• Free for qualified executives and consultants to industry

  • Receive quarterly issues of Area Development Magazine and special market report and directory issues


Front Line: Union Activity Showing Recent Spikes

Although unions’ influence in the U.S. has diminished over the last four decades, they are still playing a key role in manufacturing and, more recently, the distribution sector.

Q3 2018
On May 31st, 178 workers at Boeing’s factory in North Charleston, S.C., voted to unionize, more than a year after a broader union vote failed at the plant that makes Boeing 787 airliners. Although the number is a relatively small share of Boeing’s 6,749 workers in the Charleston area, the vote is considered “a major victory for organized labor in South Carolina, which has the nation’s smallest number — 2.6 percent — of workers who belong to a union,” the Charleston Post and Courier reported.

Does the Charleston vote portend a resurgence of labor unions in the United States, which have had shrinking memberships for decades? A recent article on declared, “Organized labor is showing new signs of life.” According to the article, last year, U.S. labor unions — whose membership has been shrinking for decades — added 262,000 new recruits.

The percentage of manufacturing industry (durable and nondurable goods) workers in unions edged up to 9.1 percent in 2017 from 8.8 percent in 2016, according to Labor Department data. The share of all American workers belonging to labor unions held steady in 2017, matching the historic low of 10.7 percent set in the prior year, said the Department.

Unions’ Continuing Role
While unions’ influence has been diminished, they still have a role to play in sectors like manufacturing and distribution, says John Budd, a professor of Work and Organizations in the Carlson School of Management at the University of Minnesota.

Forty years ago, more than one third of manufacturing workers were represented by unions. Now, that figure is closer to 10 percent, Budd says. Even in the formerly union-dominated auto industry, union membership has dropped from more than 60 percent in the early ’80s, to 20 percent or less.

In the auto industry, unions have had difficulty unionizing new plant locations; a number of those new auto plants have opened in the South, where unions have historically had much less influence, Budd notes. “The UAW has tried for decades” to unionize new U.S. plants opened by Asian and European automakers without much success. “Companies are very strategic about where they open plants, often choosing rural areas where unionization doesn’t have a strong history, and not opening plants in cities, to keep labor costs low.”

While employers and labor unions have traditionally been adversaries, they have sometimes collaborated in employee training and re-training programs. That isn’t as common anymore, Budd says. “When unions feel their existence threatened, training becomes a luxury. In some places, unions feel so threatened, they end up spending most of their time fighting to survive.”

Still, it would be foolish to suggest that labor unions will soon be a thing of the past just because overall union membership has declined in the U.S. John Budd, professor of Work and Organizations, Carlson School of Management at the University of Minnesota Over the years, some of the issues that have spurred union activity — such as workplace safety, hours, or other ways workers are treated — have become less urgent, at least in the U.S., Budd points out. “Research shows workers typically turn to unionization when they are dissatisfied,” he says. But workplace improvements like better HR practices, increased safety protection, and higher minimum wages have made employees less likely to unionize. “Employees may feel because they are being treated well, they wouldn’t benefit from a union,” Budd explains.

In recent years, in some settings, union participation has been supplanted by other grassroots worker movements like the “Fight for 15” effort that helped bring about higher minimum wages in some states and cities. Still, Budd says, it would be foolish to suggest that labor unions will soon be a thing of the past just because overall union membership has declined in the U.S.

“Just because (growth in unions) doesn’t look likely where we sit today, doesn’t mean we couldn’t be surprised. As recently as five years ago, we wouldn’t have used ‘fast food’ and unions in the same sentence,” he says. Although there hasn’t been a lot of fast food unionization, fast food chains have been impacted by grassroots campaigns for higher wages.

Unionizing the Distribution Sector
The distribution sector — which has been transformed by the rapid growth of online retailers like Amazon and has grown briskly in recent years — has shown an increase in union activity, Budd says. Earlier this year, 250,000 Teamsters authorized a strike at UPS, before settling on a deal. Retailing giant Amazon was batting a thousand in its efforts to quash any attempts at organizing its workers — until this year. In June, Amazon employees in Italy made history, announcing the first-ever direct agreement between unions and the company anywhere in the world. The Italian agreement addresses excessive work scheduling, a common complaint at Amazon fulfillment centers worldwide. It is intended to ensure fairness in scheduling. The union’s win in Italy followed months of protests and organizing by Italian and German workers.

Before Amazon, the commercial distribution sector was highly unionized, Budd says. “But Amazon has been changing the model in a lot of ways, with very aggressive efforts to keep labor unions out. As in the auto sector, companies have been strategic in choosing locations for new facilities. Many of them are in rural areas where they aren’t a lot of options for decent-paying employment; employees don’t want to rock the boat,” Budd explains.

Will Amazon’s Italian labor agreement be replicated in the U.S. or elsewhere? That remains to be seen, Budd says.

Exclusive Research