A Closer Look at Why Unions in Manufacturing Have Been Declining Since The 1970s

As a society, we don’t hear very much about unions and manufacturing companies anymore; in fact, I realized that I don’t even know many people in unions. The reality is that union membership has been on the decline for decades. In the past couple of weeks, I’ve been watching the Hollywood screenwriters and actors strike, and it made me think about manufacturing unions, the impact AI will have across every single industry, and whether unions can help ensure fair employee compensation or if they’re a relic of the past.

Although smaller Hollywood disputes have come up over the years, this is the first major strike involving both actors and screenwriters since the 1980s. Interestingly, the strike revolves around?two main issues: higher pay to compensate for both inflation and miniscule residual pay earned from streaming and the potential use of generative artificial intelligence to replace human artistic skill.

The whole situation got me thinking about unionization within manufacturing and maintenance. As I started digging a little deeper, I discovered that unionization, particularly in our industry, has been steadily declining over the past decades. Here’s a closer look at the trend, how experts explain the decline, and what might be expected in the future.

Unions Peaked in 1970 and Have Steadily Declined Since Then

Overall union membership in the United States peaked in 1970 with about?17 million workers belonging to a union?and then dropped to nearly half that number by 2002. The decline continued over the next two decades with?union election petitions beginning to increase in 2022.

We see the same decreasing trend in the manufacturing sector, with union membership?reaching a record low of 7.7 percent in 2021.

Unionization was originally focused on improving safety within the workplace, an arguably good and noble purpose. Unfortunately, some unions began taking advantage of their positions and no longer necessarily represented the desires of their membership. In some cases, inefficient programs had to be implemented to satisfy union requests and end strikes. These strikes and negotiations were often costly and lasted an average of 46 days.

Today, I think it’s interesting to note that very few new companies have unions. In fact, an article in?The Hill?notes “companies that are unionized experience reductions in product quality and face a higher likelihood of going out of business.” Why is that? I think that unionization tends to level the playing field across a business, which means that they may successfully secure a higher minimum wage for the lowest performers but also cap the earning potential of the best and the brightest. Unfortunately, this means less incentive for employees to work hard, perform at their best, and advance on their own. The argument against unionization points to the extra fat and waste built into the system, protecting poor performers from getting fired due to union status.

On the other hand, a well-led, well-organized union creates a collective bargaining voice to advocate for worker rights, potentially improving working conditions, pay and benefits.

Potential Economic and Environmental Reasons for the Decline

I think unions had their heyday during the peak period of U.S. manufacturing. Back in the 1970s, a whopping?20 percent of employees worked in the manufacturing industry. Over the next decades, companies began exploring ways to reduce costs, turning to overseas manufacturers to handle more and more of the production of goods. I think this was one of the initial reasons for the decline; workers outside the factory floor had fewer reasons, particularly in the area of worker safety, to unionize.

As globalization grew and automation solutions came on line, many employees were steered from production line jobs into more service-related companies and positions. College professor?Zachery Schaller believes that up to 40 percent of the decline in union elections are related to industry sector shifts?and overall economic growth in our country. Essentially, our economy sort of “outgrew” labor unions, leading to an overall decline.

Author Nelson Lichentstein ponders other factors in his book,?State of the Union: A Century of American Labor. He notes that the model of collective work rights has been replaced by individual rights based on race, gender, or other personal attributes, leading to the detriment of both.

Historically, unionization tends to increase when unemployment rates are low. However, in recent years, this hasn’t resulted in a significant increase. Some experts believe that’s because?the younger generation knows very little about unionization?and doesn’t even know anyone who belongs to a union anymore.

Yet, one effect of unionization is the closing of the income gap, which has been growing in recent decades, leading to a?broad income disparity throughout the world. This may be a market effect resulting from fewer unions overall.

What does the future hold?

The current Hollywood strike made me wonder what the impact of technological advances in artificial intelligence and machine learning may be within the manufacturing industry when it comes to organized labor.

These and other advanced technologies are already having a significant impact on the industry, challenging both management and technicians to change the way they think about production, downtime, efficiency and asset management. While unionization tends to work to protect existing human jobs, the role of AI will be to create new positions requiring higher skill levels and different levels of expertise.

I’m curious to know what you think. Will we see a true resurgence of unions in this technological age? Would that be good for businesses and employees? Will unions protect wages and employee job security? Or would they stifle innovation and limit the potential of the best performers?