The decline of unions in America abetted more by Supreme Court

Unions, once civil and economic institutions that loomed large in our society and economy, have been under attack and on the decline for decades. Today, the Supreme Court could have delivered another body blow to unions, specifically public-sector unions, but instead the damage, while significant, wasn’t fatal. The decision won’t help reverse growing income inequality in the United States, but it probably won’t accelerate the trend significantly.

Here’s what the court decided today. Justice Samuel Alito, writing for a five-justice majority, found that some public-sector workers cannot be compelled to pay certain fees to unions. The case before the Supreme Court, known as Harris v. Quinn, centered on the ability of unions to require workers covered by collective bargaining agreements to pay fees to the union.

Traditionally, unions would have workers in unionized workplaces pay one fee that covered both the operations of collective bargaining as well as union membership dues. But after an earlier Supreme Court decision, Communication Workers of America v. Beck, workers covered by collective bargaining agreements can’t be compelled to pay membership fees. But they must pay agency fees to cover the union’s collective bargaining efforts.

What was at stake in today’s Harris v. Quinn decision was the ability of public-sector unions to compel workers to pay the agency fee. Without the agency fees, unions would have to raise membership fees that might well drive out some members and probably result in a larger fee increase, which in turn might push even more members out of unions. If that dynamic sounds familiar, it’s because that’s what happened at the state level when legislators enacted so called right-to-work laws, which actually did cause the membership death spiral described above.

A combination of existing and newly enacted right-to-work laws at the state level, deteriorating support at the federal level for union organizing in the workplace, and the decline of once highly unionized industrial firms in our nation have resulted in a sharp decline in union membership rates. In 1973, 24 percent of all U.S. workers were unionized. By 2013, only 11.2 percent were unionized.

Importantly for the relevance of Harris v. Quinn, the trends in unionization have been quite different for public-sector workers compared to their private-sector counterparts. Private-sector unionization rates have dropped significantly from 24.2 percent in 1973 to 6.7 percent in 2013 while public sector rates have actually increased from 23 percent to 35.3 percent over the same period.

The decline of private-sector union membership is a major contributor to the rise in income inequality over the past 30 plus years. This decline is responsible for between 15 percent to 20 percent of the rise in wage inequality for male workers between 1973 and 1993, according to research by University of California-Berkeley economist David Card. A more recent study by sociologists Bruce Western of Harvard University and Jake Rosenfeld of the University of Washington finds that unions not only help lift wages directly but also indirectly by setting pay norms within industries and across sectors. Once those factors were considered, the two authors estimate that 20 percent to 33 percent of the rise in wage inequality from 1973 to 2007 can be contributed to declining unionization.

Today’s ruling was not the death knell that many observers expected. Yet unions are still an institution on the decline. The slow and steady decay of unions has many consequences for the U.S. economy and our society writ large. A fatal blow wasn’t struck today.  But that day may not be far off if present trends continue.