them down on this without much success. But, without agreeing that I'm right, they won't say that I'm wrong when I suggest that everything they've told me indicates the data is accurate within about plus or minus one quarter of one percent.

Now, one quarter of one percent is very accurate but when you're measuring a work force of more than 125 million, one quarter of one percent is more than 250,000, so you can see why a change of 266,000 or 219,000 one way or the other may be inaccurate.

On several occasions in recent years the survey has shown increases in union membership and a leveling off of the decline in the unionized percent of the work force.

But, these statistical problems don't affect the long-term trends reflected in the survey results.

And, those "long term trends" are downward!

For the last fifty years unions have been in decline.

In the mid 1950's, about 30 percent of all workers were union members. Almost 40 percent of all private sector workers and about 12 percent of public employees were unionized.

By 2000, only 13.5 percent of all wage and salary workers were union members.

In the private sector of the economy that figure is 9.0 percent. In the public sector the figure is 37.5 percent.

That's almost a complete reversal.

This change has had an impact on the internal politics of the union movement. In the 1950s only 5 percent of all union members were public employees. By 2000 that figure was 43 percent and rising.

I don't want to ignore your own state of Florida. I know that in Florida organized labor isn't as much of a factor as it is in other parts of the nation.

In Florida's private sector only 3.4 percent of workers are union members. That's about one third of the national average.

It's in the public sector that unions in Florida have their strength. But even there it is below the national average. Only 25.4 percent of public employees in Florida are union members. That's about two-thirds of the national average.

While I'm at it, you might also be interested to know that Florida is one of the few states in which the number of public sector union members exceeds those in the private sector. Almost 56 percent of all union members in Florida are public employees.

So, even though unions are relatively weak, their political and economic power is increasingly focused on public employment and that generally includes larger government and more public employees.

In fairness to the unions, I should note that Florida is one of the few states where the BLS reported gains in union membership in 2000.

According to the BLS, even though union membership declined nationally, union membership in Florida increased by 24,000 and the unions' total share of the work force increased from 6.5 to 6.8 percent.

Still, over the last 18 years unionism has been on the decline in Florida. During that period of time employment has increased by 66 percent while union membership has increased by only 10 percent and as a result, union penetration in the work force has declined from 10.2 to 6.8 percent.

So far as I'm concerned, there are forces at work that make the continued decline of unions in America almost inevitable.

Let me review just a few reasons why I think the decline must continue.

The first reason is attrition. The workers who were the core of the work force in the union heyday are retiring.

If you look at the age demographics of the union movement it is like a boa constrictor that swallowed a pig. There is a big bulge in the 45 to 64 age groups.

Those workers are moving out of the work force and those who are following are much less likely to become union members.

Second, the unions seem unwilling and are perhaps unable to make the investment in organizing that it would take just to hold their own.

The economy is creating new jobs faster than the unions are gaining members.
In 2000, the economy created 1.8 million new jobs. The unions claim to have recruited more than 400,000 new members but their membership numbers fell by 219,000.

Given the rate of job growth, it would take about 10,000 NLRB elections a year for the unions to hold their own, not the approximately 3,000 they are conducting.

In a speech in San Francisco in 1996, AFL-CIO President John Sweeney said that unions would need to spend $300 million a year on organizing, just to hold their own.

Nothing I've seen since then indicates that the unions are willing or able to do this.

Please recall that when Sweeney was elected in October1995 he pledged to spend $20 million on organizing and $35 million on recapturing control of Congress.

By February 1996 he said that they would have to cut back the organizing to $10 million.

A study done for the AFL-CIO by some professors at Cornell says that their biggest obstacle to union organizing is the unwillingness of union officials to devote the resources to it.

Many union officials complained that, if they were to spend as much as required on union organizing, they would have to short change the representation they are giving to existing union members and they would lose them.

Yet, another factor in the decline is the demographic changes that are taking place.

The workforce is becoming better educated. This is having a profound impact on how people feel about their jobs.

Well educated workers have a much better sense that if one job doesn't work out for them they can and will find another.

Beyond that, in the industrial age it was the capitalist who owned the tools of production and the worker used the tools.

In the information age, knowledge is the tool of production and the workers are carrying it around with them in their heads.

Also, unionism is no longer the influence on income it once was. The union wage differential isn't holding up.

We still see the reports showing that union workers make more than their non-union counterparts and, of course, the unions use that to their advantage.

But those figures were greatly distorted by occupation and geography.

There are more union members in the highly populous states of the rust belt and the west coast where wages and the cost of living are higher, and that has an influence.

But even in those areas the difference of occupation can be seen. In the retail and service industries, where wages are lower, whether unionized or not, levels of unionism are lower. Union penetration is higher in industries like manufacturing and construction, where wages are higher, whether unionized or not.

As a result there is an apparent union wage differential that has very little to do with unionism.

In fact, one of the most interesting things I've seen in recent years in the national data, is that non-union manufacturing workers are earning more than their unionized counterparts.

I suspect that this has much more to do with the fact that the newer manufacturing industries, which are less likely to be unionized, rely heavily on highly skilled workers who earn more and that unionism is increasingly concentrated in the old, labor intensive, low skilled manufacturing industries.

That brings me to the final reason.

Most American workers don't want union representation.

There was a famous cynic who said that you could never go broke underestimating peoples' intelligence but I've learned that just the reverse is true and I think unions make this mistake constantly.

Just because a person is "blue collar" doesn't mean that they aren't intelligent. The working people of America aren't stupid. They understand that there are both benefits and costs to unionism and that the costs outweigh the benefits.

A survey in Michigan in 1996 found that only about 26 percent of all workers who are not represented by a union want a union.

The AFL-CIO's own survey shows that the majority of workers don't want union representation.

In our present system where the unions must get the support of a majority of workers in an election, the unions have a very difficult task because the majority of workers don't want union representation.

It might also interest you to know that the higher the vote turnout in a NLRB election the less likely it is that the unions will win.

The combination of these factors and the others that are more typically mentioned, like the shift to a service economy, all contribute to the decline of unionism and there is little, if anything, in the economic or organizing realm that the unions can do about it.

But, the same is not true of union political influence. In that realm they are still very powerful.

Apologists for union special interests still have a majority in both Houses of Congress. That was true even after the 1994 elections and has become more so in the most recent elections.

There are several factors behind this power.

The first and most important is mythology.

There is a myth of union political power. Many politicians think that unions have more political power than they actually do. In politics, perception is much more important than reality.

There is also a myth that unionism is a good thing. Unionism ranks right up there with motherhood and apple pie.

The Union Bosses love to trot out the Gallup surveys showing that "in general" a majority of Americans "approve" of unions.

They chose to ignore that union officials rate just above used car salesmen and lower than members of Congress in terms of public trust.

The second factor is solidarity. The unions understand solidarity in ways that the business community does not.

When there are discussions of union political money the union bosses love to point out that "business" spends many times more than they do on politics.

What they don't mention is that business interests are frequently at odds with each other and that sometimes they support the union position.

On union special interest issues the bankers say, "What's that got to do with banking?" The health care industry says, "What's that got to do with health care?" The list goes on and on.

But, when it comes to a union special interest issue the unions are almost always united.

For example, when Congress tries to do something about the waste caused by pro-union prevailing wage laws like the Davis-Bacon Act, it's not just the construction union lobbyists we have to worry about.

Teacher union lobbyists are on The Hill opposing any reasonable change in these laws, despite the fact that doing something about them would make it less expensive to build more quality schools and to repair the thousands of schools across the nation that don't even meet the building codes.

So, even though union membership is on the down slope, in terms of political power and lobbying effectiveness their power far exceeds their numbers.

It is also clear that if they are going to do anything to really turn around their decline in membership, they are going to have to use their political power to get the government to do it for them.

That's why we're seeing so many efforts by unions to avoid having elections and to get employers and the government to hand the workers over to them.

You can see this clearly in campaigns where unions attempt to use social and political pressure to gain what they can't win in the market place.

So-called "Project Labor Agreements" are a perfect example of this sort of campaign.

They use their political influence to get government to agree to use only union labor on public works construction projects. In return the unions promise "labor peace." In other words, they won't strike or engage in riots or vandalaism.

Project Labor Agreements drive up the cost to the taxpayers and discriminates against more than 80 percent of construction workers who have chosen not to be union members.

That's why I call them the "new bid rigging and protection racket!"

Another manifestations of these corporate campaigns and union political power that ought to be of very real concern to people in your field is the so-called "neutrality agreement."

Unions are increasingly using their political power to insist on so-called "neutrality agreements" as a condition of contracting with government or of being a beneficiary of government support.

There's a law in California making a neutrality agreement a condition of contracting with the state for the provision of health care services.

Several cities have made neutrality agreements a condition of receiving government support such as tax subventions for businesses.

At the present time there are controversies in Denver and Pittsburgh concerning neutrality agreements for developers of downtown convention hotel properties that are receiving tax breaks.

Under neutrality agreements employers agree to say and do nothing to discourage employees from seeking union representation.

This is an injustice and an insult to employees and demonstrates just how desperate unions have become in their desire to reverse their decline.

At the risk of belaboring the point, there are two parties to employment, the employer and the employee. There is no such thing as an employer without an employee and there are no employees without employers. They are in it together, or not at all.

Whether or not to be represented by a union is one of the most important decisions an employee can make. It is very likely that the employer has information the employees ought to know when making this decision.

By muzzling the employer, neutrality agreements deprive employees of information they need in order to make a well-informed decision.

Neutrality agreements not only muzzle employers they almost invariably include a provision for certifying a union as a representative on the basis of what is called a "card check" election.

Unions point out, quite properly so, that with neutrality agreements they are much more likely to win representation rights. They attribute this to the absence of threats and intimidation by employers.

What this argument ignores is that unions have been known to use subtle forms of moral suasion that are sometimes neither subtle nor moral to persuade employees to sign authorization cards.

The unions, of course, promote the myth that employees want union representation and that, were it not for interference and intimidation by employers, would vote for it.

Employees who are opposed to unionism have a very difficult task under our present labor law.

American labor law makes it virtually illegal for employers to assist their employees in the employees' battle against being unionized.

There is a terrible imbalance of resources. Employees who want unionism have all sorts of resources available to them and employers who want to resist the unionization of their employees also have a wide variety of available resources.

But, employees who are fighting for their freedom against unionizing efforts, have little or nothing available in the way of resources and yet, in most cases they succeed.

And that brings me full circle. You see, to the extent that you can manage human resources in a cooperative and productive manner you are creating an environment where employees have a far better chance of preserving their freedom.

You are, in a sense, becoming a "partner in crime" with your fellow employees in their battle against unionism.

For that, you should be very proud and I congratulate you.

* * * *
David Denholm is the president of the Public Service Research Foundation, a research and education organization concerned with unionism and the influence of unions on public policy.