An American Attitude: State of the Unions

In Canton, Mississippi, 63% of workers at a Nissan plant recently rejected a motion to unionize with United Automobile Workers (UAW). UAW and pro-union workers at the plant cited unsafe labor practices and unstable retirement plans in their bid to workers, and still the majority of workers at the rural Mississippi plant saw a better future without union representation. Some pro-union workers alleged that Nissan threatened to close the plant if the workers voted to unionize and bribed employees, both actions that would be illegal. Nissan has denied these allegations which nevertheless may have influenced the outcome. The National Labor Review Board (NLRB) filed a complaint in response to those concerns. Still, the Nissan plant vote, as well as the steady decline of union membership in the US, is unseemly given the academic conclusions about union earnings versus nonunion earnings.

 

 

After reviewing data on the wage differential between union and nonunion workers and controlling for variables like job and labor market characteristics, Gerald Mayer of the Congressional Research Service found that, on average, union members make 10-31% more than nonunion workers in the US. The higher wage earnings of American union members, however, result not from an inherent benefit in union but rather from the labor markets in which those unions exist. In countries where union membership is higher, the wage differential between union and nonunion workers is not as great because less competition exists among employers in buying labor. In those countries there is greater coordination by workers. Workers in high-union markets do not have to worry as much about job security because even nonunion employees are then paid close to the going union wage lest employers face labor organization, its scrutiny and avowed irreplaceability (preventing other hirings), if they deviate from the union-set standard. The widespread union activity leaves other employers closer to a de facto union wage. For labor markets dominated by unions, the coordination among workers plays out across the industry.

 

 

The vote at the Mississippi Nissan plant is one among many other recent high-profile unionization attempts which have also failed in the US: Walmart, America’s largest private employer, has repeatedly repelled attempts by its workers to unionize. In some cases, Walmart has even closed stores where it suspected workers were “organizing,” though it maintained that it closed those stores because of plumbing problems. (Walmart reopened those stores months later after a union on the behalf of the laid-off workers filed a complaint with the NLRB.) Amazon has stamped out unionization attempts too.

 

 

But Walmart and Amazon are in plenty of company with American business. As of 2016, just 6.4% of American workers in the private sector belonged to unions, which ostensibly negotiate on the behalf of all card-carrying members to secure better working conditions, pay, health benefits, injury compensation, and retirement plans from employers through collective bargaining. In 1983, when the Bureau of Labor Statistics first began calculating union representation, 20.1% of private-sector workers belonged to a union. In 1945, around 33% of the American workforce belonged to a union.

 

 

 But higher earnings in unions, and in countries with higher unionization rates, do not capture the benefits workers with union members receive. Teresa Ghilarducci of The Atlantic writes that “unionized workers are 28 percent more likely to be covered by employer-provided health insurance and 54 percent more likely to have a pension.” In addition, she notes that countries with high unionization rates have more intergenerational mobility and, resultantly, less income inequality. In the US, as unionisation has gone down, income inequality has gone up.

 

 

Why, then, does US labor post such a low union membership rate given the putative benefit unions yield to their membership?

 

 

With the development of industrialized economies into service economies so that increasingly fewer industries warrant large labor forces more likely to band up and demand better conditions, which, in effect, has atomized the worker, the US workforce has still lagged behind other industrialized economies in union membership. In 2014, Sweden’s union-member rate was 67.1%, Canada’s was 26.3%, Japan’s was 17.6%, and Australia’s was 13.3%, according to OECD. In 2014, the US’s unionization rate was somewhere around 10.7% (according to OECD) or 11.1% (per BLS).  In 2016, BLS tabbed union representation in the US economy at 10.4%.

 

 

The discrepancy in the types of industries employing a country’s workforce complicates comparison between union membership rates in different countries. On the basis of an economy’s major industries, some economies may possess a greater disposition to unionization than others. For example, it might be expected that Sweden has a higher union representation rate when the Swedish automotive industry employs around 10% of all Swedes. The automotive industry has long fostered conditions under which workers unionized to strike a better deal for themselves: clear division of work between limited ownership and expansive labor, the disparity in pay, and the cooperation among workers integral to production. The American automotive industry, by comparison, employs about 3.8% of Americans working in the private sector. (In white-collar work the disparity in union membership is greater: 74% of white-collar Swedes belong to a union while 13.3% of their American counterparts do.) Even if the US economy is less conducive to unionization given the nature of its dominant industries, this alone does not explain the reason for America’s low-union rate.

 

 

In the thick of the Great Recession in August 2009, when low- and middle-income Americans saw their paychecks shrink, American support of unions fell to its lowest point in polling. Forty-eight percent of Americans approved of them then. During the expansion years of the early- to mid-2000s, union support hovered around 60%. And in October 1953, American support for unions came in at 3 out of 4 Americans.

 

 

In 1953, consider also that about 35% of Americans were union members. That also means that a greater percentage of the American population knew people working in unions. Receptivity to unions in the economy is connected to personal affiliation with unions: if you’re a part of one, or know someone in one, you’re more likely to support unions in general. This self-interested stake in the wellbeing of unions has, to a degree, steeled the American workforce for labor markets with lower union memberships. But a historically low union membership rate has only been autocatalytic for US labor organization, not a proximate factor.

 

 

America’s lesser disposition to unions and labor organization results from a particularly American disenchantment with socialist ideas. Ideals of individual liberty and private property, strong federal support for big business, and racism and classism (often in tandem, and not just in case of white owners vs. minority labor, but also in the instance of older-stock white Americans and fresh-off-the-boat white Americans) have steered American business away from embracing socialism, unlike European countries. Codetermination, for example, when the union sits on the corporate board to represent labor interests, is nowhere to be found at US companies. In Germany it is law.

 

 

The circumstance, passage, and outcome of the Taft-Hartley Act provide a good primer on labor history in the US. The Taft-Hartley Act of 1947 made provisions to the Wagner Act of 1935 passed during FDR’s Administration. The Wagner Act created the National Labor Relations Board to enforce labor protection instead of arbitrating on labor disputes like its predecessor. Before the New Deal protections for American workers, union activities had often been busted by Pinkerton-type agents, for-hire enforcers that companies brought in to intimidate workers and squash labor organization. Oftentimes union-busting became violent, as in the case of a coal miner strike in Ludlow, Colorado. The Wagner Act also stipulated that workers have the right to form and join unions, unions can collectively bargain, and employers must negotiate with unions representing a majority of workers. In addition, it broadened the reach of the NLRB to oversee labor enforcement.

 

 

In 1947 Congress passed the Taft-Hartley Act over the veto of President Truman. It provided the legal framework for right-to-work laws allowing employees to work without joining unions (whereas previously a union may have prevented prospective workers not intending to join a union by coercion of that person or management). The law required workers to give advance notice of a strike and conferred the Attorney General the power to halt a strike if it jeopardized national health and safety, meaning that federal agents could be enlisted to break up union activities (legalizing a government response like its earlier disbanding of the Pullman Strike). It also required labor leaders to file an affidavit with the Labor Department declaring under oath that they were not Communists, which the Supreme Court would later rule was unconstitutional. Those filings identified labor leaders to the federal government — 81,000 of them — and allowed the government to keep tabs on labor activities, another tendril of McCarthyism.

 

 

In the post-WWII economic boom, the Taft-Hartley Act retarded the growth of labor organization. The antecedent to the right-to-work proviso in the law existed in a Texas right-to-work law that the Christian American Association passed in 1935, as Richard D. Kahlenberg of the Century Institute points out. The CAA, founded in Texas by oilman Vance Muse, lobbied on the behalf of businesses against labor organization fearing “white men and white women will be forced into organizations with black African apes whom they will have to call ‘brother’ or lose their jobs.” In effect, the solidarity that white and black workers could have stumbled upon in union organization contained the clause that workers did not have to participate in union activity with black people. The KKK, after all, was anti-union too. Both W.E.B. DuBois and Dr. King noted how integrated unions would have improved race relations. Vance Muse certainly feared integrated unions, like the Knights of Labor, which integrated at its founding in 1869 calling for solidarity among all workers. Instead, the racist origins of weakening unions persisted through the Taft-Hartley Act, precluding the defense that unions could have otherwise been against management’s racial division and conquest: unions would have homogenized wages, flushing racial hostility and closing the wealth disparity between white and black Americans.

 

 

The loss of manufacturing jobs in the US has accelerated the decline of unions, as has the American predisposition to low unionization rates, but those low rates existed primarily because of the government’s abetment of anti-labor policies. Ever a heterogeneous workforce, American labor did not as easily fall under the canopy of interchangeable labor that lent more to unionization. The policies the government adopted supported management as opposed to labor, that attitude itself mired in animosity towards integrated labor.

Levi Mikel