Big Labor’s Big Shrink

Union membership continues to decline—thanks to unions

WSJ editorial. Excerpts:

"Private unionization has fallen to 6.4% from 16.8% in 25 years as union labor agreements have made manufacturers less competitive and the U.S. economy has become more service-oriented. See the U.S. steel industry."

"After the Democratic Congress in 2009 failed to pass card-check to ease union organizing, the Obama Administration turned to regulation. The National Labor Relations Board made it harder for employers to counter union organizing while its joint-employer rule gave labor groups more leverage over corporations and a foothold at fast-food and other franchises.

Yet private union membership continued to slide. The drop over the last decade has spanned most industries including transportation (22% decline), manufacturing (21%), construction (18%) and health care (15%). Even as manufacturing employment has increased by 1.4 million since 2010, the number of union workers has fallen by 78,000.

One reason is right-to-work laws in states like Indiana, Michigan and Wisconsin that let workers opt out of unions. After Wisconsin enacted right to work in 2015, the union share of the state workforce fell 30%. Jobs have been shifting to southern and western states with right-to-work laws, and foreign automakers have dodged unions by locating new plants in the South.

Unions also aren’t delivering better wages. Earnings growth for union workers was generally stronger prior to the recession, but non-union workers have since done better. Median weekly earnings for union construction workers increased annually on average 0.2% faster than for non-union counterparts from 2000 to 2008, but they have since grown 0.3% slower.

Union health and social care workers averaged 1.1% faster earnings growth in the eight years before the recession, but their pay increases have trailed by 0.3% each year since 2008. Annual earnings for an average union health-care worker would be $1,180 higher today if his pay had grown at the same rate as non-union counterparts over the last decade.

Union workers often receive more generous health and pension benefits, which may account for some of the discrepancy. According to the Labor Department, benefits as a share of compensation have grown 1.7 percentage-points more for union workers than non-unionized employees since 2008.

But union workers may not be reaping the benefits. That’s because employers have had to funnel more of worker compensation to insolvent union-run multi-employer pension plans. Many companies have gone bankrupt, which has shifted the funding burden to others."