NCPA - National Center for Policy Analysis

Union's Seek to Stem Membership Decline

March 10, 1997

John J. Sweeney, president of the largest labor union organization in the United States, the AFL-CIO, recently announced a major redirection of union resources toward recruitment of new members. The goal is to stop the hemorrhaging of union membership as a share of the U.S. labor force.

  • In the 1950s, more than a third of all workers were union members.
  • As recently as 1980, more than 20 million workers belonged to a union.
  • In 1996, however, there were just 16.3 million union members, 14.5 percent of all employed wage and salary workers, according to the Department of Labor.

This represents a drop of 91,000 union workers just since 1995 -- 0.4 percent of total employment.

For many years, the industries where unions were strong were those where employment was stagnant or declining. Overall manufacturing employment, for example, has fallen by about 2 million since 1980. By contrast, industries where unions traditionally have been weak have grown sharply. Thus employment in services virtually doubled between 1980 and 1996, from 17.9 million to 34.4 million. The only major growth area for unions has been government, where almost 40 percent of workers are now union members.

Another factor leading to union weakness is the declining wage premium for union membership.

  • In 1983 the median wage for all private sector union members was 39 percent higher than for non-union members.
  • Last year this premium for union workers declined to 27.5 percent, with union members making $584 per week and non-union workers earning $458.

In fact, in some industries there is virtually no premium at all. Union workers in finance, insurance and real estate -- an industry where employment has grown rapidly --made $534 per week in 1996 while non-union workers made $520.

Changing trends in pensions may also be a factor. During the heyday of unions, most pensions were of the defined-benefit variety -- companies took responsibility for investing pension assets and workers were promised a fixed monthly benefit. But over the last 20 years, growing numbers of pensions have been converted to defined-contribution plans in which workers must make their own investment decisions. With many defined-contribution plans invested heavily in corporate stock, workers may now view themselves more as owners than wage-slaves.

Unions often blame Washington for their problems. If only more union-friendly legislation could be passed, they believe, there would be a turnaround in union strength. Hence, vast resources have been poured into anti-NAFTA and anti-Republican efforts -- but to no avail. The trends toward globalization and government downsizing have been too strong to resist. This suggests that Sweeney's new recruitment strategy has more promise.

Source: Bruce Bartlett, Senior Fellow, National Center for Policy Analysis, March 10, 1997.


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