Opinion and Economic Analysis

Hicks: Blame labor's collapse on its own successes

August 31, 2013

It is Labor Day weekend, time to again mark the informal passage of summer and take stock of the American labor movement. I expect pundits across the nation to lament or gleefully point out that private-sector union membership has plummeted back to the share it held during the Roosevelt presidency (Teddy, not Franklin).

The decline is startling. In only 50 years, membership has dropped 80 percent. No mainstream American institution of note has dissipated at this pace before. Today, more Americans receive disability payments than belong to private-sector unions.

As of 2012, a tad bit more than half of union members were government workers and more than one-third of government workers belonged to a union. However, that stronghold faces even greater risk than private-sector unions.

The passage of right-to-work legislation in Indiana and Michigan has resulted in rapid declines in state and local government union membership. In Wisconsin, public-sector union membership plummeted when Act 10, which ended government dues collection, was passed.

Moreover, the coming pension crisis in state and local governments will likely collapse public union membership even further as members discover that the many promises negotiated by their unions strain the mathematics of taxation.

There are many reasons for the labor unions’ decline, but job losses are not among them. Nearly every year since 1970 has been bad for unions, no matter the state of the economy.

Unions are disappearing in part because of their early successes. The vast improvements in the American workplace in the last century were begat by the labor movement. Having succeeded at bringing about what most Americans wanted, many in the labor movement have turned their attention to issues most workers do not desire—one need only mention work rules in most government workplaces to provide a costly example.

An important question: What will a world without unions look like? More specifically, what will replace them?

I suspect we are going to see a much more sophisticated set of associations replace unions. After all, the American Medical Association does a better job of squelching workplace competition than any trade union.

This model of workers seeking to craft work and compensation rules will mostly benefit the mid-skilled and higher-skilled workers. There is little money to be made organizing low-skilled workers, who, after all, are poor and trying to become skilled workers.

Whatever happens, it is clear the ghost of the American Labor movement is largely quiet this Labor Day.•

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Hicks is director of the Center for Business and Economic Research at Ball State University. His column appears weekly. He can be reached at cber@bsu.edu.

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