Workers Are Not Buying What Unions Are Selling

Sep 04, 2015 - 12:30pm

Senior Editor, Digital Content

Even though the Obama administration has been stacking the deck in favor of unionization, don’t expect that to translate into increases in union membership.

This is because workers simply aren’t buying what unions are selling, said Randy Johnson, senior vice president for Labor, Immigration and Employee Benefits at the U.S. Chamber’s Labor Day briefing.

Currently union membership makes up 6.6% of the private sector and has been declining since the 1950s.

Low union participation may be due to high levels of job satisfaction.

Johnson cited a Gallup poll that found that almost 70% of workers said they were satisfied with the amount of money they earned, and over 80% of workers were satisfied with the amount of work that’s required of them (53% were completely satisfied).

According the Bureau of Labor Statistics, employers spent about $9.3 trillion on total compensation in 2014: $7.5 trillion on wages and salaries; and $1.8 trillion on benefits. Gallup also found that nearly 70% of workers are satisfied with what they're paid.

Over the last few years, the NLRB has tipped the balanced towards labor unions by allowing ambush elections that shorten the time employers have to educate workers about the consequences of joining a union and recently in the Browning-Ferris decision, established a new joint-employer standard that alters decades of established labor law.

“This isn’t about enforcing our laws,” Johnson said. He claimed that the administration’s efforts are about maintaining a labor model more-suited for last century by advancing the following view:

The traditional employer-employee relationship, where someone works for a company for 30 years… is the way to go. We don’t like this new, modern workplace where there’s independent contractors, where there’s outsourcing. And we as enforcers of labor laws are going to use our labor laws to make sure that workers and individuals do what they ought to do, which is join a union.

In contrast, the new, modern employer-employee relationship includes individuals who are more entrepreneurial and who want to set their own hours and how to make a living.

“People want to have a more direct relationship with their boss and not have a union interface,” Johnson said.

The Obama administration bases its dramatic policy changes on an alternative history that “union smashing by employers” has held back the middle class. Advancing union membership will boost middle class wages and reduce income inequality, it posits.

“As union membership has steadily fallen in recent decades, the share of income going to the top 10 percent has steadily climbed,” wrote Labor Department Secretary Tom Perez. He also claimed that union workers make about $200 more than non-union workers.

However, Secretary Perez didn’t mention that the source of that statistic, the Bureau of Labor Statistics—which is inside his Labor Department—stressed that “comparisons of earnings in this release are on a broad level and do not control for many factors [geographic, demographic, occupation] that can be important in explaining earnings differences.” Despite the narrative the administration is pushing, there’s no evidence that by joining a union a person would see a bigger paycheck.

Johnson said, “There’s a lot more to the story” of why unions have been on the decline. They're on the decline, because “there’s a fundamental problem with what the unions are selling, whether it’s because employers already fill a lot of needs for employees” or because of federal laws already in place.

Much of what labor unions used to bargain for--workplace safety regulations, anti-discrimination laws, and (now with Obamacare) health care benefits--are now federal policies. Combine that with organized labor’s history of corruption, and it’s hard convincing workers that paying union dues is worth it, said Johnson.

While the administration’s pro-union efforts aren’t likely to succeed they are already creating headaches for employers. Johnson noted that even though the final outcome of the Browning-Ferris joint-employer decision is years away, companies have come to him asking if they should already be restructuring their outsourcing and franchise relationships. The uncertainty over what future labor law will look like will make employers think twice about hiring more workers. That's the last thing our feeble economic recovery needs.

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About the Author

About the Author

Sean Hackbarth
Senior Editor, Digital Content

Sean writes about public policies affecting businesses including energy, health care, and regulations. When not battling those making it harder for free enterprise to succeed, he raves about all things Wisconsin (his home state) and religiously follows the Green Bay Packers.