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Latest News - February 2013

February 5, 2013
The decline of the labor union
Source: The Daily Athenaeum
By: Christopher Nyden

Since 1980, union membership in the United States has gone from 23 percent to just 11.3 percent of all workers in 2012. Gallup recorded the approval rating for labor unions at just 52 percent in the United States last year.

In order to explain the fading public opinion of labor unions, one must understand just why they have declined so greatly in the past few decades. Major union industries have had declining markets in the United States, and much of their production has been shipped overseas.

The old steel towns throughout Pennsylvania and Ohio serve as dismal reminders of the type of transformation and effect this change has had on the United States. Abandoned factories stand in many towns along the Rust Belt, giving us a slight glimpse of the buildings that gave America the strongest middle class in the world.

Cheaper labor in an increasing global market has encouraged companies to seek production elsewhere. Our ever-increasing trade with foreign economies has only exacerbated the number of jobs going overseas.

These changes are especially relevant as we discuss the future of our economy. The demographics have changed, and we must ask ourselves an important question: Are labor unions still needed in the United States?

For many the answer is obvious. Labor unions have served their purpose. We have our 40-hour work week. We have basic guarantees for good conditions and a minimum wage. There is not exploitation of child labor anymore. The worker has guaranteed income after retirement.

With less purpose and constantly decreasing union membership, labor unions just should not have as much power anymore. However, these arguments ignore just how strong of a purpose labor unions must serve today.

While it could certainly be argued that many jobs have been taken overseas because unions simply asked for too much, it is important to note many laborers have received fewer gains in recent decades. According to the Economic Policy Institute (EPI), productivity grew 80 percent from 1979 to 2009, but the median wage for workers only rose by 10.1 percent. In other words, workers have been much more efficient but have seen a small proportion of those gains. On the other hand, EPI found average annual earnings for the top 1 percent grew by 156 percent from 1979 to 2007.

This is dangerous for the United States because it reduces the purchasing power of the average citizen. Executives deserve to be compensated for their innovation. Technology produced in the past 30 years has given us enormous gains in productivity. But that income is not produced alone by management, and our economy suffers from imbalance when only the top classes are rewarded.

The people most likely to consume goods and put money directly back into the economy are those in the middle class. Unless they are justly rewarded and unless they have someone fighting for them, they will continue to spend little, stalling our growth further.

Undoubtedly, there have been circumstances where unions have abused their circumstances. But this only makes the case that unions must compete just as businesses do. Just as companies like Lehman Brothers failed during this recession, unions must fail as well. It is only through this competitive system that our economy remains strongest.

If a union becomes too greedy or it stops representing the best interests of its members, those members should have the right to be represented by another union. The system should not be trashed; it simply needs to be fixed.

Before Hostess recently filed for bankruptcy, they attempted to come to agreements with the Teamsters union and the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union. Teamsters reached an agreement with Hostess.

The bakers’ union, however, did not. As a result, their 5,000 employees and the Teamsters’ 6,700 are now out of jobs. Had the bakers’ union members been allowed more flexibility and choices in their union membership, Hostess might still be in business.

What must be emphasized is that conditions and benefits that we now take for granted were not just given away by employers. They had to be fought for, and there is a constant battle to protect them. Unions will have to make concessions, and they deserve to be chastised when becoming too greedy.

But the middle class has taken a hit for too long, and it is time to reverse this trend. Labor unions should lead the way once again.

 

 


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