Rise of the Union Phoenix?


Are Unions Rising From The Ashes?


For the current generation of workers, the idea of a union is a foreign concept. Something that their grandparents may have been involved with. An archaism from a simpler time, or something once needed to protect workers from an all-powerful company. 


Ronni Sandroff, writing in Investopedia, explains "Winning gains for all workers and citizens—such as a shorter workday and a minimum wage—has been a key part of union activity. In 1866, the National Labor Union was created with the goal of limiting the workday for federal employees to eight hours.7

 However, the private sector was much harder for unions to penetrate.12

With a continual flood of immigrants coming into the country, the price of labor declined. One group was often pitted against another to keep wages down. When Irish workers won raises in pay from the railroads, for example, Chinese workers were brought in to replace them."

The decline of the U.S. Labor Movement


Describing the decline of the U.S. labor movement, History.com tells us "This (the decline) was ultimately economic, not political power, however, and as organized labor’s grip on the industrial sector began to weaken, so did its political capability. From the early 1970s onward, new competitive forces swept through the heavily unionized industries, set off by deregulation in communications and transportation, by industrial restructuring and by an unprecedented onslaught of foreign goods. As oligopolistic and regulated market structures broke down, nonunion competition spurted, concession bargaining became widespread and plant closings decimated union memberships. The once-celebrated National Labor Relations Act increasingly hamstrung the labor movement; an all-out reform campaign to get the law amended failed in 1978. And with the election of Ronald Reagan in 1980, there came to power an anti-union administration the likes of which had not been seen since the Harding era".


Union popularity on the rise


The COVID-19 pandemic has had multiple impacts on society and in particular the employment sector which could not have been imagined. The pivot to and the acceptance of remote work, the realization that "remote learning" is not as easy as we thought it would, and, perhaps most importantly to employers, the dramatic switch in power from the employer to the employee are some of these unforeseen consequences. 


As reported by cnbc.com, "Between October 2021 and March of this year, union representation petitions filed at the NLRB increased 57% from the same period a year ago, according to recent data from the U.S. National Labor Relations Board. Unfair labor practice charges increased 14% during the same period.


More than 250 Starbucks locations filed petitions, and after notching a first win late last year, 54 Starbucks company-owned stores have formally organized. Workers at an Amazon warehouse in New York City recently voted to form the first union at the second-largest U.S. private employer and join the Amazon Labor Union. Google Fiber contractors in Kansas City successfully voted to unionize their small office in March becoming, the first workers with bargaining rights under the one year-old Alphabet Workers Union. 


These efforts are resonating with the broader public. A Gallup poll conducted last September showed 68% percent of Americans approve of labor unions — the highest rate since 71% in 1965."


Will this popularity and growth continue?


Obviously, the media love to make mountains out of molehills - is this just another example? 


Writing in Gallup.com, Frank Newport reports "However one does the calculations, the trend in union membership is down, not up, even as we see some signs of increasing union activity. We don't know if or when this interest in unions will increase the number of unionized employees significantly. We do know that it will take more than the formation of unions at Amazon, Starbucks and Apple workplaces to affect the national numbers. Given the 258 million adults in the country, it would take an increase of about three million unionized workers to move Gallup's national estimate of union membership by one percentage point."


In an interview published in the Harvard Gazette, Lawrence Katz pours additional cold water on the union renaissance when he states "If you look at the overall number of elections, it’s not particularly high over the last few years. Obviously, the pandemic slowed it down in 2020 and 2021. This last month has shown a spike in elections. The busiest month in like eight or nine years in union elections was March of this year. So there is a bit of a surge. But if you look at the data on union membership from the Bureau of Labor Statistics, it’s not noticeable yet, at least through 2021. The long-run trends are of a declining share of U.S. workers unionized." 


If the tight labor market persists, the ball will remain in the employee's court, giving them more power and likely feeding the union trend. However, if the government's efforts to rein in inflation results in a recession, the tightness of the labor market will (probably) relax, decreasing labor's power. 


Also, the present public enthusiasm for unions could evaporate with continued inflation and a (likely) campaign by employers to place the blame of higher prices on higher wages (due to union efforts). However, a Pew Research report "recently found that the majority of Americans believe the decline in the share of workers represented by unions has been bad, rather than good, for the country."


The bottom line?


As reported in news.gallup.com, "The future of unions in this country remains to be determined. While a large majority of Americans approve of the idea of labor unions in general, relatively few workers are union members. Strong opposition to unions among Republicans may help forestall changes in labor laws that would facilitate union organizing efforts, despite the intentions of pro-union President Biden. The impact of the currently positive economy (72% of Americans say that now is a good time to find a quality job) could, in theory, cut both ways. Workers may feel freer to risk their jobs in search of better working environments, pay and benefits when they know they are operating in a robust job market. But companies also recognize that they must do more to attract and retain workers, which could lead to actions that might mitigate workers' interest in seeking the benefits promised by union membership."


How can ASN help?


As you can imagine, all of this is of critical interest to us at ASN. We track labor trends and subsequent political and business reactions closely. If you have any questions and would like to discuss any of these issues with us, we would love to talk with you. Just give us call.