The American Union Decline: Why did it Happen?

Professor George Strauss

On the 21st April, Professor George Strauss from the University of California, (Berkeley) presented an interesting address on the decline of American unionism. George has been kind enough to provide Hummer with the following summary.

In 1955 over 30 per cent of the American workforce belonged to unions. Today this figure has dropped to 18 percent and is still declining. The U.S. may become the only western industrial nation not to have a strong labour movement.

Why have unions lost so much of their clout? The Reagan presidency provides a partial explanation, but not much. Union decline was well under way long before the “great communicator” took office.

Relative loss of membership. U.S. unions as a whole haven’t actually lost many members. Their main problem is that while the size of the labour force has grown rapidly, the number of union members has remained roughly constant – and for two main reasons: in the first place, the industries in which union membership was concentrated have grown less rapidly than the economy as a whole, secondly, unions have had little success in expanding into currently non-union areas.

Until recently American union strength was concentrated in manufacturing, construction, transportation, and public utilities, with its greatest strength being in manufacturing. Even today private sector industries which Australians call “metal products, machinery, and equipment, construction, transport and storage, and health” are as well unionised in the U.S. as they are in Australia.1 The big difference in union density between the two countries is in private finance and insurance” (heavily -unionised in Australia and almost completely non-union in the U.S.) and in some parts of the government sector.

Decline in heavily unionised sectors. Tragically for U.S. unions, since 1955 total employment has doubled, whilst blue-collar employment in manufacturing has barely changed. (White collar manufacturing employment has been growing but few white collar workers are unionised.) Heavily unionised manufacturing industries, such as steel and autos have expanded less rapidly than lightly unionised ones, such as electronics. Non-union companies, such as IBM, have grown rapidly, whilst man unionised firms, such as Chrysler, have lost employment. Unions have also lost membership outside of manufacturing. Union membership in the underground coal mines in the U.S. East has declined, partly due to rapid mechanization and partly due to the spread of non-union open-cut mines in the West. The construction industry, at one time the hard core of American union strength, is now less than 50 per cent union. Railroad employment has shrunk dramatically.

Deregulation. Union decline was accelerated by the deregulation of heavily unionised airline, trucking, bus and telecommunications industries.

Prior to 1978 prices in these industries were regulated by the government and usually set high enough to earn a “fair” profit. Further, to prevent excess competition, the entry of new firms was heavily restricted. When unions won wage increases, the government almost automatically permitted these to be passed on to the consumer. Understandably employers had little incentive to resist union demands, and wages climbed rapidly.

Beginning with Carter administration these industries were gradually deregulated. Firms were allowed to set their own prices (subject to broad limits) and new firms were allowed to enter. The American Telephone and Telegraph Company, employing close to a million people. was split into a number of parts and competing telephone companies began to proliferate,

Competition placed heavy pressures on firms accustomed to a protected market. Profits dropped rapidly especially in less efficient firms. As some approached bankruptcy, many union members were laid off. Meanwhile, the new firms entering these industries were largely non-union. Many paid substantially below the union rates.

Government and hospital sectors. In part the decline in manufacturing was offset by its growth in the government sector. Prior to 1960 government employees were largely non-union. Today they are better organized than their private sector U.S. counterparts – but not as well organised as the Australian public service, Non-profit hospitals were also organized, after a change in the law in the 1970s.

Though these developments prevented unions from actually losing membership by very much, the non-union sector grew much faster than the union sector and the percentage of those organized dropped inexorably, year by year.

Difficulty in organizing new groups by workers. The decline and even disappearance of unionised firms would have made little difference were unions able to organize new or growing non-union firms. But this proved difficult. As most readers are aware, the way a union obtains the right to represent a group of workers in the U.S. is very different than it is in. Australia. In Australia. the union obtains this right from its constitution. In the US the union must win a government-organized “election” in which workers are given the opportunity to decide both whether they want to be represented by a union and which union they want (assuming that more than one union enters the ballot). Unions were quite successful in winning such elections fifty years ago. Today the success rate is much lower. Not only has their win rate dropped, but they are contesting fewer elections (why enter an election if you are bound to lose?) and the average size of “bargaining units” in which they won has declined.

Unions seem to have lost the ability to attract the unorganized. But why?

  1. Management has gotten smarter. Firms threatened with unions typically offer workers most of the wages and other benefits they would get were they unionised. Some companies hire ombudsmen, who handle workers’ complaints and play somewhat the same role as union stewards. A few companies even allow workers to appeal their grievances all the way to independent outside arbitrators.
  2. Management is also fighting tougher. Even if companies can’t get rid of current unions they are showing growing confidence that they can keep them, from spreading into non-union areas. To do this, they often hire professional “union busting” consultants who run carefully organized campaigns to insure a majority “No” vote. These consultants are prepared to use a variety of techniques, some legal, some illegal.
    To be sure, American labour law makes it illegal for employers to discriminate against workers for union activity and, indeed “to .interfere, restrain, or coerce” workers in their rights to join unions. The number of employer violations found by the National Labor Relations Board (even under Reagan) has skyrocketed. But the penalty for violating the law is light.2 Workers who are fired illegally, just because they were union activists, may be reinstated to their jobs with back pay but usually only after a prolonged and often uncertain legal battle – and punitive damages are not allowed. Thus the union activist runs the substantial risk of losing her or his job, temporarily, if not for good.
  3. Thirty years ago employers had the unrestricted right to fire non-union workers for any reason they wanted – or none at all. Unionised workers, by contrast, can be fired only for “just cause”, with the burden of proof being on the employer; and with opportunity to appeal to an impartial arbitrator. Today a variety of new laws make it illegal to discriminate against workers on the grounds of age, race, religion, national origin, sex, physical handicap (and in some jurisdictions, sexual preference). Violations of these laws are often enforced through class action suit, with the winning lawyer collecting substantial fees. White collar workers often find it easier to redress their grievances through the law rather than through union activity. To over-simplify, blue collar workers may feel more comfortable in striking, white collar workers in litigating.
    Thus the woman’s movement – which makes considerable use of class-action litigation – is in some, ways a rival to union movement. Women in America have their own special agenda: flexitime, child care, opportunities for part-time work, freedom from sexual harassment and the like. Unions at first were resistant to this agenda. Now they are becoming more sympathetic. Increasingly it is recognized that for unions to regain their forward movement they must unionize the great masses of female clericals working in white-collar factories.
  4. Americans have always been suspicious of bigness – big government, big business, and big unions. Union leaders rank alongside politicians and used car dealers at the low end of the popularity poll3 As the ravages of the Great Depression receded into history public support for unions declined steadily, a movement fanned by an anti-union press.4

Hopes for renewed growth. For the moment there is little likelihood that American labour will resume its growth. Long run hope of revival depends on labour’s learning how to organize private-sector white-collar workers successfully (perhaps Australian unions can help them here), on revisions in the law to strengthen the penalties for anti-labour acts, and on labour’s making better use of present legal provisions protecting workers against various forms of discrimination.

U.S. unions may begin to place greater emphasis on litigation and less on collective bargaining and economic strength. This too would make U.S. unions more Australian. Such a change would be consistent with the recommendations of a special committee chaired by Tom Donahue, Secretary-Treasurer of the AFL-CIO , the U.S.’s closest equivalent to the ACTU.


  1. D.W. Rawson, Unions and Unionists in Australia Sydney, Allen & Unwin, 1986, p.33.
  2. But not as light as the penalties faced by Australian unions who violate arbitration awards.
  3. Somewhat remarkably during the 1984 election campaign, Ronald Reagan was able to brand Fritz Mondale as a tool of the “special interests”, especially labour.
  4. Recently public opinion polls have shown a slight reversal of this trend, perhaps because it is difficult to argue that U.S. unions today are threats to anybody.