During World War II, the federal government kept labor unions on a tight leash for fear that their organizing might undermine industrial production for the war effort. However, with the end of the war, unions’ power and influence surged. By 1954—less than a decade after peace treaties had been signed—the percentage of American workers in a union reached an all-time high of 35%.
This ascendance by the forces of organized labor would prove to be short-lived, for the second half of the 20th century witnessed a precipitous drop in union membership; by 2013, after more than 50 years of decline, the percentage of workers in a union hovered just above 11%. What happened during those decades to diminish the strength of unions?
The rise of foreign competition against American manufacturing created pressure on for unions at home. While American manufacturers and workers had long enjoyed protectionist economic policies that effectively subsidized domestic products, by the 1970s, inexpensive foreign goods claimed an increasing share of the U.S.-market. Germany and Japan built cars and electronics, for example, while Asian and Latin American countries exported clothing that was cheaper than that produced by Americans.
In response, American businesses tried to remain competitive, so they laid off workers and thus thinned the ranks of unions. Some businesses even went so far as to relocate their production facilities overseas to take advantage of cheap labor abroad and free trade agreements like the North American Free Trade Agreement (NAFTA). As manufacturing jobs flowed out of the U.S. and into developing nations, American unions continued to shrink and to lose their old strength.
Instead of moving abroad, businesses also relocated factories within the country, and especially to the South where labor was cheaper and where unions were weak. Furthermore, as workers watched their jobs go overseas, businesses quashed hopes for unionization by threatening to close or relocate their factories, which forced workers to abandon union drives in order to simply keep their jobs.
Another major trend to undermine unions was a wave of deregulation that crested during the 1980s. In an effort to increase competition, eliminate burdens on businesses, and create choice for consumers, the government deregulated a number of industries during the late 20th century that had the effect of shifting the balance of power in labor relations back to employers. This further weakened unions, and in the Air Traffic Controllers’ Strike of 1981—the climax of the deregulation movement—President Ronald Reagan dealt a severe blow to unions by firing thousands of striking government workers.
Today, most labor unions are affiliated with either the American Federation of Labor-Congress of Industrialized Organizations (AFL-CIO) or the Change to Win Foundation. Just 6.7% of private workers are unionized compared to 35.3% of public workers; public unions, notably, have grown just as their private-sector counterparts have shrunk. Unions still face challenges related to globalization as well as deregulation and government scrutiny, and now, they also advocate for workers against the threat of workplace automation.