Why has union density declined?

► John Commons  Union growth is cyclical, structural,and institutional ► Cyclical: Economic factors that affect labor demand ► Structural: Demographics, industrial composition, part-time vs full-time ► Institutional: laws, enforcement, type of government

Structural Factors ► Female Labor Force Participation ► Minority population growth ► Education ► Shift in population South and West ► Job growth in traditionally nonunion sectors (services, retail) ► Job declines in traditionally unionized sectors (manufacturing)

Structural Factors: Assessment ► Female Labor Force Participation: small impact, women more likely to vote union ► Minority population growth: small impact, blacks more likely to vote union, Hispanics mixed

Structural Factors: Assessment ► Education: small impact due to union growth in teachers, government employees, health professionals

Structural Factors: Assessment ► Job growth in traditionally nonunion sectors (services, retail): IMPORTANT Service11.9%19.8%31.0% Retail14.9%16.6%17.8% ► Job declines in traditionally unionized sectors (manufacturing): IMPORTANT Manufacturing33.7%22.4%13.4% Trans/Util8.9%5.7%5.3%

Structural Factors: Assessment ► But declines in membership density within traditionally unionized sectors are also IMPORTANT Manufacturing25%14% Trans/Util37%23% Trade7%4.5% F.I.R.E.3%1.9%

Structural Factors: Assessment ► Female Labor Force Participation: small impact, women more likely to vote union ► Minority population growth: small impact, blacks more likely to vote union, Hispanics mixed ► Education: small impact due to union growth in teachers, government employees, health professionals ► Shift in population South and West: IMPORTANT ► Job growth in traditionally nonunion sectors (services, retail): IMPORTANT ► Job declines in traditionally unionized sectors (manufacturing): IMPORTANT ► Decreases in density within industries: IMPORTANT

Surveys of union interest among unorganized workers show Broad-based support of about 33% Why don’t they join?

Supply and demand for union services ► Structural changes don’t explain within sector declines ► Institutions have not changed since Taft- Hartley (’47) and Landrum –Griffin (’59) (except for changes in direction of political pressure) ► Economic Model  Demand-side: Workers trade off returns from union representation (wages, benefits, job conditions, job security, ….) against costs (dues, rules, potential job insecurity, ….)

Example LIUNA: Laborer’s International Union of North America

Supply and Demand Application: Dickens and Leonard, “Accounting for the Decline in Union Membership, ” Industrial and Labor Relations Review (April 1985)

Conclusions ► 1/3 of decline due to decreased economic growth ► <1/3 of decline due to decreased organization rate Org rate = percent of unorganized workers who participate in an election ► 1/4 of decline due to decrease in union success rate in certification elections Success rate = percent of pro-union votes on certification election

Problem ► Is decreased union effort and success due to declining worker demand, declining union supply, or rising firm resistance? ► Farber and Krueger, “Union Membership in the United States: The Decline Continues”

Data ► Nationwide surveys of union sentiment in 1977, 1984, 1991, 1992 ► Is decline due to decrease in proportion expressing interest in unionization or an increase in proportion who want unions but cannot get services (frustrated demand)?

Venn Diagram of Union Interest ► U= In union or notD=Want union or not U=1 D=1 U=0 D=0 U=1 D=0 U=0 D=1

Venn Diagram of Union Interest ► U= In union or notD=Want union or not U=1 D=1 U=0 D=0 U=0 D=1

Conclusion ► Decrease due to decreased interest in unionization, holding demographics, industry structure constant. ► Farber and Krueger believe there is no evidence of decreased union density due to increased anti-union animus by firms.  (Unless decline in pro-union sentiment is driven by firm actions)

Evidence on Union Supply ► Fiorito and Jarley, IRRA 55 th Annual Proceedings, 2003 ► 1995: new AFL-CIO leadership pledges $20 million for organization ► Unions need to add 300,000 workers per year to maintain density ► Little evidence of rising effort or membership after John Sweeney’s call to organize

Theory of Union Supply ► Farber, “ Union Success in Representation Elections: Why Does Size Matter?.” Industrial and Labor Relations Review (January 2001) Facts: ► Union organization effort declined precipitously since the mid 70s. ► Average size of unit in elections declined over time ► Union success on certification elections fell ► Union success fell most in large firms.

Theory of Union Supply ► Farber, “ Union Success in Representation Elections: Why Does Size Matter?.” Industrial and Labor Relations Review (January 2001) Conclusions: ► Unions would be expected to face declining win rates over time as the most promising prospects are organized first. ► Decrease in union organization effort is consistent with the declining supply of promising prospects ► There has always been a lower union success rate in large firms. The growing gap in election success rates between large and small bargaining units is consistent with a simple application of the law of large numbers when probability of success is <.5 ► Could also be that large firms fight harder against unions.

Management Resistance to Unions: How Important is it? ► Kleiner, JLR (Summer 2001) ► Firms can resist union organizational efforts through carrots and sticks ► Carrots (wages, benefits, revenue sharing, participatory management, …) ► Sticks include:  Hiring consultants (annual expense $200 million)  Legal resistance  Illegal resistance

Evidence of rising illegal resistance ► Rising importance or worker reinstatement due to illegal firing ► Rising 8(a)(3): Union discrimination; and 8(a)(5): good faith bargaining filings ► Minnesota sample of 26 contentious organization drives  14/26 led to NLRB investigations  Union successful in only 3/26 cases  Kleiner citing Freeman: 40% of union decline due to employer resistance

Why would firms risk illegal activity, penalties? ► Penalties too low ($2,733/worker)  Low compared to some other federal violations ► Returns to resistance can be very large

Richard Hurd. “Union Free Bargaining Strategies and First Contract Failures” ► Even if union wins certification election, firm may be able to avoid bargaining  About 25% of certifications fail to result in a first contract ► Certification gives the union exclusive rights to represent the bargaining unit for minimum of 12 months (contract bar), maximum of three years. ► After 12 months, if union fails to get a contract, employees may ask for decertification

Bargaining delay strategies ► Technical refusal to bargain  NLRB decisions on bargaining unit, remedies on election conduct not appealable  ULP decisions are appealable  Refusal to bargain leads to ULP charge, appeals can drag out process  Example: IBEW and Tempco Electric Heaters

Bargaining delay strategies ► Defiant bargaining  Violate requirement to bargain in good faith because benefits outweigh costs  Example: IAM and S&S Screw ► Evasive bargaining  Attempt to comply with good faith bargaining while dragging out the process  Example: SEIU and Freedom Crest Nursing Home

Bargaining delay strategies ► Peremptory bargaining  Adopt nonnegotiable terms that will not be acceptable to the Union  Example: BCTW and Dawn Frozen Foods  Nearly 75% of failures to reach first contract use these methods, 18% of new certifications