Everyone loves the party game/icebreaker “two truths and a lie.”
American workers have moved away from organized labor of the past five decades. Federal legislation before Congress seeks to boost union participation. Can you identify which of the following is NOT true about unions?
A. Union membership is at historic lows.
B. Right-to-work laws have freed millions of non-union workers from supporting unions with dues.
C. Independent contractors need unionization to negotiate the pay they desire.
A. TRUE! Membership in private sector labor unions have been falling for decades. In 2020, the union membership rate fell to 10.8 percent, which is half of the level it was in 1983 when first tracked. Some 15.9 million wage and salary workers were represented by a union last year, which includes members and non-members whose jobs are covered by a union contract. This number was down 444,000 from 2019. However, fifty years ago nearly a third of U.S. workers belonged to unions and today it’s just one in ten.
B. TRUE! When we look at the geographical representation of union membership we see that unions are concentrated in some states. Seven states account for over half of the country’s union members: California, New York, Illinois, Pennsylvania, Ohio, Michigan, and New Jersey.
The two biggest factors determining the strength of unions in a state are the industries of a state and whether it is a right-to-work state. Right-to-work laws prevent collective bargaining agreements from requiring all workers at a company to pay dues. This spares non-union members from being forced to pay dues and indirectly funding the causes and candidates that unions support. For example, spending on Democratic candidates by teachers’ unions eclipsed spending on Republicans every year for the past 30 years and probably longer.
C. FALSE! Independent contractors are workers who contract their labor to companies, but are not employees. Whereas employees can be unionized and may choose to do so for different reasons, independent contractors (or freelancers) choose flexibility and the freedom to negotiate their compensation. They do not earn benefits such as healthcare and retirement benefits, but they can often negotiate higher rates and secure those benefits on their own. Independent contractors largely prefer to remain independent. Whether because of caregiving responsibilities, health issues, or family issues, many cannot work in a traditional job, but contracting work allows them to remain in the workforce.
The gig economy has increased the number of independent contracting opportunities, such as rideshare and delivery drivers. However, everyone from musicians to journalists carve out a living as independent contractors.
This poses a threat to unions. These workers cannot be unionized and other workers are increasingly leaving traditional (unionizable) jobs to pursue independent contracting. As a result, organized labor is behind efforts by states and Congress to impose a more stringent definition of independent contracting that will effectively reclassify most them as employees, whether they want to be or not and regardless of if companies can afford to hire them as employees. This will lead to job losses. When California passed Assembly Bill 5 (AB5), which codified the more stringent test and recassified its workers, independent contractors lost jobs, contracts, and saw their incomes cut.
Congress is considering the Protecting the Right to Organize Act (PRO Act), a federal version of AB5. It will have devastating impacts on independent contractors as AB5 did in California while boosting union power and coffers.