Happy Labor Day: But What the Heck Happened to the Unions?

Members of the Ironworkers Union in Labor Day parade
Susan Watts/NY Daily News Archive via Getty ImagesMembers of the Ironworkers Union march in the Labor Day parade in New York.
Before the deep, deep discounts and back-to-school sales, before it was the end of summer and the start of college football season, Labor Day signified just one thing: respect for America's organized labor. Originally proposed by the secretary of New York's Central Labor Union, the holiday was slowly adopted, state by state, until 1894. That year, the massive Pullman car strike ended with the massacre of 30 people, $80 million in property damage, and a national labor force that was furious. In an attempt to smooth things over, Congress and President Grover Cleveland rushed through a bill that made Labor Day a federal holiday.

Almost 120 years later, unions are in the middle of a steep decline. According to the Bureau of Labor Statistics, in 2012, the total number of union members fell to 14.3 million, or 11.3 percent of U.S. workers -- the lowest level since 1916. It isn't hard to see why: On one side, an increasing number of states have enacted right-to-work laws and have placed restrictions on collective bargaining. At the same time, a growing number of employers across the business spectrum have actively fought union formation. Even Northeastern University hired a union-busting law firm to deal with faculty members who were attempting to collectively bargain.

On the other end of the employment spectrum, Walmart, a company that has been repeatedly called out for its low, low wages, has made an art out of fighting unions. As Bloomberg reported late last year, America's largest private employer has closed stores that voted to unionize, packed various sections with anti-union workers, and -- in one especially stunning case -- decided to close the meat counters at 180 stores when its butchers voted to unionize. It routinely bars union organizers from Walmart property, forces employees to attend anti-union meetings, and threatens to replace employees who try to unionize.

However, unions also bear some of the blame for their decline. In the face of an anti-union PR blitz that has tagged them with a host of shortcomings, their response has been weak and, at times, tin-eared. Their biggest ad push of recent years was based around a commercial titled "Work Connects Us All," which pointed out the value of jobs, but failed to show how jobs were connected to unions.

Even as unions have declined, though, a growing body of research has demonstrated why they are important to the nation's workers. Earlier this year, for example, the Bureau of Labor Statistics noted that full-time workers who were unionized earned, on average, $943 per week, compared to $742 for those who weren't.
Meanwhile, news outlets have noted that, as worker wages have fallen, corporate profits have soared. The Economic Policy Institute connected the dots between these trends, noting that the decline in union membership has almost perfectly mirrored the growing income inequality gap. In other words, as union membership drops, the share of income going to the top 10 percent of households has risen in almost perfect lockstep.

Recently, unions have begun a fresh push to slow their fall, targeting younger workers and offering to help non-unionized workers in their struggles for better work conditions. And, with a growing number of non-union minimum-wage workers employing union tactics to publicize their need for higher pay, it seems like unions might be on the edge of finding fresh relevance. Assuming, of course, that they can stay out of their own way.

Bruce Watson is DailyFinance's Savings Editor. You can reach him by e-mail at bruce.watson@teamaol.com, or follow him on Twitter at @bruce1971.

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