Decline in Union Density No Cause for Worry
Union organizers have been winning a few battles to organize workers in coffee shops and distribution warehouses, but they continue to lose the war over the relative importance of unions in the private-sector labor market.
This week the U.S. Bureau of Labor Statistics reported that the share of private sector workers who belong to unions, the so-called “union density,” fell to another post-war low of 6.0 percent in 2022. The number of workers in private-sector unions actually grew last year, but not enough to keep up with the overall growth in private-sector employment.
The decline in union membership isn’t driven primarily by “union-busting” employers or business-friendly Republicans, but by the changing nature of the U.S. economy. Over past decades, product and service markets have tended to become more competitive, both from more openness to global trade and investment and from more domestic dynamism spurred by deregulation in trucking, energy and other sectors. To stay competitive, domestic firms have tended to migrate to more business-friendly, “right to work” states, mostly in the Southeast.
Figure 1 below shows BLS data on private-sector union density going back to 1983. One striking pattern is that the decline has been remorseless, and actually dates back to the unionization peak in the early 1950s. The decline began long before the United States signed such trade agreements as the North American Free Trade Agreement (NAFTA) or the Uruguay Round that created the World Trade Organization, or the emergence of China as a global exporter. And the decline has persisted whether Republicans or Democrats controlled the executive branch and such agencies as the National Labor Relations Board.
The best news for union advocates is that the rate of decline in density has slowed. Under Republicans Reagan and Bush I (1983–1992), the private-sector union membership rate declined an average of 4.1 percent per year. Under Clinton (1993–2000) its annual decline averaged 3.0 percent, and under both Bush II (2001–2008) and Obama (2009–2016), the decline averaged 2.1 percent.
Ironically, during the Trump administration (2017–2020), the annual decline slowed to a low of 0.4 percent, while under the first two years of the Biden administration (2021–2022), the rate of decline has accelerated back to 2.4 percent. Labor leaders who stake their future success on electing pro-union politicians to high office will likely continue to be disappointed.
In the long run, private-sector unions are complicit in their own decline. As I explained in an article for the Winter 2010 issue of The Cato Journal, titled “Unions, Protectionism, and U.S. Competitiveness”:
The weight of evidence indicates that, for most firms in most sectors, unionization leaves companies less able to compete successfully. The core problem is that unions cause compensation to rise faster than productivity, eroding profits while at the same time reducing the ability of firms to remain price competitive. The result over time is that unionized firms have tended to lose market share to nonunionized firms, in domestic as well as international markets.
The latest decline in private-sector union density is not the result of anti-union public policy, but rather a more open and competitive private economy—and that is not something to worry about.