6 reasons unions are under fire

Wisconsin has slashed public unions' collective bargaining rights, and other states are looking to follow suit. Are unions relevant -- or even necessary -- in 2011?

By MSN Money Partner Mar 14, 2011 2:16PM

Investopedia on MSN MoneyBy Angela Diadone for Investopedia

 

The concept of organized labor groups, or unions, began as far back as the late 1700s, when printers and other artisans Image: Construction workers (© image100/Corbis)such as cabinet makers and carpenters joined together in refusing to provide goods unless they were allowed to work fewer hours and were paid more for their time. In the early 19th century, recorded efforts were made by unions either through strike actions or negotiations to pursue better working conditions.

The emergence of labor unions rose steadily in the early 20th century -- some without much success -- but working groups joined together in citywide and statewide federations, gaining in numbers and eventually garnering the support from Congress needed to make changes.

 

Fast forward to the present. Union numbers in the private sector are steadily diminishing and public unions are facing major hurdles because of financial deficits and strong-arm politics. What are the factors causing the decrease in union numbers? Do unions still have an importance in the American workplace? Or will they disappear altogether?

 

Supply and demand

One should understand the history and the events that prompted the rise of unions before casting judgment on their importance. In the late 1800s, America was in the midst of an unprecedented industrialization when manufacturing of goods more than doubled in the 20 years between 1880 and 1900, as did the demand for products such as steel, coal and fabrics. Likewise, the ensuing years saw an influx of immigrants, many of whom filled the need for jobs. But hours were long and conditions were often unsafe and unsanitary as in the case of the deadly Triangle Shirtwaist fire in New York in 1911. This tragedy, in which 150 lives were lost, was one of the factors that paved the way for changes in safety regulations in unionized companies. Article continues after video.

Globalization
By the end of World War II, more than one-third of Americans employed belonged to a union. Business strategies changed, however, and that number dropped to around 20% in 1980 and to 11.9% in 2010. While union efforts remained steadfast, management was feeling increased pressure by foreign competition and became less willing to accede to higher wages and heftier benefits packages. After all, they didn't have to keep production in the United States and more and more jobs were lost to overseas outsourcing and manufacturing plants.

 

U.S. union membership

Year

Workforce in unions

1945**

35%

1983*

20.1%

1990*

16%

2000*

13.4%

2010*

11.9%

*Source: U.S. Department of Labor Statistics

**Estimate

 

Age of automation

As technology and its uses expanded, the need for actual manpower lessened in a wide sector of American business. Unions tried with limited success to keep employees in the workplace, but management found ways to utilize machination rather than man. This kind of cost-cutting measure eliminated tens of thousands of jobs.

 

Service industry
Traditionally, the service industry has held fewer union positions -- so as more and more jobs in fields such as hospitality, food service, etc. grew in demand, the need for unions did not.

 

Bad press
Corruption in industry, politics and the public and private sectors are nothing new. However, as Americans grew hungrier for more and more news, and that news became more readily accessible, it brought with it a more prevalent outcry against corruption in unions, which ultimately hurt the labor movement. Generations of young workers, unlike their fathers and grandfathers before them, grew skeptical of organized labor and chose against it, thus further sapping unions of their power. Besides, by the late 1990s, unemployment rate was at a mere 4%, the economy was thriving and life was good for most Americans, so unions were merely a passing thought.

Economic upheaval

How things can change! Thanks to serious troubles in the banking industry, globalization, a real estate slide, record unemployment and a decline in home-grown goods and services, Americans are in what economists call the greatest financial crisis since the Great Depression. Add to that the seemingly endless spending by government (from municipal to national), which has resulted in a multi-trillion dollar deficit, and a reluctance as a whole by the governing bodies to compromise on the needs of the working class, and what you have is a shift in the sentiment for unions. A 2007 Pew Research Center poll, in fact, showed that 31% of Americans had an unfavorable opinion about unions, with 58% in favor. And in February of 2010, a poll showed that only 41% had a favorable opinion and 42% had an unfavorable opinion. A remarkable sway in three or so years and a remarkable history of organized workers.

 

The bottom line

The future of unions in America is hazy, at best. While they have served a great purpose in insuring safer, more humane conditions for workers, as well as in helping workers feel less powerless against management, there has been a very succinct shift in the emphasis of American business needs and wants. But if history has taught us anything, the American working spirit will somehow prevail.

 

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