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Why labor unions can't win

Rick Newman
The Exchange
FILE - In this July 31, 2012 file photo, an employees at the Volkswagen plant in Chattanooga, Tenn., works on a Passat sedan. A three-day election on whether workers will be represented by the United Auto Workers union concludes on Friday, Feb. 14, 2014. (AP Photo/Erik Schelzig, file)

They’re not dead yet. But labor unions have become so unpopular they can't organize workers even with the blessing of employers.

Chattanooga, Tennessee has become the latest mournful battlefield for the United Auto Workers, which lost a closely watched unionization vote at the Volkswagen factory there. Unlike other automakers, Volkswagen allowed the UAW free access to its workers and tacitly approved the unionization effort, since the German automaker works closely with unions in its home country and other nations where it manufacturers vehicles. Even that couldn't put the UAW over the top, however, and the defeat could signal a dead end for the UAW in its plan to unionize other southern auto plants run by firms such as Mercedes, BMW, Toyota, Honda, Hyundai and Kia.

The Chattanooga vote became a sort of national litmus test of union power, with public figures such as conservative activist Grover Norquist and Republican Senator Bob Corker of Tennessee joining some local officials in the fight against the UAW. That may have helped tip the balance, but unions in general are in a sharp decline that shows no sign of reversing. With unemployment persistently high, CEOs getting richer than ever and worries about income inequality frequently making the evening news, you might think it’s a ripe time for unions to recruit more members among the dispossessed workers of America. But it's not happening, as the following two charts show:

Total union membership, in thousands:

Union membership rate:

(Source: Bureau of Labor Statistics)

What’s especially striking is the plunge in the total number of union members, which has occurred despite a growing population. Manufacturing unions have fared even worse than the charts suggest, since the strongest unions these days represent government bureaucrats and service workers such as janitors, security guards, chambermaids and home-health aides.

UAW membership has crept upward during the past few years, as the auto industry itself has recovered and the Detroit automakers which employ UAW workers at all their U.S. plants have boosted hiring. But the UAW’s 383,000 members are just one-fourth the total the union claimed in 1979, its peak year. Plus, concessions have cut sharply into the union’s power. As part of 2009 bankruptcy negotiations for General Motors and Chrysler, for instance, the UAW agreed to reduced pay for younger workers and far fewer job guarantees. Union detractors in Tennessee even point out that Volkswagen tends to pay its non-union employees better than GM pays UAW workers 150 miles away.

Many Americans blamed the collapse of the U.S. auto industry in 2009 on unions, which is a bit unfair, because the Detroit automakers suffered from overcapacity, mismanagement, strategic mistakes and many other problems, in addition to overly generous union contracts. Yet the animosity directed toward unions and the two automakers that received federal bailouts--GM and Chrysler--marked a new low for unions, from which they still haven't recovered, as these polling numbers from Gallup show:

In fact, if you eliminate that anomalous drop in popularity that began in 2009, the current approval rate of 54% would be a record low. That hardly shows a nation eager to band together for the collective good and overthrow The Man.

There’s another factor working against unions that’s harder to capture in polls. A growing percentage of Americans clearly feel too many people are entitled to benefits they haven’t earned. That’s one reason the Affordable Care Act, which will probably help far more people than it hurts, remains unpopular — people detect a giveaway financed by the middle class. Whether deservedly or not, unions suffer from the same stigma, since they long guaranteed workplace protections other Americans didn’t have. As membership declined starting in the 1980s, unions increasingly represented a privileged minority out of touch with the need to hustle and produce, like other Americans.

Volkswagen wants to operate a “works council” at its Chattanooga plant, which is basically a labor-management mashup that cooperates on decision-making regarding important company matters. VW believes such councils are highly effective at unionized factories in Germany and elsewhere, which is why it was open to unionization in Chattanooga. But now it will have to figure out if it can operate a council without a union. The UAW might have to get used to such an outcome.

Rick Newman’s latest book is Rebounders: How Winners Pivot From Setback To Success. Follow him on Twitter: @rickjnewman.