Status quo is a loser for labor unions

By Richard S. Davis

January’s good jobs report has been deservedly, albeit cautiously, celebrated. We’ve been fooled before. Remember “green shoots,” “shovel-ready jobs,” and “recovery summer.” But this feels different, maybe because as a nation we’re so weary, even our pessimism is exhausted.

For organized labor, though, the new year extends the long downward slope. A jobs recovery will not immediately swell union membership.

Fewer than 12 percent of American workers belonged to a labor union in 2011, according to the U.S. Bureau of Labor Statistics. In 1983, the first year for which BLS reports comparable data, one in five workers belonged to a union.

Two years ago, for the first time in history, the majority of union members worked for government. Today, the public sector union membership rate of 37 percent contrasts sharply with a 7 percent private sector rate.

Unions remain relatively strong in our state. With 19 percent of the workforce belonging to unions here, Washington ranked fourth in the nation, behind New York, Alaska and Hawaii. Again, the numbers skew heavily toward the public sector. About 57 percent of Washington’s government employees belong to unions, while fewer than 11 percent of private sector workers are union members.

Nationally, the reasons for declining private sector union membership are well understood. In the knowledge-based economy, the trade union model can seem as quaint as an old Philco radio. In traditional industries, competition limits unions’ ability to increase wages and benefits. Despite an intense campaign, workers for foreign car manufacturers in right-to-work Southeastern states have so far declined the United Auto Workers’ invitation to pay dues.

The flow of manufacturing jobs to those states influenced the Indiana Legislature’s decision to become the nation’s 23rd right-to-work state. Those states guarantee that workers are not compelled to join or financially support a union as a condition of employment. And, given the choice, many workers choose not to join the union. Expect Hoosier State union membership to decline.

Other Rust Belt states are watching. If Indiana attracts jobs, more dominoes are likely to fall. At a minimum, labor’s challenges are likely to continue.

In Washington, the agreement reached between the International Association of Machinists and Aerospace Workers (IAM) and the Boeing Co. indicates a welcome shift from the adversarial relationship that had many of us concerned. Facing global competition, the airplane manufacturer and its largest union had a powerful incentive to forge a constructive compromise.

It’s different in government. The market pressures that ultimately shape collective bargaining in business do not constrain public sector negotiations. Recognition of that difference impeded the growth of government unions until the 1960s. President Franklin D. Roosevelt famously said, “The process of collective bargaining … cannot be transplanted into public service.” George Meany, the first president of the AFL-CIO, agreed with him.

Yet, 50 years ago, President John F. Kennedy signed an executive order allowing federal employees to organize unions and engage in limited collective bargaining. (Most federal workers still do not bargain wages and benefits.) Many states and local governments followed suit and public employee union membership grew.

That growth sector has become labor’s latest political battleground. It began seven years ago, when Indiana Gov. Mitch Daniels signed an executive order ending collective bargaining with state employees. Many state capitals have since roiled with debates over public employee influence. In Olympia, union opposition to pension, compensation and education reforms frustrate fiscal progress and school improvements.

Results nationally have been mixed. Labor won a key showdown in Ohio last November, when voters overturned a state law restricting collective bargaining. Wisconsin, a key protest state, remains an unfinished story.

After Wisconsin lawmakers restricted public employee collective bargaining privileges and ended automatic payroll withholding of union dues, opponents turned to the ballot box. Recall elections last summer led to a two-seat Democratic pick-up, though Republicans maintained their Senate majority.

Later this year Wisconsin Republican Gov. Scott Walker will face his own recall. Polls show him leading likely challengers, as voters see positive results from policies enacted last year. A Walker victory will boost reform momentum.

With union membership in decline, labor leaders cannot win by defending the status quo. They — and we — can do better.

Richard S. Davis, president of the Washington Research Council, writes on public policy, economics and politics. His email address is rsdavis@simeonpartners.com.