The Decline of Unions: An Unhappy
Day for Labor
Interview with former U.S.
Department of Labor economist Morgan O. Reynolds
by Bill Steigerwald
September 03, 2005
Organized labor is a wisp of what it once was -- economically
and politically. It now represents 12.5 percent of all wage and
salary workers, compared with 20.1 percent in 1983. And in the
private job market, only 8 percent of workers are union members
today, down from about twice that in 1983. In the public sector,
36 percent of government workers -- mainly teachers, firefighters
and police officers -- are unionized.
To mark Labor Day weekend,
I called Morgan O. Reynolds, an economist at the U.S. Department
of Labor in 2001-2002 and a retired Texas A&M University
economics professor. Reynolds, who wrote the "Labor Unions"
entry in the Fortune Encyclopedia of Economics, lives in Hot
Springs Village, Ark. He is an energetic skeptic of the official
events of the Sept. 11, 2001, terrorist attacks and calls himself
a "9/11 dissident."
Q: Is this going to be a particularly
sad Labor Day for the union movement in America?
A: It gets sadder every Labor Day, it seems. Organized labor
-- and I take some credit for this -- continues to wane in numerical
membership, strength and in most every other index. I notice
that we have got some major unions splitting off from the AFL-CIO,
allegedly in disgust with John Sweeney's efforts to organize
the unorganized. The reputation of organized labor continues
to erode and their day has passed. That seems to be a conventional
opinion in the workplace.
Q: What has caused the decline
of labor union power and importance?
A: The No. 1 thing, of course, is the transformation of the American
economy from an industrial employment and occupation mix to a
largely service economy and increasingly white collar -- a majority
of the work force is actually in professional, managerial and
related support occupations. But to get to the brass tacks here,
unions ultimately depend on either the threat of violence or
actual violence to succeed. Those methods have to organize most
of an industry or an occupation before you can get sustainable
wage gains, so-called monopoly wage gains. All this business
about persuasion and selling and using nonviolent methods ultimately
can't work in a dynamic and competitive economy, much less one
that is increasingly global. So you've got a lot of forces working
against organized labor, but you also have problems within organized
labor, where they haven't done a good job.
Q: What's your dictionary definition
of a labor union?
A: It's a cartel -- an organized cartel. It's a group of workers,
usually led by specialists, in organized labor who try to exclude
outsiders -- that means the scabs; the intruders. It's a special
kind of cartel. It's a labor cartel. And it has one advantage
that ordinary product market cartels don't, and that is unions
can use violence -- at least when it's countenanced by the authorities.
That's why the reaction of law enforcement is very important
-- and the courts.
Q: Do teachers and public service
unions today have too many government-granted privileges that
give them power they might not have otherwise?
A: Yeah. That's a matter of political opinion, but my opinion
is yes. The public sector provides pluses and minuses from an
organized labor point of view. The biggest plus is that government
is insulated from any kind of direct competition, so if you raise
wages and benefits within the government sector, the bill can
be passed on to pliant taxpayers. The disadvantage is that organized
labor is in a contest of wills and violence against the government,
and the government is ultimately going to win that one.
Q: What's the most socially
damaging myth about the benefits of unions?
A: The myth is that privileges rendered to organized labor will
benefit all of labor. That is just a myth. I tried to explain
this in the Fortune Encyclopedia of Economics. If you raise wages
and benefits and therefore the cost of labor in the unionized
sector, fewer will be employed -- that's the law of demand. And
those who are dis-employed or otherwise never employed there
seek employment in the nonunion sector, and that has depressed
their wages below what it otherwise would have been. Furthermore,
because of the misallocation of labor and capital, the whole
society is less efficient.
Q: Why did W.E.B. DuBois call
unions the greatest enemy of the working class?
A: Well, he was an advocate of improving the condition of black
people. And, of course, African-Americans suffered enormously
by union barriers to entry. Unions have always been especially
well-organized among white native workers and have been the enemy
of immigrants and women and blacks and other so-called interlopers.
Q: If you had to persuade the
staunchest union man or woman that unions are not economically
or morally virtuous, what would you say to them?
A: Well, they are not economically or morally virtuous in the
present and historical form. We could imagine nonviolent, non-threatening
organizations to aid labor. But certainly in the form of the
Anglo-American aggressive union, we need only look at history.
We don't need much economic theory to see how they can't compete
-- and we're in a competitive world. There is nothing wrong with
that. I am an advocate of competition. Most of us are in our
role as consumers. We want competition for our dollars and we
want high value for our dollars. We want choice and we want freedom,
and that's what we ought to want really in our role as producers
as well. Here's some wisdom from the great gymnastics coach Bella
Caroli: "No competition? No progress." And what we
need is progress. I think some union members are receptive to
that. Others know it, but they cling to their current privileges.
They fight change. But change has been overtaking organized labor
and will continue to overtake it. It's a matter of the dinosaur
Q: Will things only get worse
for organized labor?
A: Yes. There's no way out here that can work, given their approach
to the labor market. The only thing that can rally turn the tables,
at least temporarily, is government intervention on their behalf.
You could go to a more Canadian-type thing or a European thing,
which would impede the ability of management to resist union
organization. You can have various kinds of laws, but the ability
of unions to influence the political outcome, while still very
potent, doesn't seem sufficient to hasten such a change. It's
hard to see that politics would change in a pro-organized labor
Bill Steigerwald is
a columnist at the Pittsburgh Tribune- Review.
©Pittsburgh Tribune-Review, All Rights Reserved.
Distributed exclusively by Cagle Cartoons, Inc.
E-mail Bill at email@example.com
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