Meet the Author

Yoonsoo Lee |

Research Economist

Yoonsoo Lee

Yoonsoo Lee was formerly a research economist in the Research Department. His areas of research include macroeconomics, labor economics, and regional economics.

Meet the Author

Beth Mowry |

Research Assistant

Beth Mowry

Beth Mowry was formerly a research assistant in the Research Department of the Federal Reserve Bank of Cleveland. Her work focuses on labor markets and business cycles.

11.09.07

Economic Trends

Union Membership

Yoonsoo Lee and Beth Mowry

After the National Labor Relations Act became law in 1935, organized labor unions experienced growing popularity and began to exercise their rights to collectively bargain and take part in strikes.  The Act was a spin-off of President Roosevelt’s New Deal, which was aimed at supporting prices and stimulating recovery from the Great Depression.  Union membership increased steadily until 1954, at which point more than a quarter of all workers were unionized (17 million out of 60 million, or 28.3 percent). But since that peak, union membership has declined and stands at an all-time low of 12 percent (as of 2006).

It is not just that union membership is growing more slowly than overall job growth; the number of union members has actually been declining.  While the number of people employed has increased 14 percent over the last decade, the number of union members has dropped 5.6 percent.  In 2006, out of the 128.2 million workers employed, 15.4 million were union members.  Some economists attribute the decline in union membership to the labor force’s shift away from heavily-unionized industries such as manufacturing.  Others argue that the demand for union representation has declined over time, as the public provision of social welfare benefits by the government has increasingly substituted for the benefits of union service.

The number of work stoppages has followed the same trend as union membership, declining sharply in the 1970s.  In 2006, there were only 20 major work stoppages (involving 1,000 or more workers), compared to the 1970s, when more than 200 strikes occurred each year.  The number of union members involved in each strike has declined as well: in the 1970s more than 1 million workers participated in strikes each year, whereas in 2006 the number had fallen to only 70,000.

On average, union workers and the members of similar employee organizations still earn higher hourly compensation, including retirement and benefits. Average hourly compensation including benefits was $35.69 for union members and $24.79 for non-union members in the second quarter of 2007.  In 2006, weekly wages and salaries for union members was $833, compared to the $642 for non-union workers.

Rates of union membership widely vary across states.  In 2006, 24.7 percent of workers in Hawaii belonged to unions or similar associations, while in North Carolina only 3.3 percent workers did—the lowest in the nation.  Most of the Fourth District states slightly exceed the national average membership rate (12 percent).  Ohio’s 14.2 percent rate was above the nation’s average and was a significant decline from its rate in 2000 of 17.4 percent.  West Virginia, Pennsylvania, and Kentucky’s union membership rates stand at 14.2 percent, 13.6 percent, and 9.8 percent, respectively.