Manufacturing’s Union Decline

March 1, 2013

The revival of American manufacturing is often cited as a clear indicator of the economy’s slow but sure recovery. After all, manufacturers added half a million new jobs since 2009, marking one of the few positives in this relatively sluggish upturn. But that statistic doesn’t tell the whole story: none of the workers who landed those manufacturing jobs are in a union. In fact, the number of union factory workers dropped by four percent from 2010 to 2012, just as industrial America was getting back on its feet.

The decline of organized labor can be attributed in part to the need for companies to keep overheads as low as possible. According to researchers at the Heritage Foundation, unionized workforces are less inviting to investors since they cost more. Indeed, studies show that union employees earn 7 percent more than their non-union counterparts. By this logic, it makes more sense for companies to go with a “right-to-work” staff and reap the cost-saving benefits down the line. Nevertheless, this ignores a fundamental piece of middle class economics: the less money a consumer has to spend, the less likely they are to spend it. If workers are getting paid less, how can an economy profoundly driven by consumer purchasing hope to recover fully?

Still, these newly hired but non-union workers likely had few alternatives. With job opportunities scarce, it’s understandable why many people would jump at the chance for steady work, albeit without a substantial voice in the business. Furthermore, an increasing number of Americans simply don’t see the benefit of spending their hard-earned money on union dues. With so much going against them, it’s unlikely we’ll return to a working world like thirty years ago when one in three manufacturing employees belonged to a union. Now barely one in 10 are organized. Matters aren’t much better for those outside the industrial sector: the number of unionized government jobs shrunk by nearly 230,000 from 2011 to 2012. In the end, industrial unions might be able to find a second life at smaller companies rather than large conglomerates since the latter can afford to become increasingly dependent on a robotic workforce.

 

Questions:

  1. Are more states likely to seek the passage of right-to-work laws?
  1. Why are increasing numbers of workers drifting away from labor unions?

 

Source: Jim Tankersley, “Manufacturing Recovers, But Unions Are Left Behind,” The Washington Post, January 16, 2013. Photo courtesy of Carrie Cizauskas.

 

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