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Labor Union Membership: The Long Decline Resumed in 2021

By at 21 January, 2022, 12:29 pm

by Raymond J. Keating –

Labor union membership has been on a long decline, and that drop resumed in 2021 after a brief, unique respite in 2020, according to a new report from the U.S. Bureau of Labor Statistics.

Indeed, as a share of employment, union membership in the U.S. peeked in the early 1950s at roughly a third. The subsequent decline was gradual for about two decades, but then accelerated starting in the early 1970s. And the decline has mostly occurred in the private sector.

According to Unionstats.com, labor union membership stood at 24.0 percent of wage and salary workers in 1973. It registered 10.3 percent in 2019, and blipped up to 10.8 percent in 2020. As the BLS now reports, that moved back to 10.3 percent in 2021.

The 2020 move up in labor union membership was due to the fact that the pandemic hit nonunion workers harder than unionized workers.

As for the private sector, the percentage of workers that were union members registered 24.2 percent in 1973. That had plummeted to 6.2 percent in 2019, and moving up slightly to 6.3 percent in 2020.

The BLS notes that it came in at a mere 6.1 percent in 2021.

Finally, it’s worth noting that the most recent trend among government workers hasn’t worked in favor of labor unions either. Public sector union members had grown from 23.0 percent of government workers in 1973 to a peek of 38.7 percent in 1994. It meandered for a number of years, registering 37.4 percent in 2009. However, since then, the move has been downward, albeit at a slow rate.

It fell to 33.6 percent in 2019, bumped back up to 34.8 percent in 2020, and fell back to 33.9 percent in 2021.

Given the political influence of labor unions, it’s unlikely that a sharp decline in the union share of government workers is likely. But that very relationship makes the relatively small decline of recent years even more surprising, and noteworthy.

Numbers are Down, POLITICAL Influence Remains High

It’s politics where labor unions continue to thrive, even as they become less and less relevant in the economy. Given the loss of influence at private-sector bargaining tables, labor unions have worked to maintain, or increase, their political influence, so that they can use government actions to gain their desired ends.

Whether it is efforts to advance the PRO Act in Congress or at the state level, or to influence regulatory policies at the Department of Labor on independent contractors, wages and a host of other workplace issues, Democrats and President Biden have prioritized the agenda of unions in word and through actions.

In the end, the waning of labor unions in the marketplace has been a positive development for entrepreneurs, businesses and workers, as labor unions work to raise costs by, for example, restricting the supply of nonunion workers, by limiting workplace flexibility and innovation, and in pushing for higher levels of compensation without gains in output, artificially raising the costs of labor.

Ironically, by increasing compensation for their members without commensurate increases in productivity, labor unions sealed the fate of unionized workers by increasing demand for nonunion workers, by shifting investment resources to nonunion businesses and industries, and by increasing investment in automation. And given their political activities, labor unions have worked hard at undermining business creation and expansion, and therefore, restraining job opportunities and income gains for American workers, via a policy agenda usually focused on higher taxes, increased regulation, trade protectionism, and more government spending.

Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council.

 

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