Last week, the U.S. Labor Department reported that the percentage of U.S. workers who were union members in 2012 had fallen to a 97-year low of 11.3 percent of the workforce. The total number of union members fell by 400,000 workers relative to 2011. In 2011, the unionization rate was 11.8 percent of the workforce.

The New York Times story of January 23, 2013 by Steven Greenhouse presents different perspectives as to why the unionization rate has fallen. One is by Glenn Spencer of the U.S. Chamber of Commerce, who not surprisingly, claims that the real problem with unions is that they aren’t really helping workers. Spencer says, “Unions have fundamentally a hard time conveying to workers what their value proposition is, how they’re really going to make workers lives better.”

The problem with the Chamber of Commerce view is that it is completely contradicted by the evidence, which is presented two paragraphs down in the same New York Times story. That is, the U.S. Labor Department estimates that, among full time workers, the average annual earnings of union members was $49,000, while that for comparable non-union workers was $38,600. That is, if you are a union member, you will be earning about 27 percent more than a non-union member doing a comparable job. That sounds like a very impressive “value proposition” for becoming a union member.

But that does then raise the question: why is the unionization rate falling when being a union member does convey significant benefits to workers? The short-term answer is straightforward: that business interests and Republican politicians have advanced a vicious campaign to destroy unions. As the Times story notes, union membership fell by 13 percent in Wisconsin and by 18 percent in Indiana last year. These declines are tied to the fact that Wisconsin passed a law in 2011 curbing the collective bargaining rights of many public employees, while Indiana enacted a right-to-work law, which enables workers to receive the benefits of union contracts without having to join the union. Michigan also became a right-to-work state in December 2012, sneaking through the legislation during an end-of-year lame duck session.

The longer-term decline in unionization has more than one explanation, as the post by Stephanie Luce on this site makes clear. Unions themselves are not above blame, at times being corrupt, hidebound, sexist, racist, and anti-immigrant. But we also need to keep in mind that unions have been up against very powerful forces—in particular, the emergence of neoliberalism as the dominant framework on which economic policies are shaped, both by Democratic policymakers and Republicans.

As I discuss in Back to Full Employment, the main features of neoliberalism include macroeconomic policies focused on maintaining low inflation rather than full employment; reducing the public sector, including welfare programs; eliminating barriers to international trade; deregulating financial markets; and eliminating or weakening pro-worker labor laws. We saw a good example of these priorities in action last Friday, when an appeals court overturned President Obama’s recess appointments to the National Labor Relations Board, thereby obstructing the capacity of the Board to function (as Rose Ann DeMoro describes well here). In short, neoliberalism is a policy framework designed to deliver benefits to Wall Street and global capitalists. Unions are attacked when they get in the way of this agenda. That has been the reality now since Ronald Reagan took office in 1981, and as one of his first acts in office, fired the U.S. air traffic controllers when they struck to win better working conditions.

The impact of neoliberalism has been severe, not just on unionization rates but on workers’ well-being more broadly. We can see this by considering the impact of globalization on workers, operating within this neoliberal policy framework. Here is an excerpt from Chapter 3 from Back to Full Employment:

In examining the effects of globalization on the viability of full employment policies in the United States…the most relevant concern is not the pattern of increasing economic interconnectedness between countries per se. It is rather the neoliberal policy framework that has defined the process of globalization for the past 35 years.

In the U.S. labor market, the neoliberal policy framework has exposed working people to increased competition from workers in poor countries—it has meant, effectively, an expansion of the reserve army of labor for the jobs done by U.S. workers, despite the fact that not all products on U.S. markets are imported from poor countries, nor are U.S. firms moving their operations offshore. The domestic U.S. economy remains a $15 trillion operation, employing 140 million people. But U.S. workers nevertheless face an increasingly credible threat that they can be supplanted by workers in poor countries willing to accept much lower wages. Employers can tell workers: “If you won’t accept a pay cut, we’ll move.” Or “If you want a union, fine. We’ll start buying what you make from China.”

The trend in average wages since the early 1970s suggests the seriousness of this problem. In 2011 the average non-supervisory worker in the United States earned $19.47 an hour (in 2011 dollars). This figure is 7 percent below the 1972 peak of $20.99 per hour (also in 2011 dollars). The long-term pattern for health and other benefits has broadly followed that for wages, so that total compensation for U.S. workers—including both wages and benefits—has stagnated for 40 years. But this is only half the story. While wages fell, average labor productivity in the United States rose by 111 percent. That is, the total basket of goods and services that average U.S. workers produced in 2011 is more than double what they could manage in 1972. Their reward has been 7 percent pay cut. Figure 1 portrays this movement for average wages and productivity vividly.

Unless our policy environment changes dramatically, the threat effects from neoliberal globalization are likely to only deepen. The first thing that needs to change is that we need to fight to defend the rights of workers to join unions and for unions to be able to function effectively as the chosen representatives of workers. Here is what I wrote in the conclusion of Back to Full Employment:

Business owners typically employ, as needed, lawyers, accountants, public-relations firms, security guards, and scab laborers to enhance their bargaining strength, in addition to the leverage created by the reserve army outside the office or factory door. Working people deserve some effective countervailing representation. In short, full employment and effective unions are complimentary means, along with decent minimum wage laws, for achieving rising working- and middle-class living standards.

One final point of full disclosure: I am very happy to acknowledge once again that this website has been created with both the financial and spiritual support of one of the most creative unions in the United States today, National Nurses United.