EVEN before the Supreme Court piled in, American unions were in a bad way. In their heyday in the mid-1950s, more than 30% of workers were members. Today just 11% are. With only a toehold in the private sector—where they cover a mere 7% of workers—unions have become increasingly reliant on faithful public-sector employees, 34% of whom are members, to stay financially afloat and politically relevant. The Supreme Court’s ruling in the case of Janus v AFSCME at the end of June will shrink the rump of union members even further. What will the consequences of even lower union membership be?
Unions engage in both collective bargaining for their workers and political lobbying, typically for progressive causes and Democratic candidates. Among white Americans, blue-collar workers have had their heads turned by President Donald Trump even as union bosses remain steadfast Democrats, so that many members disagree with their union’s politics. Opting out of union membership—and its mandatory dues—would allow them to benefit from negotiated pay rises and holidays without incurring any of the cost. For decades, the compromise had been to make non-members who would otherwise free-ride on collective-bargaining agreements pay “agency fees”—the share of union dues that go to non-political operations and overheads. In its Janus decision, conservative jurists on the Supreme Court cited the First Amendment, to hold that such schemes violated the constitution on free-speech grounds. All public-sector workers covered by a union will now have to opt in and consent before paying anything. It is not a question of whether unions will lose members as a result of this, but how many.
Wisconsin provides one case study. When that state passed a law in 2011 limiting collective bargaining and banning agency fees its teachers’ union lost more than half its members and two-thirds of its dues within three years. Teachers’ unions, among the most powerful in the country, could lose a third of their members as a result of the decision.
That may reflect some dissatisfaction, but it probably has more to do with the attractive offer of keeping a union-negotiated contract while avoiding deductions from already cramped pay-cheques. “It was a way to get $800 a year in dues, after they had not gotten a raise in five years,” says David Crim, an organiser for the Michigan Education Association. The union lost one-sixth of its membership after the state became “right-to-work”—banning collection of agency fees through state law rather than the courts—in 2012. “They’re virtually getting something for nothing,” says Kate Martin, a community college teacher and treasurer for her local union chapter in Cape Cod. “In the short term, you can get a bump in pay. In the long term, you’re going to lose benefits and suffer worse working conditions,” she adds.
Wasting no time, organisations like the Mackinac Centre, a conservative think-tank based in Michigan, have already put up websites encouraging workers to ditch their unions and retain their benefits, including a helpful service which will automatically write a pre-addressed resignation letter. The centre, which has long-standing ties to Betsy DeVos, the education secretary and a bogeyman on the left, has begun directly contacting teachers on their official e-mail accounts in 11 states.
To counter these efforts, union organisers will have to work hard to convince dues-paying members to stay. They are doing so by suggesting that conservatives are mounting an attack on all working people, who must stick together in the face of adversity. “It’s all about defunding us,” says Randi Weingarten, the president of the American Federation of Teachers (AFT), a labour union with 1.7m members. In the run-up to the Janus decision, unions asked their members to pledge “I’m sticking with my union” no matter what the court decided. Of the AFT’s 800,000 members in states affected by Janus, 530,000 had signed such a commitment before the decision was released, according to Ms Weingarten. Heavily Democratic states, like New York and California, are also passing laws to soften the blow, by insisting that unions are given contact information for new workers and strictly limiting the time period in which employees could revoke their membership.
The Piketty line
Economists have long debated the merit of unions. Classical economists tend to see them as localised monopolies on labour, which impose deadweight losses. A recent interpretation of their effect is more neutral: unions may be a countervailing force to monopsony, or the market power that firms have over wages and competition for workers. For example, until recently seven large American fast-food chains held “no-poach agreements” preventing their workers from switching franchises. They were dropped when state attorneys-general threatened to sue. Across the OECD club of mostly rich countries, unionisation rates in the private sector have steadily fallen. Public-sector workers have been insulated from this, in part because governments are not profit-maximising and in part because teaching cannot be outsourced to China.
One unintended consequence of the slow demise of American unions could be worsening income inequality. Labour-market researchers note that when unionisation was at its zenith, income inequality was at its nadir. A recent working paper by Henry Farber, Daniel Herbst, Ilyana Kuziemko and Suresh Naidu used a new data set spanning the last 80 years to show that this inverse correlation remains robust in the face of attempts to control for changes wrought by globalisation and technology. Their research suggests a simple mechanism for this association. Union members have earned up to 20% more than similarly qualified workers throughout this period. During the halcyon days of unionisation, unskilled workers were more likely to be members, so this earnings boost helped to hoist them into higher tax brackets and reduce inequality. As unions have shrunk, they have also shed low-skilled workers.
Smaller unions will spend less money on politicking, as they use their dwindling resources to hold on to members and stanch the flow of free-riders. That could make school reform, which teachers’ unions have often blocked, easier to pursue. During the 2016 election cycle, organised labour spent $217m—88% of it going to Democrats, according to the Centre for Responsive Politics, which keeps score. There will also be fewer members to go out and knock on doors. A clever study, published in January 2018 by James Feigenbaum, Alexander Hertel-Fernandez and Vanessa Williamson, measured the political consequences of declining unionisation by looking at counties bordering states that adopted right-to-work laws. The researchers found that such laws not only reduced union contributions and get-out-the-vote efforts, as expected, but they also depressed the vote for Democratic presidential candidates by 3.5 percentage points.
Electoral benefits help explain the zeal for diminishing union clout. Unions already fear that the expansive Janus opinion could invite future legal challenges to private-sector agency fees as well. When pushing right-to-work laws, Grover Norquist, an anti-tax activist, predicted that if a dozen more states adopted Wisconsin’s model, “the modern Democratic party will cease to be a competitive power in American politics”. That is wishful thinking: parties adapt; Democrats have already spent decades reckoning with declining union power. Yet unions have often had a moderating influence on the Democratic Party, pulling it back to a focus on the economic interests of workers when activists might prefer to concentrate on guns, abortion or the environment. The withering of unions will remove that counterbalance.