Since the middle of the last century, the American labor movement has been in steady decline. In the early 1950s, around one-third of the United States' total labor force was unionized. Today, just one-tenth remains so. Unionization of the private sector is even lower, at five percent. Over the last few decades, unions' influence has waned and workers' collective voice in the political process has weakened. As a result, wages have stagnated, income inequality has increased, and the American political conversation has narrowed.
The decline of American unions was not preordained. In the first decades of the postwar period, the organizing effort simply could not keep pace with the frenetic rate of job growth in the economy as a whole. Even if the labor market had simply continued expanding with no broader changes in the economy or politics, organized labor would have struggled to sustain its influence.
As it turned out, economic and political conditions got much worse. In the 1970s and into the 1980s Western Europe and the United States were gripped by slowing productivity growth and rising unemployment. And U.S. manufacturers faced increasing competition from European and Japanese exporters in the heavily unionized aerospace, auto, and steel industries. The government also deregulated the transportation and telecommunications industries by relaxing price controls, licensing regulations, and restrictions on market entry. To save jobs, unions often made concessions, accepting pay cuts and pay freezes, lower cost-of-living wage adjustments, and shorter contract periods.
Labor's decline was not set off by impersonal market forces alone. In the 1970s and 1980s, difficult economic conditions and the growing cost of union contracts led many employers to adopt illegal and legal tactics to fight organizing attempts. Labor law violations mounted, including frequent cases of discrimination, coercion, and the dismissal of workers who were union supporters. Employers also prevented unionization by holding legal mandatory anti-union meetings with workers, distributing anti-union literature, and delaying the negotiation of labor contracts following successful organizing drives.
To be sure, the unions themselves often added to their troubles. U.S. labor relations were adversarial. Unlike some of their European counterparts, American unions were unable to develop collaborative relationships with employers to improve training or management decisions. Labor's record as a politically progressive force was also uneven. Unions maintained only an arm's-length relationship with the civil rights movement, the women's movement, and the protest movement against the Vietnam War.
Although workers may be unhappy with recent trends, not everyone is mourning labor's decline. Mainstream economic theorists see union membership as too costly in today's economy. Many economists argue that outsized union wages reduce employment and lead to higher prices for consumers. The Nobel Prize-winning economist Gary Becker, for example, has written that unions are slowing the United States' economic recovery and making it harder for the country to compete overseas.
In fact, unionization imposes only a modest drag on the economy. The economists Richard Freeman and James Medoff have calculated that in 1980, when a quarter of the work force was covered by collective-bargaining agreements, organized labor reduced the gross national product by just one-fifth to two-fifths of one percent.
Further, the social and economic benefits of unions outweigh such costs. For one, research shows that union membership in the private sector increases wages by 10-20 percent. Unions also equalize pay within companies and improve pay outside their own workplaces. Nonunion employers in highly unionized industries, for example, often raise the wages they pay to avert organizing efforts.
Beyond supporting policies that protected workers' interests, unions also amplify their members' voices. In the United States, as elsewhere, the poorer a person is, the less likely he or she is to be politically involved. But unions encourage their members, many of whom are blue-collar, to vote, thus drawing otherwise atomized individuals into an organization and providing them with the training and resources necessary to pursue collective goals.
Labor retains this ability to mobilize today, but the labor vote itself has weakened. Decades of declining membership have meant a shrinking base to rally. Although belonging to a union remains a strong indicator of whether a person will vote, unions' total impact on elections has been greatly reduced. In the upcoming election, for example, union support for President Barack Obama is less important than it would have been for Democratic candidates in years past.
With labor's decline, economic elites have grown more influential in the political system and the tie between national economic prosperity and working-class prosperity has been severed. Rebuilding the power of working people -- if it is still possible -- will need to involve reviving labor's dual economic and political role. And the current era of slow wage growth (and, now, high unemployment) might provide an opportunity for just that. "Inequality" has entered the American political lexicon, partly as a result of the Occupy Wall Street protests that began in mid-2011. Their message will be difficult to sustain, however, without an institutional supporter intent on politicizing the problem. If unions speak out against these economic injustices, they can reclaim their most progressive role, advocating not just for their members, but for all working people.
Bruce Western is Professor of Sociology and Director of the Malcolm Wiener Center for Social Policy at the Harvard Kennedy School of Government. Jake Rosenfeld is Assistant Professor of Sociology at the University of Washington. The fuller essay that this is based on will appear in the May-June Foreign Affairs.