The Case For Labor Unions

The Case for Labor Unions:

Labor unions in the United States - Wikipedia

One of the most controversial issues in America today is the receding prominence of private-sector labor unions in the Midwest. This decline and the consequences thereof begs the question, are labor unions a worthwhile asset to uphold, not only to the American economy but to American workers, or are they a net liability for the working class? Despite the negative repercussions that some unions may have, those negative effects aren’t impossible to fix or offset. Overall, unions are a worthwhile and valuable asset to society. In this paper, I will go over what labor unions are and the reason for their decline, the negative connotations associated with them, and the positive socio-economic effects that they appear to have. 

Before we talk about the effects of unions and their controversy in contemporary  American politics, what are labor unions?  “Labor Unions” is a fairly loaded term, so we must define it from the start so we have the same reference point. Labor unions are organizations that represent workers and their interests to protect them and make advancements in their pay and benefits. Pragmatically, unions bargain for higher wages, healthcare benefits, working conditions, and more hours for their workers. However, unions are on a decline in the United States. According to the Bureau of Labor Statistics, there are currently 14.6 million union members, which is down from 17.7 million in 1983. Further illustrating this reality, the percentage of workers in a union has been halved, around 10 percent of workers today are in a union, down from 20, again from 1983 (Bureau of Labor Statistics) . Finally, Compared to other countries, in 2016 the United States had the 5th lowest percentage of labor workers in the OECD (The Organization for Economic Co-operation and Development stimulates trade between countries. Comparable first world countries are involved, thus comparing ourselves to the other countries in this list can be useful when looking at or considering policies that may be worthwhile). This decline is largely borne out of the decline of manufacturing jobs in the rust-belt (Michigan, Wisconsin, Pennsylvania, etc) which, itself, is largely borne out of transnational trade deals such as NAFTA (the North American Free Trade Agreement, which stimulates trade between Canada, USA, and Mexico and has resulted in outsourcing of manufacturing jobs to Mexico). By looking at the decline of a specific industry, and the correlated decline between unions, we can see that unions haven’t specifically been on the decline, but rather, it is jobs that are simply more likely to have unionized workers that are declining. However this is also a result of various Ronald Reagan Era union busting policies, such as vetoing the agricultural relations act which would’ve given the industry the right to collectively bargain, firing 13,000 air traffic controllers on strike, completely destroying their union, and banned them for life from working a government job, Nevertheless, the culmination of these factors has resulted in a decrease in the prominence of unions, which to some people, is a good thing. Now that we know what labor unions are, and their contemporary decline in the United States, what are some of the negative effects of them? Why are some people okay with, or even encouraging, a decline in unions? 

There are a myriad of reasons why any given person may dislike the idea or the effects of unions. Firstly, according to Labor Unions, Political Representation, and Economic Inequality by John S. Ahlquist, labor unions may result in higher inflation and unemployment. Ahlquist continues, “High levels of decentralized bargaining can lead to higher unemployment and inflation (…)” (Ahlquist, 10). Here we see that a problem arises if unions are “decentralized” and not a streamlined organization. He follows up and explains what “decentralized” unions are, “If unions and firms were to bargain at the industry or sector level, then unions might better internalize the cost of their wage settlements, ideally leading to moderation, more egalitarian wage outcomes, and lower unemployment and inflation” (10). So what he’s saying here is that yes, some unions lead to higher unemployment and inflation, but we can also see that this isn’t specific to unions as a whole. This can be fixed by having unions more focused on a specific industry, rather than spanning multiple industries or even state-wide. This aspect should be considered if we someday want to increase the prevalence of unions, organizing them at a more local level to help mitigate some of these challenges.

Another reason that someone may be opposed to unions, and a problem that unions have in the United States in particular, is that unions protect some workers more than others. In the same paper, Ahlquist elaborates on this issue: “In some countries, notably France, Portugal, and Spain, the wedge (which is the difference between the union destiny rate and the proportion of workers covered by union-negotiated contracts) is considerable, and union presence in the economy is unequally distributed across firms and sectors” ( 10). What Ahlquist is talking about is also something that we have in the United States. Unions are not a nationwide phenomenon, and are heavily saturated in some industries, but nonexistent in others. Manufacturing, for instance, is heavily unionized, as well as many public sector jobs such as teachers, firefighters, and policemen. However, in other industries, such as the service industry, the prevalence of unions are essentially non-existent. This leads to some workers in certain industries having more protections than others. This, in turn, leads to even more economic inequality, even within the working class itself, which is the opposite thing unions strive to do. However, as you may deduce yourself, this problem can be assuaged by unions being a more commonplace option for workers in all industries. While this may seem like a distant thing to aspire to in the United States, it’s how many other countries with high union density (Germany, Iceland) have overcome this inequality in working rights of the working class. This way, no matter which industry you work in, you won’t feel left behind in regards to your protections, benefits, and pay.

Now that we’ve acknowledged some problems people may have with labor unions, why would any country go through those obstacles for them? What are their redeeming qualities? There is an incredible amount of economic inequality throughout the United States. Such socioeconomic inequality is a very unique issue to the United States, as it is the only developed, first world country with its inequality of this magnitude. According to the Pew Research Center, economic inequality has doubled from 1989 to 2016. There are a number of policies that can be implemented to fight this trend, including investments in education, affordable housing, transportation, and the expansion of labor unions and protections federally. Referring back to Ahlquist, he mentions that while there may be some gaps in connecting causality, “In rich democracies, unionization correlates with a greater distribution of income and economic risk, demonstrating that unions can be political actors” ( 2). As Ahlquist points out, many countries with a high density of unionized workers, such as Iceland, Finland, Denmark, Germany, have a correlation with a greater distribution of income, less economic inequality, and higher economic mobility for the working class (which is a measure of how easily from the lower class can get to middle or upper class, and vice versa, currently the United States has extremely low economic mobility) Unions help solve these problems by negotiating for higher pay and benefits for blue collar and low skill work, giving the working class more economic opportunity with higher wages and living standards. Economic inequality in the United States is a deep, systemic issue and labor unions won’t solve all of its problems, but labor unions and expansions on workers protections are a crucial part of the path towards a more fair economy.

Finally, unions are a symbol of workers’ rights. In the hyper-capitalist economy that we live in today, the common worker does not have negotiating or bargaining power in order to secure a living wage and benefits for themselves. Unions ratify these problems by pooling the collective power of thousands of workers. This collective bargaining exceeds the sum of its parts, ensuring the needs of workers are at the very least, pressured. According to The Union Threat by Mathieu Taschereau-Dumouchel, the mere existence of a powerful union(s) has such influence that it spills over to the non-unionized sectors of the economy, resulting in workers who aren’t privy to a union to receive many of the benefits that other workers have fought for in order to prevent or discourage unionization from occurring within non-unionized firms. While this phenomenon results in a lower profit margin for non-unionized firms, it also results in decreasing the economic inequality that’s riddled through all industries in the United States, which I personally believe is the more important problem to address, because the problem of economic inequality isn’t solved with making sure companies’ profit margins are as high as they can be.

In this paper, I went over what unions are and the many reasons for their decline, the potential negative effects/connotations associated with unions, and the potential positive effects of unions and expanding workers’ rights. We can see evidence through this by looking at how other comparable OECD countries treat unions, the positive outcomes unions tend to create, and the key role unions can play in fixing wealth inequality in America. Through researching this topic, I believe that the negatives that unions pose can be sidestepped by a developed, first world country such as the United States, as many other countries have done, and that the remaining negatives are vastly outweighed by the positive effects. For this reason, I think that unions are a net benefit to the American economy, not because it grows the economy the most cutthroat, efficient way, but because it makes the economy more just and enables the working class to be more economically opportunistic. In America, the land of the free, that is the type of result we should strive for, which is why I believe that labor unions are a very worthwhile asset to uphold in our economy.

Works Cited

Axelrod, Tal. “Union Membership Falls to Historic Low.” TheHill, 18 Jan. 2019, thehill.com/homenews/news/426026-union-membership-falls-to-historic-low.

Gunn, Dwyer. “What Caused the Decline of Unions in America?” Pacific Standard, 24 Apr. 2018, psmag.com/economics/what-caused-the-decline-of-unions-in-america.

John S. AhlquistSchool of Global Policy and Strategy. “Labor Unions, Political Representation, and Economic Inequality.” Annual Reviews, 9 Mar. 2017, http://www.annualreviews.org/doi/full/10.1146/annurev-polisci-051215-023225. 

Oecd. “OECD Trade Unions Statistics .” Trade Union, stats.oecd.org/Index.aspx?DataSetCode=TUD. 

Schaeffer, Katherine. “6 Facts about Economic Inequality in the U.S.” Pew Research Center, Pew Research Center, 31 May 2020, http://www.pewresearch.org/fact-tank/2020/02/07/6-facts-about-economic-inequality-in-the-u-s/. 

Taschereau-Dumouchel, Mathieu. The Union Threat. 2020, http://www.mathtd.info/files/papers/The%20Union%20Threat/paper.pdf. 

Union Members Summary.” U.S. Bureau of Labor Statistics, U.S. Bureau of Labor Statistics, 22 Jan. 2020, http://www.bls.gov/news.release/union2.nr0.htm.

The Case For Labor Unions

Labor unions

Published by Griffin Shufeldt

I'm an economics and political science student, writing about what I've learned and what's interesting to me.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: