Michael Barone has a column in a recent Wall Street Journal about Big Labor's problems.
Meanwhile, the capital markets have gone on strike against unions. Capital hasn't been attracted to companies in which unions are entrenched -- the Big Three auto companies, the old-line steel companies, the legacy airlines. No one wants to finance businesses that will be burdened with the inflexibility and the huge health-care and pension costs union contracts impose. New firms have arisen in these industries -- Japanese and other foreign auto manufacturers, minimill steel companies, startup airlines -- which don't have unions. The biggest employer in America used to be unionized General Motors. Now it is determinedly non-unionized Wal-Mart. It would be an exaggeration, but not a great one, to say that no employers except the Las Vegas casinos create new union jobs.
One could argue that the past successes of unions have been one of their greatest enemies today. They have raised the costs of doing business and have created incentives for competitors to come into the marketplace and offer good products to customers at lower prices and with more flexibility than the union shops.
So are workers left helpless? A clue to the answer to that question is to look at what has happened in the law schools. They still teach the kind of Labor Law I learned years ago, but they also teach Employment Law, which focuses on ERISA and the structure of pension plans, equal opportunity laws and sexual harassment codes, procedures for disciplining and terminating employees, and the like. Company lawyers advise their clients on how to treat their employees in a way that provides a "safe harbor" against lawsuits; plaintiffs' lawyers figure out how to sue companies for violating laws mostly passed long after union membership peaked in 1954.
When faced with the possibility that its workforce may want unionism, many businesses, containing that good old enterpreneurial spirit, found that it was much cheaper to offer the services to their employees that the unions would fight for. A similar thing happened with regards to handling grievances in the workplace. So businesses, essentially, offered a substitute product at lower cost to their employees in part to fight off union attempts.
Unions achieved their greatest growth in the 1930s, when employees with jobs had little leverage because there were masses of unemployed workers who wanted their jobs, and during World War II, when government encouraged unions on war contractors. Neither condition exists today. Unemployment is low, and people do not expect to work for one employer during their lifetime anyway. Millions of jobs vanish every year and millions -- almost always more -- are created. In the 1990s wage growth was vigorous even as union membership declined and, though wages rose little when the economy was hit by the tech bust and September 11, they are now increasing robustly.
Simply put, the demand for union jobs, as currently offered, isn't what it has been.