The Dramatic Rise And Fall Of labour Unions In One Chart

Unions American Workers

Photo: Mark WIlson / Getty

Unions membership is declining to levels of the early 1900’s and will probably continue to fade out.As technology replaced unskilled workers, standards for manufacturing employees became higher, making it too expensive to unionize, according to a study by¬†Emin M. Dinlersoz at the U.S. Census Bureau and Jeremy Greenwood at the University of Pennsylvania.

Unskilled labour is homogenous, almost by definition. This makes it easier to unionize than skilled labour. When the demand for unskilled labour rises there is a larger payoff to unionizing it.

The authors cite rise of auto manufacturing in the 1940’s, when it took only a few minutes to train someone to do their assembly line job. Then, things started to change in the 1950’s:

The second industrial revolution was petering out and the information age was dawning. Transistors and silicon chips meant that automatons could replace the hoards of unskilled workers laboring on factory and office floors. This represented a reversal of the earlier trend.

Here’s a chart showing union membership for both sets of data studied by the authors:

union membership

Photo: nber.org

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