Two of the most commonly cited reasons for the lack of more liberal policymaking in the United States are the decline in unions and the rising class bias in voter turnout. In the 2014 midterm congressional elections, the Democrats’ rout was largely attributed to a failure of their coalition to turn out at the polls. What is rarely examined, however, is the relationship between a decline in voter turnout and the dwindling number of union members. And as that turnout has declined, the control of the financial class over the entire political system—Republican and Democrat—has taken hold.
Over the last several decades, union membership in the United States has declined precipitously, from 24 percent of all wage and salary workers in 1973 to 11.1 percent today. At the same time, our economy has increasingly begun to favor the wealthiest members of society. The labor share of income has reached the lowest level it’s been since 1929, and that diminished income is distributed incredibly unequally (see chart). According to data from Thomas Piketty and Emmanuel Saez, the richest 1 percent of Americans now take home the same share of wage income as the bottom 50 percent.
The decline in unionization is due to several factors but research suggests that politics played the most important role. David Jacobs and Lindsey Myers, sociologists at Ohio State University, find that “reductions in union strength attributable to policies endorsed by Reagan and by later neoliberal administrations helped create the acceleration in inequality after 1981.” Laws like so-called “right to work” legislation and Supreme Court rulings such as 2014’s Harris v. Quinn have gutted union protections. The impact of this decline on widening inequality is clear, but the reason for this connection is not often clearly sketched. While conventional wisdom holds that unions bolstered wages through collective bargaining, new evidence suggests that unions played an equally important role as the “organizing centers of the working class.”
The empirical research on the impact of unions on inequality is clear. As the Economic Policy Institute (EPI) recently showed, there is a clear correlation between the decline in union membership and Gini coefficients (a standard measure of inequality ranging from 1, absolute inequality and 0, absolute equality) at the state level in the United States. In a 2012 study published in The American Sociological Review, Thomas Volscho and Nathan Kelly find that “the rise of the super-rich is the result of rightward-shifts in Congress, the decline of labor unions, lower tax rates on high incomes, increased trade openness, and asset bubbles in stock and real estate markets.” However, their model shows that of these variables, union membership is the most significant factor (see chart).
Their view comports well with international research: Vincent Mahler, a political scientist, finds that internationally, voter turnout and union strength are stronger predictors of income redistribution than the strength of liberal parties. Jacobs and Myers find that union decline is a more important driver of inequality than either Republican strength in Congress or college education rates. In an often-cited study, Bruce Western and Jake Rosenfeld find that “the decline of organized labor explains a fifth to a third of the growth in inequality.” Internationally, there is a strong correlation between a decline in union coverage and wage inequality. A 2003 study finds, “de-unionization explains a substantial part of the growth in male wage inequality in the U.K. and the U.S. since the early 1980s.” Economist Richard B. Freeman finds that the decline in union density explains 40-50 percent of the rise in the wage gap between blue-collar workers and white-collar managers during the 1980s. Much of the increase in inequality can be explained by the attendant drop in collective bargaining, which often benefited non-union workers.
However, it is increasingly clear that the political impact of unions was equally important to their success in halting inequality through wage negotiation. Union members are more politically active than non-union members. Over the period for which American National Election Studies (ANES) data are available, the average gap between union and non-union household voter turnout is 5.7 percentage points. A study of union members (rather than someone living in a union household) finds that that they are 12 points more likely to vote. Union members are more economically liberal, prefer Democratic candidates, and are more likely to support a robust role for the federal government in the economy.
Voter turnout is incredibly important, particularly since union members tend to be economically liberal. A large body of research shows that higher voter turnout, particularly of low- and moderate-income people, leads to more economically liberal policymaking. As the class bias in the electorate has increased, candidates of both parties have shifted to the right. A recent study finds that states with higher levels of class bias have higher levels of economic inequality. As unions have declined, so has working-class political mobilization. Jan Leighley and Jonathan Nagler find that “the decline in union membership since 1964 has affected the aggregate turnout of both low- and middle-income individuals more than the aggregate turnout of high-income individuals.” Using a cross-country comparison across 32 nations, political scientists Patrick Flavin and Benjamin Radcliff find that unions boost voter turnout, not only for union members, but for non-union members as well. Vincent Mahler ran a unique analysis for this piece and finds that union density is strongly correlated with voter turnout for the period of 1960-2012 (see chart).
In a political system where special interests dominate, labor unions were a key bulwark against the political power of the wealthy elite. As political scientist Martin Gilens has documented in Affluence and Influence, unions comprise the only interest group that consistently advocates policies that are aligned with the needs of the middle class. In his book, he measured how closely the positions taken by corporate lobbying groups, corporations, unions, and other lobbying groups aligned with the preferences of the poor, middle class, and the affluent. As the scatter plot below shows, unions align strongly with the preferences of most Americans (all are in the upper right-hand quadrant), while corporations support policies misaligned with most Americans (clustered in the lower-left quadrant).
Gilens writes, “unions would appear to be among the most promising interest group bases for strengthening the policy influence of America’s poor and middle class.” However, unions are hobbled politically, both from a huge disparity in available funds, and stricter rules for political spending. As unions’ influence has waned, the middle class has lost an important lobbying group to advance their interests.
In a new study of the rise of finance, Christopher Witko points to the decline of unions as a key variable:
On average, union strength and Democratic control of government are associated with slower financialization. But the analysis also showed that as the Democratic Party coalition began to include more professionals and managers, and as unions declined, the negative relationship between Democratic control of government and financialization weakened.
The financial sector has been the most important contributor to inequality, with one recent study finding that “financialization accounts for more than half of the decline in labor’s share of income.” The battle over the past 30 years has pitted capital, in the form of finance, against labor, defended by unions. The latter has lost, most clearly in the United States, but internationally as well. It is not enough to see unions only as collective bargaining agents that boost wages and provide benefits. Rather, unions should primarily be seen as political actors, shaping the income distribution both at the market and government level. Without labor unions, the left will struggle to mobilize and the Democratic Party will increasingly serve the interests of a more conservative elite.
The decline of labor unions has shifted the balance of power not only in the country at large, but within the Democratic Party. This shift not only calls into question the ability of the Democratic Party to serve the interests of the working class; it will deeply hamper its ability to tackle inequality. A recent survey of the wealthiest 1 percent finds that rich people who identify as Democratic tend to be more economically conservative than Democrats as a whole. The current Democratic frontrunner, Hillary Clinton, has raised millions from the financial sector. Given that the financialization of the economy is primarily responsible for inequality, it is next to impossible for a neoliberal Democratic Party to address the problem. In the conflict between capital and labor, the decline of unions means that both major American political parties are firmly entrenched on the side of capital.