Labor Union Membership and Power:

A Study of the Factors Effecting the Rise and Fall of

Unions

Joel Nybeck
New York University
Leonard N. Stern School of Business
 Labor Union Membership and Power

Abstract

Since the emergence of modern capitalism in the United States in the early 1800’s

employees have always explored ways to increase their bargaining power and effectively

improve both their working conditions and their lifestyle. Peaking in the mind 1950’s at

just over 28% of the workforce belonging to a labor union,1 union membership has been

on the steady decline with the healthcare, construction, entertainment, and automotive

industries holding the majority of union workers today. The factors that contributed to the

decline of union membership and the future of membership numbers can be forecasted

based on the most statistically significant factors discovered here.

Figure 1

1
See Figure 1, http://www.clevelandfed.org/research/trends/2007/1107/04ecoact-1.gif

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 Labor Union Membership and Power

Labor Union Membership and Power:

A Study of the Factors Effecting the Rise and Fall of Unions

Labor unions have historically provided their fair share of positive and negative

effects on society as a whole, but the recent economic environment is forcing the

management of companies heavily reliant on union-based labor to attempt to renegotiate

outdated agreements. These pressing times have imposed the question of priority between

employment and compensation on union leaders like never before. Labor unions realize

concessions must be made, which will, in turn, pressure the members of unions to

reassess the benefit of belonging to such their respective union. The aggregation of

negative factors being pushed upon labor unions instigates one seemingly obvious

question: how much longer can labor unions exist?

The phrase “dire straights” has been used numerous times to describe the current

condition of labor unions, but this is nothing new to those who have followed corporate

culture, management styles, or macroeconomic movements at some point in the past 20

years. The remaining few unions managed to utilize connections to the Mafia and illegal

activities to stay powerful from the Prohibition until the early to mid-1990’s. More

recently unions have gained political power by supporting Democratic candidates in

return for “friendly” legislation and votes; however, their political power too is waning.

Arguably since the early 1970’s labor unions have relied on creative measures to

minimize the decline of their power, so the question that must be posed is: where will

labor unions glean their next extension of their inevitable decline?

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 Labor Union Membership and Power

In short, the “Card Check” Bill2 seems like the only light at the end of the tunnel

in which labor unions currently find themselves. Should this proposal be granted, the

economic and net change in union membership from the passage of the aforementioned

legislation will be derived. But first it is necessary to establish a fundamental

understanding of the quantitative implications of the both macro- and microeconomic

factors as they apply to labor union membership (labor union power will be assumed to

be hold a direct relationship with membership due to the difficult nature of quantifying

such an abstract notion). Starting with company earnings, the difference between private

and public sectors, and other similar factors examined previously by Gerald Mayer in his

2004 article, Union Membership Trends in the United States. Tapping the vast amounts

of research tangent to the this subject, and coupling that research with statistics

accumulated by the U.S. Bureau of Labor Statistics the significance of various factors

should quickly become evident.

The benefits of this research have much farther-reaching implications than those

recognized at first glance. Priceless insight similar to that of Robert Putnam’s 1995,

article Bowling Alone: America's Declining Social Capital, is waiting to be uncovered.

The audacity to make concrete assertions about the influencing factors of union

membership and predictions about the future of union membership and power will

provoke criticism from a myriad of sources. These criticisms have the potential to bring

collaboration between economists, psychologists, and sociologists in a way that has never

completely replicated in the past. Each perspective brings an important point to the

discussion of social networks, external consequences associated with group membership,

2
Employee Free Choice Act, H.R. 1409, S. 560

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 Labor Union Membership and Power

employee compensation, human motivation, and the human decision-making process.

Even if this research offers an inaccurate analysis of the factors effecting labor union

membership, it should act as a spur stimulating an academic discussion of decision-

making on a large scale, perhaps one of the most opaque segments of society.

Bibliography

Mayer, Gerald. “Union Membership Trends in the United States.” Congressional

Research Service, The Library of Congress (2004).

Putnam, Robert D. “Bowling Alone: America's Declining Social Capital.” Journal of

Democracy 6.1 (1995) 65-78.

Union Membership Rates. Chart. Cleveland: Cleveland Federal Reserve, 2007.