The Future of Unions Looks Very Different

The labor movement is having a moment. In a tight employment market, there is money to be had — or profits to be more generously shared — and workers have gotten some big wins recently. Even reality TV stars and NFL running backs are getting into it.

But this is not a revival of unions. In fact, unless they reform, it could be their last gasp. Yes, there have been more union drives and some undeniable successes. There is public support for a possible UAW strike this week and for unions in general. If you ask working Americans, however, most of them — about two-thirds of them, according to a 2022 Gallup poll — don’t want to actually be in a union. That helps explain why many union drives fail.

In a changing economy, the benefits of being in a union are often less compelling and the costs are still significant. That doesn’t mean unions don’t serve an important purpose. It does mean that they have to change.

Being in a union costs money. Workers not only have to pay dues, but unions work by compressing wages (and often the terms of advancement) in negotiations on behalf of all employees. This means very productive workers are paid almost the same as unproductive workers.

In the 1960s, even productive workers liked this deal, because it gave them job stability. There were also more gains to be divided up: The US was the world’s industrial superpower, with little competition, and companies made large profits that could be shared with workers. Work then was more labor-intensive and harder to outsource, giving workers more bargaining power.

But today’s economy pays higher returns to exceptionally productive workers, and technology gives employers the ability to learn which employees are more productive. So an arrangement that made sense six decades ago makes less sense for workers now — especially the better ones. And there is lots of uncertainty to come, as AI brings more change and takes more power from workers.