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Labor Unions in the United States – How They Work, Pros and Cons


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When you read news stories about the middle class in America, you often see terms such as “squeezed” or “declining.” As a 2017 study by the National Bureau of Economic Research (NBER) points out, average lifetime earnings for U.S. workers have been stagnant for decades, even as the cost of a middle-class lifestyle has risen sharply.

Politicians on both sides of the aisle hate this trend, blaming it on everything from tax policy to immigration. But there’s one piece of the picture that they tend to overlook: the decline of labor unions.

According to the left-leaning Center for American Progress (CAP), between 1967 and 2019, the share of American workers in unions fell from 28.3% to 10.4%. And the percentage of income going to the American middle class fell right along with it, from 52.4% to 45.1%.

So, it’s worth considering what role labor unions have played in America’s past and what role they could play in its future. 

How Labor Unions Work

At its core, a labor union is simply a group of workers who band together to negotiate with business owners over pay and working conditions. Unions can represent workers in a particular field or workers across different fields who do similar kinds of work. Unions also play a role in politics, pushing for policies that improve the lives of all workers in the country.

Collective Bargaining

Here’s an example of how a union works. Suppose you’re a factory worker who’s unhappy with your job. You’re on your feet for hours at a time in a building that’s too hot in summer and too cold in winter, and you’re barely earning a living wage. But when you complain to your boss about the working conditions, they simply say that if you don’t like it, you can quit.

If you can’t afford to do that, you’re pretty much out of options. Because you’re only one person, you don’t have much leverage to bargain with the boss. After all, employers have plenty of other workers, so the threat of losing one isn’t a big deal.

But suppose you get all the workers at the factory to go to the boss as a group and demand better wages and working conditions. You announce that if you don’t get what you want, you’ll go on strike — that is, you’ll all stop working at once, grinding production to a halt. Now the tables are turned; it’s the workers who have the upper hand in the negotiation.

This is a very simple example of collective bargaining, which is the main function of a union. In collective bargaining, union leaders speaking on behalf of workers sit down with the owners of a business to work out a contract for all of the workers in the business. They can negotiate over matters such as wages, working hours, vacation time, or even the nature of the job itself.

This kind of bargaining isn’t the same as haggling over prices at a store or a car dealership. In labor negotiations, both parties are aiming for the same result: a deal that will keep the workers happy while allowing the business to survive and prosper. 

Usually, collective bargaining is an ongoing process. Union and management leaders sit down together on a regular basis to fine-tune the deal and make sure it still works for everyone.

Unions in Politics

In addition to bargaining with employers directly, unions hold considerable sway in politics. They back candidates for office and also lobby for specific laws they hope will improve conditions for workers. Unions often support policies such as:

A Higher Minimum Wage

Most unions represent skilled workers, who typically are earning more than minimum wage already. However, raising the minimum wage can help union workers indirectly. 

If an employer can hire a skilled worker for $20 per hour or an unskilled, minimum-wage worker for $8 per hour, it’s much cheaper to hire the unskilled worker. But if the minimum wage goes up to $15 per hour, suddenly there’s not so much benefit to choosing an unskilled worker. This makes employers more likely to hire the higher-paid, skilled workers the union represents.

Trade Restrictions

Unions usually support some level of protectionism as opposed to free trade. They favor tariffs and quotas on imported goods to raise the demand for products made in the United States. Boosting U.S. manufacturing increases the demand for U.S. labor, which means more available jobs and higher wages for union members.

Immigration Restrictions

Along the same lines, unions usually favor stricter immigration rules. Limiting the number of workers coming in from other countries makes for a tighter labor market, which drives up wages.


History of U.S. Labor Unions (The Rise and Fall)

American workers formed unions as early as the late 1700s. For instance, printers in New York City unionized in 1778, and carpenters in Philadelphia fought together for a 10-hour workday in 1791. However, most of these early unions were short-lived, breaking up once they’d achieved their goals.

Labor unions pushed for bigger things after the Civil War, with mixed results. Their first successful involvement in politics came in 1868 when a coalition of skilled and unskilled workers and farmers called the National Labor Union succeeded in convincing Congress to establish an eight-hour workday for federal employees. 

In the 1890s, both the Pullman Railroad workers and the United Mine workers went on strike for higher pay and better working conditions, but the government broke up both strikes. In 1881, workers from national and local unions banded together to form the Federation of Organized Trades and Labor Unions, which later became the American Federation of Labor (AFL).

The power of labor unions grew during the 20th century when Congress established the Department of Labor (DOL) and passed several worker-friendly laws. The Clayton Antitrust Act protected workers’ right to go on strike. The Fair Labor Standards Act established the federal minimum wage, rules for overtime pay, and restrictions on child labor. 

During the Great Depression, unions became a key part of the New Deal Coalition, which supported President Roosevelt’s policies. The union movement hit its peak after World War II. Unions in several different industries held successful strikes, and organized labor became a major force in the economy. By 1954, nearly 35% of all American workers were union members. 

In 1955, the AFL merged with the Congress of Industrial Organizations (CIO) to form the AFL-CIO, the longest-lived and most powerful trade union in U.S. history. However, at the height of their power, some unions — notably, the Teamsters Union, which represents truck drivers — were plagued by corruption and ties to organized crime.

Unions remained a strong force in the economy during the 1960s and 1970s, but their power was gradually declining. Cheap imports weakened U.S. manufacturing. Many factories either moved to Southern states where unions were weaker or moved overseas.

At the same time, businesses jumped into the political arena. They spent vast sums to fight against laws that would strengthen unions. 

Unions lost much of their influence with the Democratic party, and Republicans turned against them entirely. In 1981, President Ronald Reagan, who had once been a union president himself, broke a strike by PATCO, the air traffic controllers’ union. This move undermined the power of the union movement as a whole.

Today, according to the Bureau of Labor Statistics (BLS), less than 11% of all American workers are members of unions. In the private sector, that figure is less than 7% of workers. 

Many of the largest U.S. companies are actively hostile to unions and go to extreme lengths to stop their workers from joining one. For instance, The Atlantic reported in 2015 that Walmart, the nation’s biggest private employer, had fired and disciplined workers who attempted to organize. It even closed down stores where workers had joined or formed unions.


Pros of Labor Unions Around the World

Although unions have lost much of their influence in the United States, that isn’t true in all parts of the world. According to the International Labour Organization, union membership ranges from over 90% of workers in Iceland to less than 1% in Venezuela.

Workers in countries with higher rates of union membership enjoy several benefits that American workers don’t.

Higher Wages

According to the Organisation for Economic Co-operation and Development (OECD), the United States has the most low-paying jobs out of all the OECD’s member countries. It defines low-paying jobs as jobs with a yearly salary less than two-thirds of the country’s median income. 

In 2020, nearly 1 in 4 jobs in America were low-wage jobs. The rates for other countries ranged from just 1% in Turkey to 22.4% in Israel. In general, countries with above-average rates of union membership have lower-than-average rates of low-paying jobs.

Shorter Work Hours

Data from the OECD also shows that American workers put in an average of 1,767 hours per year on the job. That’s quite a bit lower than some countries, such as Colombia, where the average is 2,172 per year. However, it’s still higher than the OECD average. 

By contrast, most countries with high rates of union membership fall below the OECD average for hours worked. The average for the European Union, where most countries with high union membership are found, is only 1,515 per year. 

More Income Equality

The most common measure of income inequality in a country is the Gini coefficient, which is the average difference in income between any two people in that country. It ranges from zero (meaning everyone in the country has equal income) to 100 (meaning a single person has all the income). 

According to the CIA World Factbook, the Gini coefficients of nations around the world range from 22.7 in the Faroe Islands to 63 in South Africa. The United States comes in at 41.1 — not the highest, but much higher than the median. 

That’s bad news for several reasons. For one, according to a 2017 study in Frontiers in Psychology, the countries with the highest Gini coefficients have lower overall levels of happiness. Countries with more inequality also tend to have more poverty, worse education, more violent crime, and shorter lifespans

On top of that, according to a 2015 report from the International Monetary Fund (IMF), higher income inequality in a country tends to hold back economic growth. In a separate report, the IMF argues that weaker unions are one of the factors behind rising inequality around the world.


Pros of Unions

In the U.S., big businesses have a lot of power. They control a large share of the nation’s money, and their wealth gives them a substantial influence in politics.

Unions can serve as a counterbalance to the power of big business. They make it possible for workers to carry more weight in the economy and have a voice in the political process, something they couldn’t easily do on their own. That has obvious benefits for workers, but it can also improve the economy as a whole.

Pros for Workers

Belonging to a union can make workers’ lives better in several ways, some more obvious than others. These include:

1. Better Wages

Union members typically earn more than workers who don’t belong to unions. According to the BLS, American workers who are members of unions earned a median weekly wage of $1,144 in 2020. The median wage for non-union workers was $958, only 84% as high.

This difference could be partly because union members are more likely to hold skilled jobs that pay better. However, a 2020 report by the Economic Policy Institute (EPI) shows that union workers earn an average of 11.2% more than non-union workers in the same field, even with the same level of education and experience.

2. Better Benefits

In addition to higher wages, union workers tend to enjoy better benefits. These include:

  • Access to Health Insurance. The BLS reported in 2020 that 95% of all union workers had access to an employer-sponsored health insurance plan. For non-union workers, that rate was only 68%. 
  • Health Insurance Premiums. Union workers also paid less out of pocket for health insurance. On average, they paid 15% of their own health care premiums and 21% of the cost to cover their families. Their employers picked up the rest of the tab. Non-union workers had to pay 21% of the cost for themselves and 36% of the cost for their families.
  • Life Insurance. Among unionized employees, 85% had access to a life insurance plan at work. Only 56% of their non-union counterparts did.
  • Retirement Benefits. Workplace retirement plans, including pensions and defined-contribution plans like a 401(k) or 403(b), were available to 94% of unionized employees. Only 67% of non-union workers had access to retirement benefits.  

3. Better Working Conditions

Back in the 1800s, before the rise of unions, working conditions in the U.S. were typically harsh. Even in good times, it was common for workers to put in 10 to 12 hours per day on the job. Child labor was common, and factories were often unsafe, resulting in deadly accidents. The work was repetitive and tiring.

Unions helped put an end to these abuses, both by collective bargaining and by pushing for stronger laws to protect workers. Today, unions continue to fight to stop Congress from weakening existing labor laws.

4. Greater Job Security

Workers who don’t belong to a union are usually hired “at will,” which means they can be fired at any time for any reason. There are some exceptions — for instance, an employer can’t fire a worker on the basis of race, religion, or age. But in general, workers have no protection against being fired without warning.

Union workers, on the other hand, can generally be fired only “for cause” — that is, for a specific, legitimate reason. Employers can fire an employee who doesn’t do a satisfactory job or one who breaks their rules. They can also lay off workers they can no longer afford to keep. An employee who’s fired has the right to know why and to challenge the decision. 

Aside from the obvious perk of making their jobs more secure, this arrangement makes workers more willing to speak up about problems they see in the workplace, such as safety issues. A non-union worker who discovers a problem might be afraid to complain out of fear that the boss will simply fire them.

5. Greater Upward Mobility

The benefits of being in a union aren’t just for workers themselves. They also extend to those workers’ children. 

A 2015 CAP study looked at the earnings of people between the ages of 26 and 37 whose parents did not go to college. It found that if at least one of their parents was a union member, they earned about 18% more than the children of non-union parents, even if the children weren’t union members themselves.

That holds true even if you control for other factors, such as education, race, and location. Children of union members also stayed in school an average of half a year longer and reported slightly better levels of overall health.

Pros for Society

Stronger unions offer benefits not just for their workers, but for society as a whole. Having more workers in unions can lead to:

1. Stronger Industries

Unions typically push for policies that give a boost to domestic industries. One example is the auto industry in Germany, a country that has significantly higher rates of union membership than the United States. 

According to the Utility Workers Union of America (UWUA), German auto workers are paid nearly twice as much as those in the U.S. Yet despite this added cost, Germany’s auto industry is highly productive and highly profitable.

2. More Productive Workers

A 2020 study published in The Economic Journal looked at what happened when changes in Norway’s tax code boosted union membership. It found that when the union membership rate within a company goes up, its productivity rises too. 

There are several possible reasons why unions can improve productivity. For one, unions themselves can provide training to workers, making them more productive. The UWUA also argues that when labor costs are high, businesses are more likely to invest in training and equipment so they can get more value out of each worker.

The authors of the 2020 study also point out that unionized workers are likely to stay with a company longer. They can learn their jobs better and do a better job communicating with management about ways to make the work go more smoothly. And finally, because union jobs pay better, they can attract more applicants, so companies can choose the best workers. 

3. Higher Incomes

Unions can raise income levels not just for their members, but for all of the workers in a region. A 2016 study by the Economic Policy Institute (EPI), a pro-labor think tank, shows that as unions in America have declined, wages have stagnated for non-union workers too. The effect was highest for men without college degrees. 

The study estimated that if union membership had remained at its 1979 levels through 2013, men in this group would have earned about 8% more than they actually did that year.

4. Less Poverty

Because unions push wages up, they reduce the number of people living in poverty. This saves the government money because fewer people need government aid such as Medicaid, SNAP (food stamps), and subsidized housing

Unemployed people aren’t the only ones who rely on these programs. Many of their beneficiaries are workers in low-wage jobs. A 2020 Government Accountability Office report shows that the majority of Medicaid and SNAP recipients are low-wage workers. Employees of Walmart, a staunch opponent of unions, were heavy users of these programs in every state.

5. A Stronger Middle Class

Unions strengthen the middle class in two ways. First, by keeping wages up, they help more people maintain a middle-class lifestyle. Second, they support programs that help middle-class families prosper, such as Social Security and the Affordable Care Act

According to a 2018 Pew report, the share of all American adults who belong to the middle class fell from 61% in 1971 to 52% in 2016. A 2016 CAP report estimates that the decline in unions is responsible for nearly half of this drop.

6. More Even Wealth Distribution

Here in the United States, income inequality has risen sharply since the 1950s as union membership has dropped. According to a 2021 EPI report, the share of income going to the top 10% rose from 35.9% in 1953 to 45.8% in 2019. Over the same period, union membership fell from 33.2% of workers to 10.3%. 

By contrast, in countries where unions have remained strong, income distribution is much more even. According to the 2015 IMF report, when rates of union membership in a nation go down, more of that nation’s income goes to the wealthiest inhabitants.

Unions can also improve wage equality along racial and ethnic lines. A 2017 EPI report points out that low-income workers, who are more likely to belong to minority groups, benefit more  from union membership than higher-wage workers. Black and Hispanic workers tend to see a larger wage boost from unionization than their white counterparts.

7. Stronger Communities

High rates of union membership can strengthen communities. Unions drive up wages, putting more money into the local economy. Higher wages also add up to higher tax revenues, giving these communities more money to spend on facilities such as public schools and libraries. 

8. Stronger Democracy

Finally, unions increase participation in the democratic process. A 2010 study at the University of Washington found that voter turnout is 6.7 points higher among private-sector union members than among other private-sector workers. 

The presence of unions in a community can boost voter turnout even among non-union workers. A 2011 paper in Electoral Studies shows that in countries with high rates of union membership, even non-union members are more likely to vote. 

Similarly, a 2006 study at the University of Michigan shows that in U.S. congressional districts where unions were politically active, voter turnout was about 5% higher. In particular, minority and working-class voters were more likely to show up at the polls.


Cons of Unions

Although unions can have obvious benefits for workers and society, some people believe these benefits come at too high a cost. In theory, unions give workers a voice to balance out the power of big business. However, critics argue that unions can tip the balance too far in the other direction. 

Opponents hold that unions can drive up pay and benefits to unsustainable levels, making it hard for businesses to survive. Plus, they argue, union workers’ gains often come at the expense of taxpayers, consumers, and other workers.

Cons for Workers

Although union membership has some obvious perks for workers, it has its costs as well. These include:

1. Union Dues

Unions charge dues to their members to cover their costs, such as the salaries of union leaders and wages paid out to workers during a strike. Dues can be either a fixed amount or a percentage of a worker’s pay. Some unions have a sliding fee with lower-income workers paying a smaller share of their income than higher earners.

According to the Fiscal Times, union dues typically eat up between 2% and 4% of a worker’s paycheck. In addition, some unions charge initiation fees of around $50 to $100 for new members. However, because union workers earn about 19% more on average, they still come out ahead.

2. Less Autonomy

When you’re in a union, you’re bound by the decisions that union makes, even if you don’t agree with them. Under rules set by the DOL, all union workers get to vote for their union leaders. However, if those leaders reach a decision they don’t like, they still have to go along with it.

3. Improper Use of Funds

Union dues are supposed to be spent on union activities. However, unions sometimes misdirect this money toward uses that don’t really benefit workers. For instance, the anti-union Center for Union Facts (CAF) reports that top leaders of the AFL-CIO and many other unions earn six-figure salaries.

Worse, sometimes corrupt union leaders steal funds outright. Between 2019 and 2020, several high-ranking officials of the United Auto Workers were charged with embezzling union funds. The criminal complaint said union leaders spent workers’ money on a luxurious lifestyle that included private villas, gourmet meals, golf outings, pricey liquor, and designer clothes.

Unions also sometimes spend their members’ dues on political campaigns — in some cases, without telling the workers about it. That effectively forces workers to spend their money on backing a candidate they may not even support. 

A 1988 Supreme Court case, Communications Workers of America v. Beck, allows union members to get a refund for any part of their dues spent on politics. The 2018 case Janus v. AFCSME went even further. The court ruled that unions are inherently political and public-sector workers can never be required to pay for membership in one.

4. Tension in the Workplace

Unions can often create tension between workers and their employers, causing them to see each other as adversaries. A 2011 Gallup-Healthways survey found that union workers score lower than non-union workers on the Work Environment Index, a measure of satisfaction and trust in the workplace.

Although both groups of workers were about equally satisfied with their jobs, union workers were more likely to say that their supervisors act like bosses rather than partners. They were also less likely to say that their supervisors always create a trusting and open environment at work.

5. Slower Advancement

Most unions have rules that favor senior workers — that is, the ones who have been with a company the longest. If there are layoffs, the employer must let go of the newest employees and keep the most senior ones. In some cases, senior workers also get top preference for promotions or other open jobs.

The advantage of seniority is that it’s an objective standard, making it harder for employers to favor certain workers for no good reason. However, it also makes it harder for younger workers to get ahead. No matter how talented or productive you are, you can still be laid off first just because you’re newer or be passed over for promotion in favor of a long-term employee.

Cons for Society

Opponents of unions argue that even if unions are good for their workers, they cause more harm than good to the economy as a whole. Problems unions can create include:

1. Higher Labor Costs

Unions tend to drive up the cost of labor for businesses in their area. According to Statista, it cost businesses an average of $50.73 per hour in wages and benefits to pay union workers in 2021. The cost for non-union workers was just $35.46 per hour. 

Unions can also increase the cost of non-union labor by pushing for higher minimum wages. That makes it much more expensive for businesses to operate, especially small businesses with narrow profit margins.

2. Higher Unemployment

When labor costs are high, it’s harder for companies to stay in business and for new businesses to start. That, in turn, can lead to higher unemployment in an area.

However, shifts in employment don’t affect all workers equally. A 2002 NBER working paper finds that when unions play a bigger role in setting wages, employment rates fall among younger and older workers relative to “prime-aged” workers.

Interestingly, though, unemployment rates among these younger and older people do not rise. This suggests that when demand for workers falls, younger and older people become less likely to seek jobs at all. Older workers are more likely to retire, and younger people delay employment by staying in school.

3. Other Costs for Businesses

Higher wages aren’t the only cost businesses have to pay when their workers unionize. They may also need to hire extra staff members to negotiate with the union, settle grievances, or handle the collection and payment of union dues. 

The anti-union consulting firm Adams Nash Haskell & Sheridan (ANHS) analyzed this effect by looking at the budgets of a company that runs 30 factories. Half the factories were unionized and half were not. It found that administrative costs for the unionized plants were about 30% higher.

4. Higher Prices

When employers have to pay more for labor and other costs, they often make up for the lost profit by increasing the prices of the goods and services they sell. Unions can also drive up prices by pushing for trade restrictions, such as limits on cheap imported goods. 

In short, powerful unions can raise the overall cost of living. For workers, this wipes out at least part of the benefit of higher wages.

5. Public Budget Problems

According to the BLS, about half of union members in the U.S. today work for the public sector. This includes the government and other services paid for with tax dollars, such as schools. 

When the leaders of these public-sector unions demand high wages or lavish benefits for their workers, the money to pay for them comes out of the taxpayers’ pockets. This can lead to budget problems in their town or state, forcing the government to choose between raising taxes, cutting other government services, or piling up debt.

An example of this occurred in New Jersey. The state negotiated a contract with public sector workers that included a generous pension plan. Then the state failed to make the full payments to the plan for 25 years, leading to a major shortfall in the pension fund. When the state resumed making its full payment in 2021, it came to nearly 15% of the entire state budget.

Even President Franklin Roosevelt, a big supporter of unions, did not believe in them for public-sector workers. He argued that a strike of public-sector workers would block the government from doing its job. It would effectively transfer power from the voters to the workers holding the government hostage.

6. Less Meritocracy

The strict seniority rules set by most unions can make it harder for businesses to fire workers who do their jobs poorly or promote those who do their jobs well. This is a particular problem for schools. Even the most promising young teachers earn lower wages and are more likely to be laid off than senior teachers whose students aren’t doing as well.

7. Special-Interest Politics

Backing pro-worker political candidates and policies is part of what unions are meant to do. However, some people think that the biggest unions hold too much sway in the political arena.

In some states, union endorsements can make or break a candidate, especially in a Democratic party primary. Because of this, some candidates pander to the unions, changing their positions to earn those endorsements rather than focusing on the voters as a whole.

Another problem is that public-sector unions sometimes play a big part in electing the very officials who will have to negotiate with them over their salaries and benefits. A leader who was elected with the help of a union will be more likely to put its needs first rather than looking at the big picture.

Finally, unions sometimes push for policies that benefit their industry at the expense of society as a whole. For instance, Ordinary Times reported in 2011 that a union of California corrections officers had lobbied heavily for policies that vastly increased the number of Californians in prison.

8. Crime

The most serious charge against unions is that some of them are involved in crime, including violence against non-union workers. For instance, when two Philadelphia developers hired both union and non-union workers for a project in 2012, they experienced repeated threats and vandalism from union workers. Some non-union workers were physically attacked.

Union leaders have been charged with other crimes as well, including corruption and racketeering (fraudulent business dealings). According to the CAF, there were 1,145 indictments and 971 convictions of labor leaders for racketeering between 2000 and 2020.


How to Fix Problems With Unions (The Best of Both Worlds)

For workers, union membership is a pretty good deal. It has its downsides, but they’re usually outweighed by the higher pay and other perks that come with union membership.

What’s less clear is whether having more people in unions is good or bad for society as a whole. Both the benefits and the drawbacks can be significant, so it comes down to a question of priorities. 

For instance, individual cities and states have to decide whether they care more about having more jobs or better-paying jobs. They must also weigh whether cushy benefits packages for public workers will put a bigger strain on their budgets than underpaid people relying on government benefits.

Of course, the ideal outcome for everyone would be to keep the benefits of unions while minimizing their drawbacks. Changing the way unions work could remove, or at least mitigate, some of their most serious problems. 

Unions could make these changes on their own, or the DOL could intervene to impose them. Either way, they would help make unions more viable in the long term.

1. Relax Seniority Rules

Rather than always giving top priority to senior workers, unions could develop formulas that make seniority just one of the factors in decisions about pay, benefits, hiring, and firing. For instance, priority could be based on a combination of seniority and work performance. That would help the best workers rise to the top while still protecting the longest-serving ones.

Changing the rules would also make it easier to fire workers who are truly incompetent. For instance, The Atlantic wrote in 2012 about how union rules protected a campus police officer who had blasted pepper spray into a crowd of peaceful student protestors.

Protecting grossly incompetent or even criminal workers makes unions look bad. Changing the rules that protect these workers could be a smart move for unions, greatly improving their public image.

2. Think Long-Term

Unions need to learn to be realistic about their demands when negotiating. Michele Masterfano of the Huffington Post cites the example of Philadelphia’s teacher’s union in 2013. Even as the city was running a serious budget deficit, the union refused to consider requiring teachers to pay a single dollar toward their health care plan.

In the long run, unrealistic demands like this only end up hurting workers. If cities or states have to pay for a plush benefits package for all their workers, they often respond by cutting workers until there’s hardly anyone left to enjoy those lavish benefits. 

A 2011 Vanity Fair story illustrates how this happened in San Jose, California. Ever-increasing pay and pension costs led the city to cut its public workforce — including firefighters and police — by thousands of people, even as the city’s population increased.

3. Be More Transparent

One of the strongest objections people have to unions is the way they use — sometimes misuse — their money, often in ways they don’t disclose to members. For instance, a 2018 story by NJ Advance Media highlights several potential misuses of funds by the New Jersey Education Association (NJEA). 

For one, a political action committee backed by the NJEA spent roughly $5.7 million on elections in 2017. About $4.5 million went toward a futile attempt to unseat a popular Democratic lawmaker who had opposed the union. And it failed to disclose that most of that money came out of members’ union dues, not from political contributions. 

In addition to that, the executive director of the NJEA earned $1.2 million in pay and benefits in 2015. But his official salary — the amount disclosed to union members — was about $340,000.

In order to end abuses like these, unions need to be open with their members about how their dues are being spent. This would give workers a chance to vote for new leaders if they don’t approve. 

In particular, unions need to be candid about the use of dues for political ends. That would give workers a chance to exercise their Beck rights — that is, the right to a refund of union dues used for political purposes — if they so choose.


Final Word

It isn’t possible to fix all of the problems with unions just by changing their policies. For instance, there will always be a tradeoff between paying workers more and keeping costs low for businesses. However, many of the problems with unions that people object to the most can likely be fixed without having to get rid of unions completely.

Unions may be reluctant to change their ways, but in the long run, it’s in their interest to do so. 

Union membership is still falling, and 27 states already have “right to work” laws that prohibit workers from ever being required to join a union. And in the wake of the 2018 Janus decision, members of public-sector unions, which account for half the union members in the country, can opt out of paying union dues in every state in the country.

If unions want to survive, they need to convince the public that they do more good than harm — for workers, for taxpayers, and for the economy. If they can’t do this, they’ll likely continue to fade away until they disappear completely. If that happens, all of their benefits — including higher incomes, lower poverty, and a stronger middle class — will disappear with them.

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Amy Livingston is a freelance writer who can actually answer yes to the question, "And from that you make a living?" She has written about personal finance and shopping strategies for a variety of publications, including ConsumerSearch.com, ShopSmart.com, and the Dollar Stretcher newsletter. She also maintains a personal blog, Ecofrugal Living, on ways to save money and live green at the same time.

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