Declining Labor Unions; Are They Still Needed?

Updated on May 1, 2016

Safety Posters come in all types these days! Courtesy of OSHA

Working conditions have long been a union cause!

Glory Days Gone?

On a cold day in the winter of 2006, 12 miners were found dead after a mining accident at Sago, West Virginia. A relative of one victim told newsmen that the mine was a non-union operation and he was sure there were corners cut in the safety arena as a result. While this is a somewhat typical response from a staunch union advocate perhaps, is it one that is based on a realistic assertion, i.e. without a union present in the workplace, management will play "fast and loose" with worker well-being?

In large measure, the government has supplanted the labor union as a workplace safety advocate. The Occupational Safety and Health Administration (OSHA) established in 1971 is now the "de facto" arbiter of workplace safety. Labor unions had a discernible role to play in the passage of OSHA. But it would seem they have "passed the baton" to the government on the issue of workplace safety. This is true in manufacturing operations at least, but what of mining?

The Mine Safety and Health Administration (MSHA), formed in 1977 by the Mine Safety and Health Act, is the OSHA equivalent in the mining industry. In the case or the Sago Mine, the SHA issued 208 citations to the Sago Mine, nearly half of which were serious safety violations. However, none of these citations resulted in any substantial penalty for the mine operators.

In January, 2006, a MSHA spokesman said, "Sago raises red flags for mine oversight ... If you have a widespread practice of S&S violations over an extended period of time like we have here, it suggests that you've got much more serious problems than just paperwork violations".If that is true, why wasn't anything more severe than "paperwork violations" used to sanction the mine's operators? It would appear that government oversight was ineffectual in actually bringing about improved safety in the operation of Sago Mine.

Would a unionized miner workforce have produced a different result...and possibly saved the lives of these 12 miners:? The answer, I believe, could have. I say this because the miners would have had one weapon at their disposal not available to the non-union victims of the Sago Mine Disaster...a union-sanctioned work-stoppage. Shutting down operations at the mine, for even a day, would have cost management enough to force changes in operations. A work stoppage of any length would have cost more than the apparent cost of 208 citations.

While many of the issues unions resolve through collective bargaining today don't involve life and death issues of workplace safety, they certainly impact the economic health of union members. If we didn't have labor unions, how would workers fare? If there were no such thing as labor unions in today's workplace, be it factory, office, or mine.... would workers get a "fair shake" from management?

Lets look at three broad areas often negotiated and see if we can discern trends from available data.

  • Wages
  • Benefits
  • Job Security

Wage Comparison; union vs. nonunion

Wages, Union vs. Non-union

There is a mountain of data on this question. A quick survey should convince you that higher wages do come with union membership. The power of collective bargaining in producing higher compensation for union members is understandable. Labor costs are current costs and can, therefore, be easily quantifiable on the here and now issues of a business. Contrast that to future costs of things such as retirement benefits, medical costs, etc. Higher wages for union members can be more easily understood in that context. When management knows what the current costs of labor are going to be, they can afford to be easier negotiating partners on that issue than on future costs which are likely a "best guess" proposition and therefore fuel for debate and conflict.

Ben Casselman in the Wall Street Journal writes, "The median private-sector union member made $878 a week in 2011 compared to $716 for nonmembers, a nearly 23% premium. (The premium was somewhat smaller in the manufacturing sector: $836 per week for union members for $780 per week for nonmembers.) Such comparisons have limited value since there are numerous other variables that affect wages. But to the extent there is a union wage premium, the added cost of dues doesn’t appear to negate it."

This should present a bit of a dilemma to union leadership; that is, at what pay level have they reached the "tipping point" where labor costs become higher than the market will bear? But, it doesn't appear that this question filters to the top of union leadership's worry list very often, and if it does, it is often addressed by attempting to negotiate job security parameters concurrently.

Benefits: How freely are they provided?

Will management provide benefits to employees without union pressure to do so? The data would seem to suggest the answer to this question is a resounding "No"! In a 2012 compensation survey, the U.S. Bureau of Labor Statistics, reports that a whopping 57% of part-time workers have no access to either medical or retirement benefits through their employment. A closer look at survey data provides an even more stark contrast. Part-time workers have access to medical benefits in just 24% of the time; and retirement in just 38% of cases. Full-time workers conversely are at 86% and 74% respectively. It seems that management will hire part-time workers in preference to full-time just to avoid paying any benefits to this class of employees. This has long been suggested anecdotally by job-seekers but it may very well be true.

A more detailed look at this survey would tend to suggest that unions have a distinct impact in improving the lot of employees in the area of benefits. For all industries, union workers had medical benefits available to them in 94% of the cases surveyed compared to 67% for non-union workers. They also had access to retirement benefits in 92% of cases. This compared to 62% for non-union workers.

Unions have also had a positive impact on employee well-being in larger versus smaller businesses. This could be because many large corporations have far more union presence than smaller companies. Much of this is due to legacy situations like the auto, steel, aerospace and other "blue chip" manufacturing industries of yesteryear. For instance, in companies employing 1 to 49 workers have medical benefits available to workers in only 54% of cases. Retirement benefits are even more lacking with only 46% availability. This in contrast to companies with 500 or more employees where the numbers are 89% and 86% respectively. This disparity is probably due to legacy union negotiation success.

If unions go the way of the dinosaur will the benefits provided by business slowly erode and fall victim to future "cost-cutting" measures? The answer is probably "yes".

Job Security; Plant Closures, Seniority, Levels of employment,

One area where unions seem to have failed miserably, is in the area of job security. While union seniority rules have long provided an orderly tool for management to use in rapid expansion or contraction of the work-force, other issues of job security have been largely unaffected by union collective bargaining efforts. This is especially true in plant closures and maintaining union employment at prescribed levels in plants which remain open. Union success in these areas is minuscule at best, and non-existent at worst.

Foreign outsourcing of manufacturing and moving plants to "right-to-work" states are the major culprits in this demise. Union leadership has yet to provide effective leadership to stifle these trends. If presidential candidates like Donald Trump can be believed this can best be accomplished by more favorable trade agreements and import tariffs. If these measures do prove to be effective, it is still a government intervention which achieves that result, and government is often a fickle partner in such matters. It still behooves union leadership with adopting a leadership strategy to preserve jobs for their members. It is not something that can, or should be left to government.

Union membership has declined steadily since its height in the 1950's at about 35% of the work-force; to a paltry 9.1% today. These losses have been primarily in the manufacturing sector. But they have been "across-the-board" except for public sector unions. Public sector unions are the only place where unions are gaining membership. Many feel that public sector unions should be banned. Gov. Scott Walker of Wisconsin is one who shares this viewpoint. Other governors have met with less success than Walker in battling public sector unions in their states. Gov. Bruce Rauner of Illinois an example. Most governors who feel this way have had limited success in this area. Walker is a notable exception.

This is not a new sentiment. No less a figure than Franklin D. Roosevelt said the following; "All Government employees should realize that the process of collective bargaining, as usually understood, cannot be transplanted into the public service.... The very nature and purposes of government make it impossible for administrative officials to represent fully or to bind the employer in mutual discussions with government employee organizations."

Yet it appears that public sector unions may well be the last bastion of strength in the modern Labor Movement.

Conclusion; A Paradigm Shift is needed.

There needs to be a paradigm shift in union/management relations or unions may well cease to exist in America. Unfortunately for the union leadership, it is incumbent upon them to lead the way in this paradigm overhaul. Management doesn't need to do anything. They are winning the battle in the current adversarial environment. The unions are the underdogs and therefore need to be the aggressor in adopting a less adversarial and more a true partnering with management. This may well be the only thing that keeps labor unions from completely disappearing from the American workplace.

The unions should develop negotiating strategies that align themselves more closely with management's goals; be it profits, improved company image, or economic development within the community. A paradigm shift away from an adversarial relationship with management; toward a true partnership could go a long way to leveraging the wage premium, workplace safety, and benefits of union membership into something that is perceived by management and unions alike as a profitable investment.

If unions are unable to effect this paradigm shift. Without it, they may well disappear from the American workplace. If that should ever happen, the inescapable drive for ever-greater profits will inevitably result in an erosion of the gains that have been so hard-won by the Labor Movement over the past decades.

Please take our poll; I am very interested in how people feel about this.

Poll; Are unions still needed??

Are Labor Unions still viable in today's competitive environment?

See results

Should union leadership seek ways to more effectively partner with management?

See results

Is government a reliable partner to save union jobs; or should unions take matters into their own hands?

Should unions rely on government to stop outsourcing and plant re-location?

See results

This article is accurate and true to the best of the author’s knowledge. Content is for informational or entertainment purposes only and does not substitute for personal counsel or professional advice in business, financial, legal, or technical matters.

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