Network News

X My Profile
View More Activity
2.7%  Q1 GDP    4.57%  avg. 30-year mortgage     9.5%  Unemployment

Are unions still the answer to sustaining the middle class?

For decades, American labor unions had the power to set fixed prices for labor, dictating wages to employers via the threat of strikes. In the process, unions essentially created the middle class.

Now, President Obama tells us that the American middle class is in trouble, and he and Vice President Biden have come up with a set of proposals designed to "reverse the erosion of the middle-class economy."

But I'm not certain that can be done without simultaneously increasing union membership, which was a key factor in driving up middle-class wages during the 20th century.

The question is: Do we want to increase membership in unions that, in some respects, created a false middle class for decades, setting prices for labor that never would have been reached had they been left solely to market forces? Is that the way to middle-class prosperity?

Take a look at the numbers: In 2009, according to the Labor Department, 12.3 percent of the U.S. workforce was unionized. That number has declined from peak union membership, which came in 1945, when 35 percent of the non-agricultural U.S. workforce was unionized.

For all U.S. workers, labor union membership peaked at 35 percent nine years later, in 1954.

But here is the power of long tail of labor unions: Total membership in U.S. labor unions -- the number of bodies, not the percent of the workforce -- didn't peak until 1970, when some 17 million American workers were in labor unions.

At the beginning of the 20th century, union membership was stigmatized as a cover for bomb-throwing anarchists, Trotskyites, Wobblies and other Reds. Indeed, it was even dangerous to belong to unions. Ask anyone's grandpa you know who ever came up against a Pinkerton thug.

But by the late '30s, union membership had gone mainstream and it begun its long, powerful run as the game-shaper for wages in the U.S., especially for Americans on the verge of slipping into the underclass, thanks to their lack of education and labor skills:

"The wage premium for union workers is generally larger for less skilled than for more skilled workers, greater for blue-collar than white-collar workers, larger for younger than older workers, and larger for less educated workers (high school graduates or high school dropouts) than college graduates," said a 2004 study by Cornell University.

Or, here is another way the White House can prop up the middle class: Give them all government jobs, which kills two birds with one stone. Earlier this month, the Labor Department reported that, for the first time in U.S. history, the majority of union workers are now employed by the government, not the private sector.

To be sure, the decline in private-sector union jobs, at least last year, had to do with workers in the heavily unionized construction and manufacturing sectors losing their jobs. But the long-term trend is plain to see: a massive decline in union jobs in the private sector. The number of private-sector employees in unions today is less than half what it was in 1970.

The link between wages and union membership could hardly be clearer: In 2009, full-time wage and salary workers who belonged to unions made $908 per week, while non-union members made $710 per week, the Labor Department said.

The question before this White House, Congress and private employers is: Can a new, vibrant, growing U.S. middle class be created without the coercion of labor unions?

-- Follow me on Twitter at @theticker

By Frank Ahrens  |  January 25, 2010; 2:28 PM ET
Categories:  The Ticker  | Tags: Bureau of Labor Statistics, labor unions, unemployment, wages  
Save & Share:  Send E-mail   Facebook   Twitter   Digg   Yahoo Buzz   StumbleUpon   Technorati   Google Buzz   Previous: December existing home sales crater
Next: Cato: Federal Government creates 2,000th subsidy


Here we go again, pitting "power[ful]" unions against poor corporate entities. Unions help offset the massive power imbalance between business owners/executives and the workers who make them wealthy. Unions do not fix prices for labor, but merely guarantee employees a seat at the table to discuss what constitutes a fair wage. An employer may turn down any wage increase proposed by a union. Of course, if the wages offered are not reasonable, people will talk with their feet and strike. This exemplifies a truer market system than exists in the absence of unions, in which individual employees are essentially powerless. And unions are certainly no more "coercive" than large corporations in small localities who can pay substandard wages to those desperate for employment.

And by the way, find an editor.

Posted by: saltydog83 | January 25, 2010 3:26 PM | Report abuse

Obama will boost the new middle class with his plan to legalize 30 million undocumented workers.

They also will add to union membership and non-union jobs, being willing to do things it is said American labor is unwilling to do -- work in factories, restaurants, stores, local and state government.

Those who become unionized of course will get greater benefits; others will be able to work for small businesses that cannot afford high salaries and benefits. Theirs will be initially, low-cost entry into the American dream.

Posted by: llrllr | January 25, 2010 3:32 PM | Report abuse

Unions have nothing to do with the middle class even though the "middle class" is as bogus a phrase as the politicians throw around.

Awarding artificially high wages to unions does not constitute a "middle class". It constitutes directing American buyers to foreign goods. Unfortunately the cancer of unions is invading monopolies (governments).

Posted by: hz9604 | January 25, 2010 3:38 PM | Report abuse

What a ridiculous post. Labor unions use "coercion" to "inflate" wages? So if workers have a voice on the job that's coercion? And corporations don't engage in coercion when they bust unions and terrorize their employees so they're too scared to join a union?

Inherent in this incoherent rant is the presumption that business has some divine right to the labor of its workers. The right to organize and the right to strike are inherent human rights.

The reason unions are in decline is not because they overpriced labor. It is because companies engage in massive, illegal union busting, and the penalties are just a slap on the wrist. An entire industry exists to consult companies on "union avoidance." There is absolutely zero incentive for companies to comply with the law.

That's the real coercion. Get a clue.

Posted by: bortiz | January 25, 2010 3:38 PM | Report abuse

Really old, stale anti-union ideology, from someone who evidently doesn't believe it is a legitimate economic question whether there is or is not an "American middle-class."

With our continuing series of "jobless recoveries," across Democratic and Republican Administrations and Congresses, it's pretty clear most of those actually running our economy or in a position to redirect it don't believe so either.

Posted by: washpost29 | January 25, 2010 3:47 PM | Report abuse

Corporations use lawyers. The only thugs I ever met were union organizers - and there was no doubt that they were of the, "how would you like your leg broken" variety.

And, having been part of a union, I can tell you the union member has no say about what the union does. You just pay your dues or get a visit from your shop steward.

In my opinion, unions are in business to preserve and grow the union. They don't give a damn about the workers - any more than any other parasite cares about its host. Companies are the same way, but they have to sell something, so there is something of value produced. Unions just suck the blood of their members.

So I wouldn't pay too much attention to the union boys and girls. Let them pass away like so many other ideas that have lived beyond their usefulness.

Posted by: hill_marty | January 25, 2010 3:58 PM | Report abuse

"The question is: Do we want to increase membership in unions that, in some respects, created a false middle class for decades, setting prices for labor that never would have been reached had they been left solely to market forces? Is that the way to middle-class prosperity?"

Great question Mr. Ahrens. The answers are "NO" and "NO".

What Mr. Ahrens does not say in the statistics is how many jobs are prevented from being created by artificially high wages (aka, welfare)?

How many industries have been killed by unions from General Motors to Republic Door and Window?

But snything is possible with the combination of a corrupt, dishonest White House and worthless Federal Reserve Notes that are being created and have been created for the last 20-30 years. The CPI and COLA are as bogus as this "middle class" nonsense that gets kicked around.

Posted by: hz9604 | January 25, 2010 4:02 PM | Report abuse

Corporations and their political allies systematically killed the labor movement in this country and hence a chance for millions at achieving the American Dream. Of course, with government acquiescence we let manufacturing – the heart and soul of the middle class union movement – relocate to cheap, third-world nations. Our politicians have embraced the financial sector and feed unashamedly from that trough. The rich get richer and the middle class will soon only be a few lines in a history book. We have sown the seeds of our own destruction. Parallels to the rise and fall of the Roman Empire. Perhaps the labor movement can organize Wal-Mart, the hospitality industry and other low-wage sectors…it’s the future of America now.

Posted by: sero1 | January 25, 2010 4:06 PM | Report abuse

I would venture to guess that the author of this missive has never been a union member. He investigated the history of the creation of unions but he failed to say how collective bargaining (the Wagner Act) saved the lives and dramatically improved the living standards and working conditions of millions of workers. Company stores could no longer avariciously take the wages from the workers. Workplace safety regulations were put in place. The 5-day, 8-hour/day workweek, medical/dental/retirement benefits were the result of hard fought efforts of unions on behalf of membership. Unions, especially in the construction trades, make sure their members are trained, qualified, and certified to do their jobs and in turn, the quality of work meets the highest of standards (unlike non-union work that is found in the residential housing...caveat emptor). Corporations/companies/employers when left to their own devices have historically shown what they do to their lower and non-management employees (although there are some exceptions). Unions provide a voice and foundation for bargaining for workers as well as raising the standards of products in the marketplace and are vital to the well-being of all workers.... I was a flight attendant and without the union, I would have been working 12 hour days with minimal rest, no perquisites or retirement and, in the event of flight cancellation would have had to find/pay my own way back to base (Continental, during their legacy of union busting, did this to friends of mine). FAR's provide protection to the pilots and only refer to flight attendants with respect to how many are to be provided for every 45 passengers.

Policies (especially tax related) have benefited the very rich and burdened the middle to lower middle class. My friend who makes six figures gets a refund as her 'office' is in her home and I make one-tenth what she does and end up either owing or breaking even (I cannot afford to buy a home, which is a huge deduction). By the way, I am no longer in a union, am in middle management, and have had two raises in six years due to budget constraints (I work in higher education at a state university).

Posted by: politico5 | January 25, 2010 4:33 PM | Report abuse

Marty_Hill, No say? So you were not allowed to vote on the officers? Not allowed to run for an office? Those are legal requirements. Did you alert the NLRB?

Posted by: jjmsan | January 25, 2010 4:40 PM | Report abuse

Unions pose a lot of problems other than just the benefit of potentially higher wages.

1) Unionized teachers generally oppose the use of parent volunteers in schools, wanting instead that the schools hire paid teacher's aides- who of course can then be unionized.
2) Construction unions insist that Federal construction contracts either use unionized workers, or pay the same wage as union workers, adding billions to the Federal budget. This also prevents use of many public-works projects, because having this unionization requirement adds to cost and insures Republican fillibusters in the Senate.
3) Unions are generally against linking job retraining programs to the receipt of unemployment insurance, because unions drop members who retrain into other jobs.
4) Unions make it very difficult to fire employees for cause, insisting instead that the employee be given a second chance to "correct" any deficiencies before being fired. Which of course they do while the spotlight is on them, and then when the spotlight is removed, they go right back to the same poor performance as before.
5) Manufacturing unions generally oppose overtime, prefering instead that employers hire more workers instead of requiring overtime be performed. But in public safety situations, where the use of overtime should be discouraged as much as possible, unions tend to favor overtime because it fattens up salaries even though this means that unionized employees like police officers are operating less effectively because they work so much overtime.
5) Public safety unions make it difficult to investigate/correct malfeasance, corruption and allegations of police brutality. Public safety unions make it more difficult to increase minority hiring and representation in the workforce (e.g. Prince Georges County police).

If these aren't enough reasons to take a good hard look at the drawbacks of unionization, I can think of many more.

Posted by: ripvanwinkleincollege | January 25, 2010 4:56 PM | Report abuse

There was a time when Unions were the saviors of the working class. Alas, that time has long since passed.

Entire industries, from steel to textiles have been exported because the cost of labor has skyrocketed. Is this the union's fault? Only half, they took what the managment would give.

I look at Michigan and the Detroit area. Factories sit empty, houses have been walked away from. Any company looking for cheap affordable production facilities SHOULD look no further. However, the strength and influence of the unions is stopping companies from looking in that direction.

Posted by: jimbo561 | January 25, 2010 4:59 PM | Report abuse

It would be helpful to this discussion to compare what life was like for workers before and after unions. Many of the benefits that unions fought for have been written into law but during Republican Administrations the laws are either watered down or else not enforced. Anyone who thinks killing off the unions is a good idea is either an business owner or stupid. White collar workers may not realize it but most of the pay and benefits they get are because the unions established the baseline for compensation programs. A question that everyone should ask themselves is what is more important- people or the market. The two are not mutually exclusive but without some protections for workers, managers will drive wages and benefits down to the subsistence level for all but the top management levels.

Posted by: cdierd1944 | January 25, 2010 5:00 PM | Report abuse

When I was a boy (1970s & 80s), my father owned his own heating and air conditioning business in union-friendly Western Pennsylvania. He was prohibited from bidding on certain public jobs simply because he ran a non-union shop. None of the unions seemed to care that he had a family of five to support. They were only interested in trying to maintain their weakening grasp in their community. It disgusts me to see our president bow to these less than reputable organizations simply because they funded a large part of his campaign. I celebrate the long, agonizing death of the labor union.

Posted by: chrispa | January 25, 2010 5:07 PM | Report abuse

If we want the trade imbalance to skyrocket, then this is a great idea. If we want to see another U.S. industry like auto manufacturing become uncompetitive, unresponsive, and unprofitable, eventually requiring government stewardship, then this is a great idea. Otherwise, I think we should continue to let unions go on the their current path.

Posted by: 1ofamillion | January 25, 2010 5:29 PM | Report abuse

We will only survive WITHOUT unions.

Posted by: Cornell1984 | January 25, 2010 6:06 PM | Report abuse

Even though his question is presented in a biased and less enlightened manner, the author does point to an important fact: that as unions have declined, so has the middle class. The proof is in the pudding. As the saying goes, numbers don't lie, but people do.

His statement that the American Way of Life (brought to you by unions) was artificial is absurd. It should be pointed out that the Great Recession and stock market crash occurred during a time when unionization was at lows not seen since the passage of the Wagner Act. Indeed, as wages have stagnated, Americans have continued to maintain their standard of living by sending mothers into the work force and borrowing beyond their means.

The borrowing that created the housing bubble and fueled consumer spending despite stagnant wages is what is truly artificial.

Posted by: bortiz | January 25, 2010 6:07 PM | Report abuse

The obvious starting point in thinking about unions is the automobile industry. It is certainly fair to say that management has been a big part of the problem of the American automobile industry. But is pretty unreasonable to deny that globally uncompetitive unionized labor has also been a substantial part of the problem. In any case, two major factors are driving the changes in our economy. One is the role of automation and the trend for labor value to move from a large number of modestly skilled workers to a smaller number who require much higher skills. The other factor is increasing global competition and the reality that American workers who are not globally competitive are consuming a unfair share of the world's resources. It is not particularly likely that unions are going to be able to do much to resist these trends.

Posted by: dnjake | January 25, 2010 6:35 PM | Report abuse

Unions may have been too effective in lobbying for legislation that enshrined many workers rights and benefits in law.

With every government mandate stipulating worker rights/benefits, there was less need among workers for the collective power of a union.

The long, sordid history of corruption hasn't helped the union cause, either.

And their extreme partisanship has allowed most Republicans to oppose them with impunity.

Posted by: DagnyT | January 25, 2010 7:02 PM | Report abuse

End corporate welfare. There is no middle class. The top 1% of the wealthy rule us all and I pray it ends soon.

Posted by: illinoisremembers | January 25, 2010 7:38 PM | Report abuse


Posted by: wheeljc | January 25, 2010 8:09 PM | Report abuse

Unions and our economy flourished after WWII because the factories of Europe and the East were in ruins, and the US held a virtual monopoly on manufacturing. Back then, we were an oil exporting nation. Those days are not coming back.

Posted by: WylieD | January 25, 2010 8:13 PM | Report abuse

One important thing you left out is that federal government employees cannot bargain for pay and cannot strike. Your question of whether unions affect the middle class is skewed without removing federal employees from your analysis.

Posted by: allamer1 | January 25, 2010 8:42 PM | Report abuse

This is all very simple stuff. Unions are a monopoly of labor. We all know that business monopolies typically offer poor service at ripoff pricing. It's the same with unions. Typically government tends to break up business monopolies (think Bell telephone) but bolsters unions. This is because government officials either love or fear unions. Just recently in New York the teachers union was able to sway the state from lifting quotas on the number of charter schools. This is despite the fact that almost everyone besides the union thinks it is a good thing (kids are doing better in charter schools here) and the fact that we will lose billions of dollars in federal aid if the quota is not lifted.

Posted by: jgault2 | January 25, 2010 8:43 PM | Report abuse

The premise of the question is flawed. Unions do not sustain the middle class. It is the other way around when the middle class has jobs. Unions are sustained by payroll deducted fees. Some unions are better than others. But they were formed to protect the workers from employer abuse.
This did not happen when corporate America decided to outsource American jobs overseas as it undercut any union's ability to bargain.

Posted by: Single_Payer | January 25, 2010 9:13 PM | Report abuse

"union membership, which was a key factor in driving up middle-class wages during the 20th century."

This is false. It's like something you learn in high school economics, but later have to unlearn when you understand much more.

The reality is that the unions have led to the downfall of American industry. They have raised the cost of labor until factories moved overseas where labor is cheaper.

You can raise wages by decree and unionization all you want. But you can't make companies hire people, you can't make them keep people, and you can't stop companies from moving manufacturing overseas where wages are significantly lower.

Is the WaPo for real?

Posted by: Ombudsman1 | January 25, 2010 9:16 PM | Report abuse

What is this mentality that asks the question "Do WE want to increase union membership?" Who is 'we'? The government? None of government's business. Society? Okay, let's make Beyonce work for scale. Maybe the writer of this coumn needs to write music instead.

Posted by: chatard | January 25, 2010 9:34 PM | Report abuse

Clueless bunch of fools. Illiterate idiot! Do some research before writing this sort of nonsense. 70% of union members are PUBLIC EMPLOYEES and the pension system for public employees is what had underwritten and *driven* the collapse of our economy. There is somewhere between 37 and 50 TRILLION dollars in public employee pension funds in the present financial system. Those funds are aggressively managed for maximum returns and that has meant, for the past 10 years, OUTSOURCING. Of the 41 million jobs outsourced, about half can be traced directly to public employee pension fund management. Moreover, as has been repeatedly reported in this newspaper and elsewhere, public employees make 200 to 300 percent MORE than their private sector counterparts. Politician's, who "negotiate" with those unions, quite literally bribe them for their votes using the public coffers. Couple this with other benefit that public employees commonly receive, like fully paid medical and dental benefits for themselves and every single dependent (i.e. the taxpayer even picks up the tab for the co-pay). No one EVER in the private sector has enjoyed these sorts of benefits and no company can afford them. But, the union answer is 'everyone should have these benefits and pay and we shall lead the way'. So, silly YOU! The question is not some airhead idea of unions saving the middle class, but whether or not we can SURVIVE the unfettered greed, the suicidal madness that public employee unions have inflicted on us. I think the answer is "not likely".

Posted by: mibrooks27 | January 25, 2010 9:54 PM | Report abuse

Can someone explain to me why we need public employee unions? Why do we need to pay people so much to protect them from themselves?

The monopolistic practices of unions have been another idiocy that brings us to the state were in. Please, save the middle class from the unions, the bankers who gamble with the debt we insure, and the idiots at the GSEs who are STILL buying 3.5% down mortgages from people with 590 credit scores.

Posted by: staticvars | January 25, 2010 11:28 PM | Report abuse

It's quite surprising to see such uniformity in the views of commenters. It's also impressive to see that almost all of the commenters have a good grasp on the arguments. In fact, I'd say that the average commenter's knowledge and reasoning are well above the author's.

In my view, the answer is that unions were sustainable prior to the explosion in international trade. Absent protectionist measures, which force consumers to pay supracompetitive prices, good created by unionized work forces cannot compete with goods created by non-unionized work forces. The U.S. automobile industry survived and flourished despite unionization in part because of tariffs on foreign automobiles and the relatively higher costs of importation that existed then compared to now.

If you don't effectively have a monopoly on the good being produced (e.g., primary education, government services) that prevents consumers from acquiring the good from a foreign source, unions simply don't work.

Posted by: 1ofamillion | January 25, 2010 11:35 PM | Report abuse

"Do we want to increase membership in unions that, in some respects, created a false middle class for decades, setting prices for labor that never would have been reached had they been left solely to market forces?"

If by "market forces" you mean "free trade with outright labor-repressing dictatorships" like China and Viet Nam, you're right, of course. Organized labor in the USA set prices for labor that can't compete with the wages workers get in places where uppity workers get taken out back and shot, or, on a good day, sent to "re-education camps" (you remember *The Gulag Archipelago*, right?).

Posted by: douglaslbarber | January 26, 2010 12:44 AM | Report abuse

Every time a company is unionized, someone in China smiles.

Posted by: neilwied | January 26, 2010 12:59 AM | Report abuse

The unspoken option here is tariffs on, or outright bans on imports from, dictatorships which forbid free speech and the right of workers to bargain collectively.

Somewhere around Bill Clinton in the history of the Democratic party, that option became just unthinkable, though I don't recall there ever having been any public debate on the matter.

Posted by: douglaslbarber | January 26, 2010 1:11 AM | Report abuse

The comments to this entry are closed.

RSS Feed
Subscribe to The Post

© 2010 The Washington Post Company