The Slow Death Of America’s Unions

Authored by Sam Bourgi via CreditNews.com,

Unionization in America has reached its lowest level in recorded history.

According to the Bureau of Labor Statistics (BLS), only 10% of American workers—14.4 million people—were part of a union in 2023. Union members increased by 139,000 last year, but their percentage of the total workforce declined slightly.

By comparison, 20.1% of Americans were part of a union in 1983.

Per BLS data, unions are heavily concentrated in the public sector.

Roughly one in three (32.5%) government employees were unionized in 2023, compared to a meager 6% of private-sector workers.

A deeper dive into the data reveals that private-sector unions have declined in lockstep with manufacturing employment.

Over the past four decades, the share of Americans employed in manufacturing—where unionization is among the highest—has cratered from around 22% to the current rate of 10%.

During that period, the percentage of manufacturing workers who were part of a union fell from around 32% to the current rate of roughly 8%.

“While domestic manufacturing drove union membership in the mid-20th century, the U.S. now has far fewer manufacturing jobs than in decades past, both in absolute numbers and as a proportion of overall employment,” according to Diane Katz, a public policy analyst with the Heritage Foundation.

While experts disagree on whether union membership is desirable, there’s a clear link between membership and wages.

Unionized workers earn more—but there’s a catch

According to BLS data, union members earned an average weekly wage of $1,263 in 2023, while non-union workers earned just $1,090.

Unionized workers earn more because of collective bargaining—a process whereby union reps negotiate contracts on behalf of their members.

When unions don’t get what they want, they often go on strike.

As Creditnews reported, the United Auto Workers union went on strike last fall, bringing car production in Detroit to a standstill. The labor disruption lasted six weeks and ended with the union getting a 25% wage increase for its members.

According to the Economic Policy Institute, a nonpartisan think tank, labor unions increase workers’ bargaining power and contribute to better financial outcomes. An absence of unions has “led to wage suppression and the deterioration of labor’s share of income,” according to a November 2020 report.

However, some experts believe unions are a double-edged sword because they monopolize the supply of labor.

“Unions function as labor cartels, restricting the number of workers in a company or industry to drive up the remaining workers’ wages,” wrote James Sherk, research fellow of labor economics at the Heritage Foundation.

“Over time, unions destroy jobs in the companies they organize,” he said, adding that “unions decrease the number of jobs available in the economy.”

A changing workforce

It’s not surprising that unionization declined as the composition of the U.S. workforce changed.

Today, roughly four out of five Americans work in the services sector, where unionization is weakest. As Katz noted, union membership is lowest in sales, computer and math occupations, and food services—“all jobs related to the dominant service economy and tech sector.”

While high-skilled workers can get by without unions because they command higher wages, this isn’t necessarily the case for lesser-skilled employees. According to the National Bureau of Economic Research, unions have been shown to boost the wages of lesser-skilled workers.

This perception isn’t lost on Americans, who increasingly view unions in a positive light.

According to a Gallup poll, 71% of Americans approve of labor unions, mostly because of better pay and benefits. That’s the highest approval rating since 1965.

The positive outlook comes despite 84% of respondents indicating they’re not currently part of a union.