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The New Landscape of Labor

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The New Landscape of Labor

August 24, 2016
Economy, finance, and budgets

City Journal editor Brian Anderson and senior editor Steve Malanga discuss how public and private-sector unions have fared since the 2008 recession and the “right-to-work” states that are leading the recovery for organized labor in the United States.

Audio Transcript

Brian Anderson: The 2007 financial meltdown and the recession that followed dealt a heavy blow to labor unions in the United States.  By 2015, organized labor had shed more than 1.3 million members.  And today, years after a recovery began, unionized jobs only account for about 11% of the U.S. workforce.  What exactly is the future of labor in the United States?  Joining us today on 10 Blocks to discuss these developments in the American workforce is my colleague at City Journal, Steve Malanga.  Steve is a senior fellow at the Manhattan Institute and a City Journal senior editor.  His insightful piece in our Summer issue is entitled “The New Landscape of American Labor.”  Steve, thanks for joining us.

Steve Malanga: My pleasure.

Brian Anderson: Overall, labor union membership in the United States took this big hit after the Great Recession.  Some unions have come back a little bit, others have not.  Why is that and what exactly is going on?

Steve Malanga: Well, I think you have to break this issue down into public and private sector unions, and there has been a, I guess a narrative for a long time that essentially public sector is where the growth is in unionization.  But ironically, since the rebound from the recession began, public sector unions have made very, very little progress.  They are still really down at the low point in terms of losses of membership, whereas in the private sector there has been a bit of a rebound.  They haven’t rebounded all the way back to where they were before the recession and that’s somewhat worrying when you consider that the country does have five million more jobs.  We’ve managed to not only recover the jobs we lost generally, but moved past that.  But nonetheless the private sector now again has more members in unionization than the public sector.  This is interesting because about – in 2009, at least temporarily, the public sector emerged as the bigger component of the union movement and that kind of made news because this was the first time this has ever happened, but we’re back actually to having the private sector in the lead, because they’ve at least been able to fashion some kind of a rebound whereas things are really, really flat in the public sector union movement because states and cities are kind of financially exhausted and they have had to cut members and they’ve not been hiring back.

Brian Anderson: Unions in some of the same states we often think of as being friendliest to labor have struggled the most in terms of union membership.  Why is that, and in other words why have deep blue states like California and New Jersey seen declines in union membership while red states, Georgia and Texas come to mind, have seen increases in union membership?

Steve Malanga: Well part of it I think is the nature of the rebound in various places.  California, while they’ve had some very robust years of job growth, have in total – there are still 181,000 fewer union jobs in California than there were before the recession.  In New Jersey it’s about 70, almost 80,000.  In Pennsylvania it’s about 71,000.  One reason is because if you look at the rebound in places like New Jersey and California, it’s been very much, especially in California, a technology-driven, white collar rebound.  A rebound in industries that are not traditionally union-based.  By contrast, a lot of the job growth since the recession ended in America in blue collar jobs has actually taken place in right to work states, states that are traditionally thought to be not as friendly to unionization.  And those include places like Texas, Louisiana, Florida.  These have been actually some of the biggest, places where some of the biggest growth in private sector jobs have taken place, in part because these are also the places where, for instance, manufacturing jobs have actually rebounded.  They are coming back.  But they’re not coming back in places like New Jersey and in California, where the cost of operating is very expensive and they are not as competitive as some of these other places.

Brian Anderson: What do the labor unions themselves, labor union leaders, give for reasons for their membership losses?  Do they share this analysis and what are their plans to try to reverse direction?

Steve Malanga: Well, of course, you know the unions themselves blame it on – I guess you would say Republican, antiunion Republican policies.  They also blame it on, you know, industrialists like the Koch brothers who they say are funding an antiunion movement.  You know the irony, though, is that if you look at what’s occurring, and I’ll give you a perfect example, you sometimes wonder if the unions themselves aren’t their own worst enemies.  So one of the biggest movements within the union world in the last couple of years has been, for instance, this drive to raise minimum wages because you had a Congress that has been very slow to raise the minimum wage, there hasn’t been federal legislation, states have been raising the minimum wage.  But it’s really a tale, really, of two economies because some states have done very little and other states have raised their minimum wages robustly.  Well if you look at job growth or rather let’s say union decline, the states that have done the most to raise their minimum wages are the states that have actually experienced the greatest decline in union jobs.  Now that’s not shocking.  There’s a ton of research that shows that raising the minimum wage eliminates jobs, especially on the lower end of the scale, and if you think about the fact that some of the rebound in union jobs has been in areas of low to moderate wage industries like manufacturing, those jobs are going to places that are competitive.  They are not going to places that are instituting $15-dollar-an-hour minimum wages.  So if you look at some of these numbers you have to wonder whether the unions aren’t their own worst enemies, or at least the union leaders aren’t the enemies of their own members.

Brian Anderson: One potential effect of a $15 minimum wage in industries that generally pay less than that, fast food, for example, is an increasing reliance in those businesses in automation, and we’re already seeing this with some fast food restaurants.  What are unions thinking about the development of the economy in this direction with automation, with increasing technology displacing workers?  Do they have a plan for the future in this area?

Steve Malanga: Well I think if you look at this their response is how can government be employed and how can their allies in government be employed to prevent it.  If you look, for instance, at the rise of Uber and the gig economy, you know, it is very much unions and union-style organizations on the left that are trying to prevent or put new regulations in place to slow the effects of technology on industries, and the transformation by technologies of entire industries.  So I think their strategy is that government can help them, you know, impede this.  You know the problem is too many people across the ideological spectrum, particularly younger people of all ideologies, aren’t on board with this and they are the people who kind of support these businesses that use technology effectively, and so I think unions are swimming upstream in this effort.

Brian Anderson: You note in this essay that government unions aren’t particularly popular with the public right now.  How unpopular are they and how does that affect their rates of membership?

Steve Malanga: Well I think there are a couple of things.  First of all, all unions in general, in other words not just public, but public and private unions, they’ve seen a decrease in the number of Americans who say they are popular or who favor them, and that’s been really a 30-to-40-year decrease.  But perhaps more tellingly is that when you ask the average American whether they think that people should have the ability to join a union or not, the ability to choose, a majority of Americans say that’s the case.  That is what’s known, basically, as right to work and that is something that unions are fighting against vigorously.  But even as they fight against this idea of right to work, it’s an idea that’ spreading around the country.  There are four states since 2009 that have adopted right to work.  There are now a majority of the states that have right to work as their organizing principle for labor relations, and that means that you can opt of a union if you want to, even if your workplace is unionized.  And that’s really unprecedented, because it took 39 years for the previous last four states to adopt right to work, so we’re seeing a real acceleration of this.  And one of the things this means is that the average person thinks that something like the right to choose, which unions say is a conservative idea, is actually a mainstream idea.

Brian Anderson: Don’t forget to check out Steve Malanga’s latest article, “The New Landscape of American Labor.”  It’s in our Summer 2016 issue.  It’s also on our website, City-Journal.org.  We would also love to hear your comments about today’s episode of 10 Blocks on Twitter, @CityJournal with the hashtag #10Blocks.  Lastly, if you like our show and want to hear more, please leave ratings and reviews on iTunes.  Thanks for listening and thank you again, Steve, for joining us.

Photo: Jim West/The Image Works

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