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A COLUMN BY MICHAEL J. HICKS

Early successes of labor unions are partly to blame for their collapse today

Tuesday, September 3, 2013 - 12:01 am

Labor Day, once again, is time to mark the informal passage of summer and take stock of the American labor movement. This year I expect that pundits across the nation will either lament or gleefully point out that private sector union membership has plummeted back to the share it held during the Roosevelt presidency (Teddy, not Franklin). The decline is a startling thing. In only 50 years, union membership in the U.S. has dropped by 80 percent. No mainstream American institution of note has dissipated at this pace before. Today there are more Americans who receive disability payments than those who belong to private sector unions.

As of 2012, a tad bit more than half of union members were government workers and more than one-third of government workers belonged to a union. However, that stronghold of union participation faces even greater risk to their membership than do the private sector unions. The passage of right-to-work legislation in Indiana and Michigan has seen rapid declines in state and local government union membership. In Wisconsin, public sector union membership plummeted when Act 10, which ended government dues collection, was passed. Moreover, the coming pension crisis in state and local governments will likely collapse public union membership even further as members discover the many promises negotiated by their unions strain the mathematics of taxation.

In short, if you don't like the way American unions conduct business and wish to see them go away, this must be a happy time. If you care deeply about the labor movement, this is the 50th year of bad news.

There are many reasons for the labor unions' decline, but job losses are not among them. Nearly every year since 1970 has been bad for unions, no matter the state of the economy. Businesses have become better at opposing unions, but if Pinkerton's armed men couldn't slow unions a century ago, how can lawyers do so today?

Unions are disappearing in part because of their early successes. The vast improvements in the American workplace in the last century were begat by the labor movement. Having been successful at bringing about what most Americans wanted, many in the labor movement have turned their attention to issues most workers do not desire. One need only mention work rules in most government workplaces to provide costly example.

There is an important question to ask: What will a world without unions look like, more specifically what will replace them? I suspect we are going to see a much more sophisticated set of associations replace unions. After all, the American Medical Association does a better job of squelching workplace competition than any trade union. This model of workers seeking to craft work and compensation rules will mostly benefit the mid-skilled and higher skilled workers. There is little money to be made organizing low-skilled workers, who, after all, are poor and trying to become skilled workers. Whatever happens, it is clear the ghost of the American Labor movement was largely quiet this Labor Day.

Michael J. Hicks is the director of the Center for Business and Economic Research and an associate professor of economics in the Miller College of Business at Ball State University.