Smaller unions, more jobs - study equates high growth with low rates of unionism

Nation's Business, Nov, 1984 by Leo Troy

ECONOMIC DEVELOPMENT is highest in the states where unionism is lowest, as indicated by a comparison of changes in employment--an important measure of economic development--and union statistics that my Rutgers University colleague Neil Sheflin and I recently compiled.

Our study shows that the big states with the largest gains in employment also had stable or declining percentages of union membership. The study compares the percentages of unionized non-farm employes in 1939, 1953 and 1982.

Because the percentage of government employes in unions was much higher in 1982 than in the earlier years, all government employes were excluded from the final year to emphasize the effect of union membership on economic development, which is not related to government employment growth.

The year 1953 is important for two reasons: (1) The shift in the economy from domination by the production of goods to a service-oriented marketplace occurred in the 1950s, and (2) 1953 was the year that organized labor enjoyed its biggest share of the U.S. labor force.

Our study tells some important things about the economy:

In states where employment grew more rapidly than the national average, unionism lagged or declined. In Florida and Texas, the percentage of union membership in 1982 was not only below 1953, it was below even 1939. In California the 1982 percentage was at about the same level as 1939, and North Carolina's was only slightly higher; both states had 1982 percentages below the peak rates of 1953.

Georgia was the only growth state with a gain but its current percentage is below the national percentages for both 1953 and 1982.

HIGHLY UNIONIZED, heavy industry states stand in sharp contrast to the rapid-growth states. Illinois, Michigan, Ohio and Pennsylvania lag well behind the sun belt states in employment growth and are below the national average, as well.

Union membership rates dropped in the heavy industry states between 1953 and 1982, but all were above the national average in 1982, as they were in 1939 and 1953.

Massachusetts, New Jersey and New York are included in the study to illustrate other labor market changes associated with economic development. Massachusetts has become an important center of employment in high technology, with the work force shifting from the declining textile and shoe industries.

Moreover, the new high tech industries are largely nonunion.

As a result, Massachusetts' 1982 union membership percentage dropped below its 1939 rate.

New Jersey retains a fairly balanced industrial mix, though it has lost manufacturing employment. Meanwhile, its union membership rate has returned to its 1939 level and is far below its 1953 level.

New York, with the second smallest employment gain of the states studied, was the only state to show a higher rate in 1982 than in 1939, although the 1982 rate was below the 1953 level.

The decline of unionism associated with economic development is not limited to the United States. The British union movement has also been slipping. A British expert in industrial relations, Prof. B.C. Roberts of the London School of Economics, said recently that "we are following the American unions and have been for some time." He added that "all over Europe, in fact, union influence has topped out, for similar reasons."

Does this mean that unions are an anachronism?

Hardly--unions remain strongly entrenched in the goods-producing sector of the labor market and among blue-collar workers. There is little reason to expect unions to lose their hold on these centers of power.

Unions will survive, but will be largely ignored by the trends in economic development.