January 23, 2022
From Popular Resistance
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We must fix our broken system of labor law.

One of the most important things that could be done to generate a more equitable economy is to dismantle the barriers to union organizing and collective bargaining (McNicholas et al. 2019; Oliver 2021). New data on unionization from the Bureau of Labor Statistics (BLS 2022), coupled with evidence on the value of unions and on workers’ desire to be unionized, reinforce the importance of this goal and the urgent need for policy reforms:

  • In 2021, 15.8 million workers in the United States were represented by a union—a decline of 581,000 from 2019 and well under half what it would be had the share of workers represented by a union (11.6%) not fallen to well under half of what it was roughly 40 years ago.
  • In 2021, after shooting up to 12.1% in 2020 because of pandemic-related employment shifts, the unionization rate dropped back down its 2019 level of 11.6% (down 0.5 percentage points from 2020 to 2021).
  • Unionization rates jumped up in 2020 in large part because of a “pandemic composition effect,” and fell back in 2021 as that effect began to unwind. The jobs that were lost in 2020 were more concentrated in industries with low unionization rates, such as leisure and hospitality, which raised the overall unionization rate. In 2021 these types of less-unionized jobs came back and offset the 2020 increase unionization rates. As the economy continues to recover and the pandemic composition effect continues to unwind, that will put downward pressure on unionization rates in 2022.
  • Since 2019, union levels have dropped in both the private sector (down 507,000) and, to a lesser extent, in the public sector (down 74,000). In the private sector, the unionization rate in 2021 was 7.0%, down 0.1 percentage points from 2019. The public sector unionization rate was 37.6% in 2021, up 0.4 percentage points from 2019.
  • In 2021, men had a unionization rate of 11.9%, compared with 11.3% for women. The gender gap in unionization has narrowed somewhat during the pandemic, though both men and women saw declines in the number of unionized workers between 2019 and 2021—a loss of 429,000 for men and a loss of 152,000 for women.
  • Of all major racial and ethnic groups, Black workers continued to have the highest unionization rates in 2021, at 12.9%. This compares with 11.6% for white workers, 10.3% for Latinx workers, and 9.0% for Asian American/Pacific Islander (AAPI) workers.
  • The substantial level of union activity in 2021 (including organizing drives and strikes), along with polling data showing the large share of workers who would like a union at their workplace, demonstrate that workers want and value unions. The fact that unionization nevertheless dropped in 2021 is a glaring testament to how broken U.S. labor law really is and how urgent it is that Congress pass the Protecting the Right to Organize (PRO) Act.

Union membership vs. union representation

If a workplace is unionized, all workers in the bargaining unit get the benefits of being represented by the union, even if they are not union members. Thus the share of workers represented by a union is somewhat higher than the share of workers who are members of a union. In 2021, the share of workers represented by a union was 11.6%, while the share of workers who were union members was 10.3%. Because all workers in a bargaining unit get the benefit of being represented by the union, union representation is the more relevant statistic when considering the impact of unionization on labor market outcomes. Therefore, we focus on union representation, rather than union membership, in our analyses. In this report, the terms “unionization rate” and “union coverage rate” are shorthand for the union representation rate. Because the government data on unionization exclude self-employed workers, the term workforce in this report refers to wage and salary workers.

Workers essentially have two sources of potential power vis-à-vis their employers: a union or the implicit threat that they can quit and take another job. During the last year, employers have been forced to compete for workers in a way that has not happened since the end of the 1990s. Workers gained leverage because the American Rescue Plan Act has generated a strong recovery from the COVID-19 downturn with substantial demand for workers at the same time that millions of workers are out of the labor force due to health and safety concerns or pandemic-related care responsibilities. As a result of this increased leverage, workers have seen strong wage growth and have been able to quit jobs in record numbers and take jobs that are better for them. When the pandemic is in the rearview mirror, however, these unusual labor market dynamics are likely to disappear. To sustain the increased worker power of the last year, it is crucial that workers are able to join unions. But as the 2021 unionization numbers underscore, only an overhaul of current labor law will make it possible for most workers who want to join a union to be able to do so. The Biden administration and Congress must institute policies—such as the Protecting the Right to Organize (PRO) Act—that promote the right to union representation and collective bargaining as we rebuild our economy.

To understand what happened to unionization in 2021, it is crucial to recall what happened in 2020 (BLS 2021c). In 2020, the number of union workers declined substantially as the pandemic caused massive job loss for both union and nonunion workers. However, unionization rates—the share of the workforce that is unionized—increased substantially because union workers lost fewer jobs during the first year of the pandemic than nonunion workers did. The lower job loss among the unionized workforce was due in no small part to a “pandemic composition” effect—the fact that the industries that got hit hardest by the pandemic (such as leisure and hospitality) are less likely to be unionized than industries that were more sheltered from the pandemic, and this change in the composition of the workforce raised unionization rates mechanically. Put another way, jobs in less unionized industries were lost at a higher rate, so unionization rates went up.

In 2021, that dynamic happened in reverse as jobs were added in the recovery. The “trampoline” effect—the fact that the jobs that come back in a recovery tend to look pretty much like the jobs that were lost—means that the jobs that came back in 2021 were concentrated in industries (such as leisure and hospitality) that have low unionization rates. This contributed to the substantial decline in the unionization rate in 2021, undoing the 2020 increase (BLS 2021c, 2022).

In particular, the share of workers who were represented by a union fell by 0.5 percentage points between 2020 and 2021, from 12.1% to 11.6%. But between 2019 and 2021—the full pandemic period so far—unionization rates were unchanged, at 11.6%. As explained above, unionization rates rose sharply in 2020, from 11.6% to 12.1%, in large part because of a pandemic composition effect, which began to unwind in 2021 as jobs came back, and unionization rates reverted to where they were in 2019. However, as the economy continues to recover and the pandemic composition effect continues to unwind, that will put downward pressure on unionization rates in 2022.

The number of workers in unions dropped in 2021 by 137,000, on top of a drop of 444,000 in 2020, for a total decline of 581,000 between 2019 and 2021. The fact that the unionization rate held steady between 2019 and 2021 even though the number of workers in unions dropped substantially is explained by the fact that the number of union workers and the number of nonunion workers declined at similar rates over this two-year period (-3.5% for union workers and -3.8% for nonunion workers).

The overall unionization numbers mask key differences between the public sector and the private sector. In the private sector, the unionization rate in 2021 was 7.0%. That is down 0.1 percentage points from 2019 (it rose 0.1 percentage points in 2020 and dropped 0.2 percentage points in 2021). The number of private-sector workers who were represented by a union dropped by 507,000 between 2019 and 2021 (down 544,000 in 2020 and holding roughly steady with an addition of 37,000 workers in 2021). The largest total declines in the number of unionized private-sector workers over this two-year period were in manufacturing, with a loss of 220,000 (134,000 in 2020 and 86,000 in 2021), and in leisure and hospitality, with a loss of 153,000 (a decline of 177,000 in 2020 and an increase of 24,000 in 2021).

In the public sector, the unionization rate in 2021, at 37.6%, was more than five times that of the private sector. The public-sector unionization rate in 2021 was up 0.4 percentage points from 2019—rising 1.2 percentage points in 2020 and dropping 0.8 percentage points in 2021. Jobs are not yet coming back in the public sector (virtually all the job gains in 2021 were in the private sector; public sector employment was virtually flat in 2021), so any pandemic composition effects occurring within the public sector are likely still in play. The number of unionized public-sector workers dropped 74,000 between 2019 and 2021 (it rose 100,000 in 2020 and dropped 174,000 in 2021). Two-thirds of the drop in the number of unionized public-sector workers between 2019 and 2021 was at the federal level (50,000), and one-third was at the state and local level (23,000).

Of all major racial and ethnic groups, Black workers continued to have the highest unionization rates in 2021, at 12.9%. This compares with 11.6% for white workers, 10.3% for Latinx workers, and 9.0% for Asian American/Pacific Islander (AAPI) workers. As explained below, unions have historically helped, and continue to help, close wage gaps for Black and Latinx workers.

The gender gap in unionization has narrowed somewhat during the pandemic, with the unionization rate for men dropping by 0.2 percentage points (from 12.1% to 11.9%) and the unionization rate for women increasing by 0.3 percentage points (from 11.0% to 11.3%) between 2019 and 2021. This reflects that women are more concentrated in the public sector, which, as discussed above, has seen an increase in its unionization rate since 2019, whereas men are more concentrated in industries that have seen a meaningful decline in union rates, such as manufacturing. However, both men and women saw declines in the number of unionized workers between 2019 and 2021—a loss of 429,000 for men and 152,000 for women.

The states with the largest shares of workers represented by unions in 2021 are New York (24.1%), Hawaii (24.1%), Washington (20.0%), Oregon (18.8%), and New Jersey (17.9%), whereas the states with the smallest shares of workers represented by unions are South Carolina (2.0%), North Carolina (3.4%), Arkansas (4.4%), Texas (4.7%), and South Dakota (5.0%). The largest increases in the number of workers represented by unions between 2019 and 2021 were in Minnesota, Oregon, Virginia, Georgia, and California, whereas the biggest losses were in Florida, Texas, Colorado, Missouri, and Alabama.

A large and growing majority of workers want union representation

The share of workers who do not but would like to have a union at their workplace is far higher than the share who had union representation in 2021 (11.6%). While more recent data are unavailable, an analysis of 2017 survey data showed almost half of nonunion workers polled (48%) said they would vote to create a union in their workplace tomorrow if they could. That figure is up substantially from about one-third (32–33%) of nonunion, nonmanagerial workers asked similar questions in 1977 and 1995 (Kochan et al. 2018; EPI 2021).

Note that the share of workers expressing a desire for unionization has increased as the share of workers represented by a union has declined. Today’s 11.6% unionization rate is well under half of what it was roughly 40 years ago (Mishel, Rhinehart, and Windham 2020). Despite the decline in union representation and the growing gap between the demand for and the availability of union representation, workers continued to exercise their right to form unions and bargain collectively in 2021. Union activity last year included organizing drives with nurses (Jamieson 2021), journalists (Fu 2021), graduate students (Meyerson 2021), and even Starbucks workers (Molla 2021), as well as successful strikes by taxi drivers in New York (Rosenthal 2021), health care workers in Buffalo (Hetherly 2021), and factory workers at John Deere (Jett 2021). Even the threat to strike, most notably by the members International Alliance of Theatrical Stage Employees (IATSE) union and University of California faculty in the fall of 2021, demonstrated the critical leverage that collective action provides to workers when negotiating better pay and working conditions (Steier 2021; Maddaus 2021; City News Service 2021).

Why do workers want unions?

When workers are able to come together, form a union, and collectively bargain, their wages, benefits, and working conditions improve.

Unions provide workers with higher wages. For example, a worker covered by a union contract earns 10.2% more in wages on average than a peer with similar education, occupation, and experience in a nonunionized workplace in the same sector (Banerjee et al. 2021).

Further, unions help to reduce gender and racial/ethnic wage gaps in part by increasing wages for women and for Black and Hispanic workers. Hourly wages for women represented by a union are 4.7% higher on average than for nonunionized women with comparable characteristics. Black workers represented by a union are paid 13.1% more than their nonunionized Black peers, and Hispanic workers represented by a union are paid 18.8% more than their nonunionized Hispanic peers (Banerjee et al. 2021). Research by Farber et al. (2021) confirms that unions have historically helped, and continue to help, close wage gaps for Black and Hispanic workers.

Unions also provide workers with better benefits. For example, union workers are far more likely to be covered by employer-provided health insurance: More than nine in 10 workers covered by a union contract (95%) have access to employer-sponsored health benefits, compared with just 69% of nonunion workers (BLS 2021a). Further, union employers contribute more to their employee’s health care benefits. Union workers also have greater access to paid sick days: More than nine in 10 workers—92%—covered by a union contract have access to paid sick days, compared with 77% of nonunion workers (BLS 2021b).

Unions also improve the health and safety of workplaces by providing health insurance and paid sick time, requiring safety equipment, and empowering workers to report unsafe conditions without fear of retaliation (Zoorob 2018; Amick et al. 2015). So-called right-to-work laws—which weaken unions by allowing workers to receive union benefits without paying their share of union representation costs—has been associated with a roughly 14% increase in the rate of occupational fatalities (Zoorob 2018).

The benefits of unionization go beyond the workplace. When local economies have greater shares of union workers, nonunion workers benefit, because unions effectively set broader standards—including higher wages—which nonunion employers must meet to attract and retain the workers they need (Rosenfeld, Denice, and Laird 2016; Mishel 2021). Further, high unionization rates are consistently associated with a much broader set of positive spillover effects across multiple dimensions. These positive outcomes include higher state and local minimum wages, better health benefits, easier access to unemployment insurance, access to paid sick leave, access to paid family and medical leave, and unrestricted voting opportunities (Banerjee et al. 2021).

Obstacles to unionization

A key contributor to the decline of unions is fierce corporate opposition to union organizing. It is now standard, when workers seek to organize, for employers to hire union avoidance consultants to coordinate intense anti-union campaigns. A recent EPI analysis concluded that private-sector employers spend nearly $340 million per year hiring union avoidance advisers to help them prevent employees from organizing (McNicholas et al. 2019). And though the National Labor Relations Act makes it illegal for private-sector employers to intimidate, coerce, or fire workers in retaliation for participating in union-organizing campaigns, the penalties are grossly insufficient to provide a meaningful disincentive for such behavior (Oliver 2021). The persistence of illegal retaliation is evident in a review of federal records: Employers are charged with violating federal law in 41.5% of all union election campaigns and one out of five union election campaigns involve a charge that a worker was illegally fired for union activity (McNicholas et al. 2019). And these data do not include the veiled threats and other legal ways that employers can thwart unionizing efforts, thanks to weak labor laws (Lafer and Loustaunau 2020).

What can policymakers do to protect workers’ rights?

Despite the attacks on union organizing, policymakers have neglected to update labor law to ensure that workers have a meaningful right union representation in their workplace—and the consequences are clear in the data. Union membership dropped in 2021 despite a substantial amount of union activity, and that drop is part of a decades long decline in unionization—a decline that is occurring not because workers don’t want unions, but because our current system of labor law is broken.

As we emerge from the pandemic, we must adopt policies that make it easier for workers to form a union. The Protecting the Right to Organize (PRO) Act, which passed the House last year with bipartisan support, provides a comprehensive set of reforms that would strengthen private-sector workers’ right to form a union and engage in collective bargaining. The Public Service Freedom to Negotiate Act, introduced last fall, guarantees public-sector workers the right to form a union and engage in collective bargaining. There is also room for improvement at the state level. Currently, more than half of U.S. states lack comprehensive collective bargaining laws for state and local public-sector workers, and millions of agricultural and domestic workers are excluded from collective bargaining laws unless states pass legislation to cover them (McNicholas et al. 2020). These policy changes at the federal and state level are not only crucial to restoring a fair balance of power between workers and employers, but also essential to an equitable recovery from the coronavirus pandemic.

The dynamic we’ve seen over the last year—of employers needing to compete for workers leading to wage increases and enabling workers to quit their jobs and find better ones—is the result of the extraordinary labor market dynamics of the pandemic. These dynamics are unlikely to last once the pandemic is behind us. For lasting strong wage growth and decent working conditions, working people must be able to join unions. The 2021 union numbers are a wake-up call. If policymakers fail to act, the downward trends in unionization will likely continue and the post-pandemic economy will be marked by widespread inequality and a lack of worker power. The Biden administration and Congress must institute policies—such as the Protecting the Right to Organize (PRO) Act and other legislation to boost unionization—that promote the right to union representation and collective bargaining as we rebuild our economy.

Acknowledgments

We are grateful to Daniel Perez for research assistance to prepare this report.

Endnotes

See McNicholas, Shierholz, and Poydock 2021 for a discussion of this trend.

References

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Source: Popularresistance.org