Who killed the unions?

Who Killed the Unions?

BY VOTING to public employers from hiring permanent replacements for striking workers, the House has fallen for one of the labor movement's most enduring myths. Organized labor has been shrinking for decades as an economic force in this country. Only 16.4 per cent of the U.S. labor force is unionized today, versus 20.1 per cent in 1983 and 33.2 per cent at its postwar peak, in 1955. In 1974, which was not a vintage year for strikes, there were 424 of them; in 1988 there were forty.

For years labor leaders insisted that this trend was unique to the U.S. and that union membership was rising in Canada and Western Europe. Some economists agreed. The National Bureau of Economic Research's Richard Freeman put it this way: "The rapidly de-unionizing U.S. is the prima facie case of what aggressive management can do to unionism. In the 1970s and 1980s U.S. management turned against unions and collective bargaining to a degree not seen anywhere else in the world."

Interesting, but utter nonsense, according to Rutgers economist Leo Troy. In a study published last year Professor Troy finds Mr. Freeman and his "unique" school made serious errors in their analysis. First, they assumed that all Western nations' labor forces underwent identical, simultaneous transformations from heavily unionized manufacturing to service employment. Not only did the U.S. make the switch considerably earlier (more than half the U.S. labor force was employed in services by 1955; France did not reach that point until 1981), but government services, most of which are unionized, were far more important to service growth abroad than in the United States. Secondly, the alleged disparity in unionization trends is found by comparing apples to oranges: declining private-sector unionism in the U.S. is compared to increases in unionism (private and public) abroad. Troy shows a universal decline in the share of private-sector workers enrolled in unions.

Neither Ronald Reagan nor the right to hire replacements killed organized labor. Labor's woes are primarily self-inflicted: huge wage settlements in major industries have driven up labor costs and made many American products uncompetitive compared to those of lower-wage countries like Japan and South Korea. Even Canada, where government intervenes actively on behalf of private-sector unions, has experienced a surge in non-union employment. Competitive markets "repeal" the legal protection bestowed by government. If the President does not veto the replacement-workers bill, striking workers will be replaced not by other workers in their own shops, but by other companies, some of them in other countries.