Is organized labor obsolete?

Many theories explain this collapse: greater management pushback and intimidation; business expansion in anti-union regions, the South and West; more white-collar office workers and fewer blue-collar factory workers. All these theories contain some truth, but unions’ downfall mainly reflected their inability to adapt to change…

Imports and “transplant” factories created new competition in steel and autos. Airlines, trucking and communications (telephones) were deregulated, allowing new low-cost rivals into the market. Digital technology and the Internet transformed communications and threatened many industries, including traditional phone companies and newspapers.

For unions, this pitted present members’ expectations – for high wages, generous fringe benefits – against companies’ needs to lower costs and, thereby, protect future jobs. By and large, union concessions were too little, too late. Corporate managers, their business models besieged, were also slow. Both executives and union leaders underestimated the vulnerability of once impregnable market positions. The downfall of the “Big Three” automakers epitomized this disastrous cycle. Nonunion firms gained market share; union membership fell. Unions also had a harder time organizing other companies, because both managers and workers feared job loss.