Increased challenges in collective bargaining over recent years have more often than not given employers the upper hand in negotiations over benefits. Now, with declining enrollment and service jobs replacing traditional unionized manufacturing jobs, unions are struggling to maintain relevance.

Unions have been shrinking in a downward spiral for the past half century.
“The fraction of workers whose wages are covered by collective bargaining agreements has fallen significantly over the past 30 years, especially in the private sector,” said Economics Prof. John Pencavel.

Globalization and an increase in imports have reduced the clout of unions and American workers by increasing competition and giving employers more leverage than ever.

“The fundamental reason [for the decline in union membership] is that it is difficult for unions to survive in the long-run in a competitive economy,” Pencavel said. “Unions raise costs by raising wages over what they would otherwise be. In a world where you are in competition with non-union firms, you will not grow as fast as your competitors.”

Car makers were able to make substantial gains by employing fewer people with technical innovation.

“Foreign competition has wiped out most manufacturing in the United States,” Gould said. “The nature of the employment relationship has changed.”