For years, union membership has been in decline. In 2012, the percentage of the American workforce that was unionized hit its lowest point since 1916. The union business model, primarily based on the needs of organizing industrial-era factory workers, may have worked well in the early and mid-20th century, but it has appeared to have failed to adapt to today’s skilled and mobile workforce and capital.
Michigan Radio’s political analyst, Jack Lessenberry, recently pronounced, “A lot of union leadership seems to have figured out what to do in 1936. If 1936 ever comes back, they’re ready. But it’s not coming back, and they have to come up with a new model.”
On the same radio program, Marick Masters, director of labor, professor of business and adjunct professor of political science at Wayne State University agreed:
Right now, [unions] follow the employer [to organize], but I think that’s an increasingly less reliable way to organize. I think [unions] need to follow the worker, and they need to invest in the worker, and make the worker a greater value proposition to employers so that when they move across organizations, they can make a claim for higher wages and higher benefits.
The decline in union membership shouts loud and clear that something needs to change. Unions need to be more responsive and put the individual worker at the center of the labor movement. They must become more like modern and voluntary professional associations, rather than carrying on as the industrial-era unions of old.
In order to thrive, unions must stop relying on the compulsion and monopolistic privileges labor laws granted them in the last century. The way for unions to grow and better serve workers is to compete for the voluntary support of new members. Unions of the 21st century need to provide added value to each worker, focus on their individual needs and deliver the necessary services and representation.
Unfortunately, instead of adapting to a new reality, some labor leaders are doubling down on the outdated methods of the past. Some unions are fostering hostile relationships with employers and becoming even more entrenched in the political arena. The needs of the workers these unions represent are often moved to the backburner.
This paper suggests a model for a renaissance of unionism, particularly with regards to private sector unions.[†] The modern union should cater to the skilled individual worker of the 21st century and not force them into an outdated one-size-fits-all model.
The suggestions in this paper do not require any change in current law. The recommendations rely on the principles of voluntary exchange. If unions provide services for which workers are willing to pay, unions should be able to charge workers for such service, but other workers should be able to refuse those same services too. This is how voluntary transactions work in a market, and this free exchange creates incentives for service providers (in this case, unions) to deliver value to customers (in this case, workers) at a competitive price.
By switching to this voluntary model, unions will admittedly lose some of the compulsory privileges granted to them under labor laws. Unions may instinctively want to cling to these privileges, but if they do it may result in their continued and inexorable decline. It is time for unions to take off the government-granted training wheels and take their chances in the market as voluntary service-providers and professional organizations. Perhaps only then will they be able to reverse their continued decline.
[*] The Mackinac Center conceptualized this study at the end of 2012, with an intended publication date of Labor Day 2013. The original goal was simple: make recommendations to improve labor organizations across the country and suggest options for becoming more like service and professional organizations. Halfway through 2013, however, it became apparent that the date had to be pushed back because some unions, mainly through the use of “worker centers,” were seemingly embracing some of the concepts this paper meant to endorse. A closer look at worker centers was needed, and so the publication of this paper was pushed back. Unfortunately, as this paper will discuss, the actions of worker centers and current push by some unions to change how they operate have mainly fallen short of the type of reform this paper proposes.
[†] Some language contained in this paper is similar to that already published in a previous Mackinac Center publication. F. Vincent Vernuccio, “The UFOs Have Landed and They Are Here to Represent You,” IMPACT (Mackinac Center for Public Policy, Nov. 2013), http://goo.gl/KCD6CA (accessed Sept. 15, 2014).