Labor unions are nonprofit businesses whose managers benefit to the extent that they can get workers to accept their representation services in exchange for the payment of dues. Supposedly—and there is some statistical evidence to support the claim—unionized workers enjoy higher earnings than non-unionized workers in comparable jobs. Unions also claim that they give workers greater job security, safety, and “voice.” So why is it that for almost half a century, the percentage of workers who are not represented by labor unions has been increasing?
The salient fact is that the percentage of unionization among private-sector workers peaked in 1953, at 36 percent. Although unionization has rapidly grown among government workers since then (for the obvious reason that government agencies don’t have to worry about competition or costs), private-sector unionization has been falling steadily. Now, only about one in ten workers has union representation. In his new book, Beyond Unions and Collective Bargaining, Rutgers University economics professor Leo Troy attempts to explain why.
His conclusion is simple: Most workers prefer self-representation. Yes, unions promise various benefits, but most workers have figured out that the benefits are dubious and the costs, both in dues and the possibility of job loss because of the well-known propensity of unions to make firms uncompetitive, are very real. The product the unions are selling—their services in negotiating and administering a collective labor contract—is one that many workers have come to see as unattractive or irrelevant. That is why the great organizing campaign announced with bravado by AFL-CIO President John Sweeney on taking office has had no discernible effect. Union numbers continue to slide. The customers just aren’t buying.
A key reason why they aren’t is that business managers have become, on the whole, far more sophisticated in their handling of workers than they were in the era of advancing unionism. The old managerial style that sometimes rivaled the Prussian army has given way to greater flexibility and attention to employees. While management at one time told workers to check their brains at the door, today managers seek ideas from workers. Union contracts and rules mean higher costs and lower efficiency for companies, and it should come as no surprise that they have discovered methods that keep workers content enough that they will say “No thanks” if union organizers come around.
The fact that many sectors of the American economy are now much more vigorously competitive than they were 50 years ago is also important in the ascendancy of individualism in labor relations. In highly regulated industries facing little foreign competition, the costs of unionization were readily passed on to consumers. But with global competition and, at least in some respects, a freer business environment today, a unionized company is like a runner in a race with lead shoes. Many old unionized companies have gone out of business or now operate as mere shadows of their former selves while non-union newcomers thrive. The steel industry is a good example.
Troy is not predicting extinction for unions and collective bargaining. He believes that there will remain a core of unionized firms that will comprise roughly 7 to 9 percent of the private-sector work force. But union talk of a big comeback is, he maintains, just puffery. Even if the unions managed to elect a friendly president and Congress and prevail on them to enact new labor laws designed to make organizing easier, Troy thinks there will be no union comeback. He points to Canada, where labor law is much more pro-union than here and unionization has been declining.
What are the implications of all this? Troy leaves that largely to his readers. Even if private-sector unionism vanished, organized labor would still be able to extract huge amounts of money from its government workers to finance political campaigns aimed at electing politicians who favor the further expansion of government. Statists like Lyndon Johnson used to depend on money largely taken from steelworkers and autoworkers. In the future, statists like Bill Clinton will depend largely on money taken from public-school teachers and government “service” workers. The interventionist damage done to the economy and the freedom of the individual by the union political agenda is not going to end just because private-sector unionism has reached what Troy calls its “twilight years.”
Beyond Unions is worth reading for many reasons, not the least of them that it reaffirms an important truth: Human interests are better served by freedom than coercion.