“Well, in our country,” said Alice, still panting a little, “you’d generally get to somewhere else—if you run very fast for a long time, as we’ve been doing.”
“A slow sort of country!” said the Queen.
“Now here, you see, it takes all the running you can do, to keep in the same place. If you want to get somewhere else, you must run at least twice as fast as that!”
– Lewis Carroll Alice’s Adventures in Wonderland & Through the Looking-Glass, 1865
As Labor Day approaches, organized labor is enjoying a moment. Last year, unionized auto workers, UPS drivers, actors, and screenwriters bargained big wage increases. Workers at 481 Starbucks cafes have voted to unionize. “Union Joe” Biden declared himself “the most pro-union president in US history” and put labor in the spotlight when he became the first president to walk a picket line.
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Seven union presidents spoke on the opening night of the Democratic National Convention. They reminded Americans that unions support low-wage workers, strengthen democracy, and promote a culture that honors labor. It is not surprising that Gallup finds union popularity nearing record highs. Even a few conservatives now tout the benefits of labor unions.
From these headlines, you might not suspect that private-sector unions have been declining for seven decades. In 1954, 35% of private sector workers belonged to unions. Today it is six percent and falling – less than half the pathetic rate that moved Congress to pass the National Labor Relations Act (NLRA) in the first place.
Laws Built to Grow Unions Now Keep them Small
If private sector labor unions are dying, why not just let them go? After all, unions can undermine workplace trust, protect low performers, and stifle innovation. Are they really worth restoring?
Progressives have a well-rehearsed explanation for labor’s relentless decline. Companies moved factories offshore. Then they broke the law to prevent new unions from organizing. There is abundant evidence for this account. I spent a decade organizing unions many years ago. I witnessed plant closures weaken existing unions and management lawbreaking suppress new ones. It’s infuriating – but it’s not the entire story.
This explanation overlooks how the NLRA restricts union growth. It pretends that labor laws written for the world of the 1930s can work in an entirely different economy.
The emergence of a service, finance, and information economy transformed work, workers, and workplaces. Our economy is more diverse, digital, and distributed than Congress could possibly have imagined when it passed the Wagner Act (aka the NLRA) in 1935. Everything changed except our collective bargaining framework.
Congress passed the Wagner Act to address the rise of massive industrial and transportation companies that rendered obsolete craft unions designed for a more artisanal economy. Today however, instead of rethinking the obsolete architecture of the NLRA, organized labor has invested decades of political capital attempting to reform its most irritating features. Labor Law Reform in the 1970s, the Employee Free Choice Act in the 2000s, and the PROAct today are all designed to make NLRA-style organizing easier.
Unions have set their sites far too low. If passed, these laws would not enable labor to rebuild a vibrant movement. They would not end the Red Queen’s race.
The NLRA makes three assumptions that keep private sector unions weak regardless of how fast they run. These take a bit of explaining, so this post will start with the first: that the NLRA assumes that companies are nonunion by default.
The next post will explore two further assumptions: that the NLRA only assigns bargaining rights to workers in a single workplace within a single company. And that it grants exclusive bargaining monopolies and allows the AFL-CIO to ban competition between unions.
A third post will propose some remedies and discuss the politics of achieving meaningful reform. Finally, I will offer some thoughts about unions of public sector employees, which the first three posts overlook.
NLRA Organizing Shrinks Unions
Under the NLRA a company is nonunion by default. If workers wish to bargain pay, they must win a fight for union representation. But owners enjoy representation by default. Investors (who hold their shares for ten months on average) have board representation and the right to a vote on important issues. We do not force investors to “organize” to secure these rights. Workers, who typically remain employed for more than four years, must “organize” if they want representation. This requires them to instigate an industrial insurrection.
Union organizing is a brawl – surely one of the least productive activities ever encouraged by federal law. When I organized workers in factories, hospitals, and hotels, they were incredulous to learn that in order to bargain their pay as a group they had to wage and win a war at work. Organizing campaigns turn friends into enemies. They reduce trust, an irreplaceable asset in modern workplaces. They promote combative personalities into union leadership and often into management. For most workers, it is easier to change jobs than to join a union fight. This is truly an idiotic way to assign bargaining rights.
Organizing is expensive and campaign costs limit union growth. Unions do not need to make money, but they cannot forever defy the laws of economic gravity. Once the cost of organizing exceeds a member’s lifetime value, organizing makes a union weaker, not stronger.
Roughly 70% of organizing campaigns succeed and perhaps 70% of these result in a first contract. This means that unions must pay to organize two workers to yield one dues-paying member. (Assuming that everyone covered by a contract pays dues. In America’s 26 right-to-work states, they do not). If a campaign costs $3,000 per worker and a union generously devotes a quarter of dues revenue to organizing, they need to collect $24,000 to organize one new member. This implies $1.4 million in dues revenue to finance the average organizing drive of 62 workers. Facing these economics, unions prefer tiny bargaining units (the median organizing campaign in recent years is only 24 workers – meaning that half are smaller). Facing these economics, large companies have little to fear. They know that unions are not going to risk organizing themselves to death.
Union organizing does not scale. Unions attempt to organize between forty and ninety thousand private sector workers each year. This rounds to zero in a private sector labor market of 135 million workers. It is impressive that 481 Starbucks cafes have voted to unionize – but Starbucks operates 16,482 cafes in the United States. Increasing organizing tenfold would not improve the lives or paychecks of most American workers. And the process is a bureaucratic nightmare. The National Labor Relations Board struggles to keep up with todays’ trivial levels of organizing.
In Part II of this series, I will explore two additional ways that the NLRA weakens private sector unions by fragmenting bargaining and awarding exclusive organizing rights.
Very informative. Changes my attitudes toward unions.