The Impact of the Decline of Unions in Labor Markets

The Impact of the Decline of Unions in Labor Markets
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The Impact of the Decline of Unions in Labor Markets
Labor unions play a key role in protecting the welfare of employees. When workers come together under a union, it becomes easy for them to share their grievances with their employer. Unions help in negotiating for better wages and better working conditions for their members. It is important to note that one of the goals for corporations is the reduction of costs. Unions seek to protect the welfare of their members, and this often leads to increase in costs for organizations. The decline that has characterized labor unions in the recent decades, therefore, is favorable for organizations. This is because the ability of workers to bargain for their welfare is reduced. Without unions, it becomes easy for organizations to outsource jobs to lower-cost countries and implement automation. Such practices affect employees to a great extent simply because their bargaining power is reduced. Unions play a significant role in protecting the interests of employees, and therefore, there is a need to empower them.
The middle-class members of the society are the ones who are hurt the most by the decline of labor unions. According to Collins (2015), the incomes of the middle-class members of the society reduce with the decline of unions. The number of unionized workforce members hit a 97-year low in 2013 according to Collins (2015), and this means that more members of the middle class were hurt. While the percentage of unionized workers stood at 35% in the 1950s, the figure reduced to only 6.6% in 2013 (Collins, 2015). A major cause for the decline of unions is the effort by corporations to get rid of them as a way of reducing costs. As noted by Collins (2015), corporations in America have been successful in doing that, and that is why there is a low percentage of unionized workers. There are other factors that have been attributed to the decline of unions such as modification of labor laws and long-term strikes. Without unions, the middle-class members of the society lose their bargaining power. Their incomes are hurt as a result. The role of favorable income in making the life of workers and the economy better cannot be underestimated. Members of the middle class depend on their income to sustain their lives and those of their loved ones. With an income that does not reflect aspects such as inflation, it becomes hard for the members of the middle class to sustain their lives as well as those of their family members. As mentioned earlier, corporations are out there to maximize profits and minimize costs. Therefore, it is impossible for them to listen to the problems of workers without unions. As pointed out by Collins (2015), it is impossible for corporations to become sympathetic to the problems of workers unless they are pressured. The pressure that is enough to coerce corporations to change their goal of reducing costs can only come from a collective bargaining. And this collective bargaining is fostered by unions that have been on the decline in recent decades. The result of such decline is the decreasing income for members of the middle-class society. In addition, as their incomes decrease, their purchasing power declines as well. This affects the economy negatively because the demand for goods and services is reduced with the decline in purchasing power of middle-class members. When unions are strong, the economy does better because of the increased capacity of workers to exercise their purchasing power. With weak unions, there is a slowdown in hiring and demand in the economy goes down (Collins, 2015). Therefore, it is deducible that the decline of unions has impacted not only the lives of middle-class members of the society but also the economy.
Another major impact of the decline of labor unions is the rise in inequality. As the membership and power of unions decline, inequality increases. In periods when labor unions were strong, prosperity was shared relatively equally. According to EPI (2012), when the National Labor Relations Act passed in 1935, unions were encouraged and protected. A wave of unionization spread in the country and the effect was shared prosperity. Specifically, as noted by EPI (2012), the share of national income that was taken by the rich was cut by a third. Therefore, during the period when unions were strong, there was equality in the society to some extent. The labor unions had immense power as they had the ability to raise working standards and wages for employees. This was applicable for both members and non-members. When unions were strong, there was a high productivity and median compensation. This was shared in the society as labor unions played a role in moderating the compensation of executives in corporations (EPI, 2012). This was up to the early 1970s before the collapse of the unions began. When the US passed anti-worker trade deals with China and Mexico and Reagan’s administration crushed the PATCO strike, the decline of unions began. This marked the beginning of the rise of inequality in the country. As the union membership decline, the share of income going to the richest members of the society began increasing. As noted by EPI (2012), income inequality has worsened to levels not experienced since the 1920s. This is majorly attributed to the decline of the unions. These assertions are supported by Collins (2015) who notes that the unionization decline is associated with a pronounced rise in wealth and income inequality. It is evident that the decline of labor unions has led to increased levels of inequality in the society.
A major impact of the decline of unions in the labor market is poor working conditions for employees (Rosenfeld, 2014). As mentioned above, unions play a tremendous role in ensuring the working conditions for members as well as non-members are favorable. It is thus expected that when the power of unions to bargain on behalf of the workers is reduced, it becomes hard to maintain conditions that...