NCPA - National Center for Policy Analysis


February 4, 2008

Labor union leaders might be popping champagne corks over the numbers reported in the U.S. Bureau of Labor Statistics estimates of labor union membership in 2007.

After all:

  • Labor union membership grew by 311,000.
  • Union members as a share of employed wage and salary workers came in at 12.1 percent in 2007, up slightly from 12 percent in 2006.
  • The private sector union membership rate went from 7.4 percent in 2006 to 7.5 percent in 2007.
  • Meanwhile, in the public sector, the union membership rate came in at 35.9 percent, compared to 36.2 percent in 2006.

Before union leaders get too carried away, however, it should be noted that tiny year-to-year differences in union membership rates are probably more statistical noise than substantive developments, says Raymond J. Keating, Chief Economist with Small Business and Entrepreneurship Council.

The long-term trend remains a strikingly grim tale for labor union membership:

  • In 1983, the labor union membership rate stood at 20.1 percent, compared, again, to 12.1 percent last year.
  • As for private sector union membership, the 1983 rate of 16.5 percent has plummeted to 7.5 percent in 2007.
  • Only public sector union membership has remained relatively steady - at 36.7 percent in 1983 and 35.9 percent in 2007.

The problem with labor unions comes down to their fundamental push for higher compensation for less work.   In addition, in unionized workplaces, employees in specific jobs usually get paid the same no matter how productive one individual might be compared to another, says Keating.

The long-term decline in labor union membership is good news for both businesses and employees.  Businesses wind up with a more flexible and productive workforce, while workers have greater ability to excel and be rewarded accordingly, explains Keating.

Source: Raymond J. Keating, "The Upward Blip in Union Membership," Small Business and Entrepreneurship Council, January 31, 2008.


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