Labor Unions Don’t Appear to be Roaring Back – Except in this Industry Sector

After peaking in the 1970s, union membership across the American workforce at large began a long slow slide. The percentage of workers belonging to a union in the United States peaked in 1954 at almost 35% and the total number of union members peaked in 1979 at an estimated 21.0 million. Today, after a surprising uptick in 2020, the percentage of public sector union members in the American workforce reverted to around 14 million. So, what many interpreted as a reawakening of organized labor in America has not seemingly come to pass. Well, all except for within one sector of the economy where labor organizing is on fire.

Can you guess which industry is seeing robust and sustained growth in union organization? First, consider why unions have fallen out of favor since the middle of the twentieth century (politics notwithstanding). The San Francisco Chronicle says, “One of the most fundamental issues for union leaders and members is long-term job stability. Unions believe that companies have a duty to retain hard-working employees and fight layoffs and terminations.” So, there’s hint number one. What industry historically experiences very high turnover rates and is notorious for not being the model of career stability?

This next data point should be the clue that solves the riddle. According to the Bureau of Labor Statistics at the US Department of Labor, the fastest growing union in the US today is The Service Employee International Union. The BLS says, “The Service Employee International Union (SEIU) continues to defy the trend of record-low union membership in the United States. After doubling its membership from 1.2 million in 2000 to 2.2 million today, it is among the fastest growing unions in the country.”

Not surprisingly, it is in the service sector, particularly in food service, hotel and hospitality where we see the most reported difficulties in hiring new employees as the pandemic recedes. A big piece of the “Great Resignation” is driven by hospitality workers – typically public-facing, front line workers – who have come to a critical realization after thinking about things during the long lockdown. They’ve arrived, en masse, at the conclusion that they’re not willing to return to the long hours, notoriously low pay rates and high risk for infection that come with jobs in food service and hospitality. Hospitality workers are holding out for a more equitable shake when deciding whether or not to return to these difficult and historically under-compensated roles.

Momentum to organize among food service workers has been growing along with public support for unions which sits at the highest level in almost two decades. Nearly two-thirds of Americans say they approve of unionization according to a recent Gallup poll. Large hospitality companies like Starbucks Coffee, Anchor Brewing Company and other notable names have all experienced upticks in union organization activity.

This dovetails with the broader movement for a $15 per hour minimum wage and the recent protests among fast food workers in support of this goal. Large fast food chains (and many of their smaller independent counterparts) all complain that raising wages from the $7/hour range to $15 would be an undue burden. The global chains threaten to automate counter service. However, in the final analysis it seems unlikely consumers would prefer an automated experience to a live human interaction. So, there will inevitably need to be a new equilibrium between employers and employees in hospitality. Unionization of this particular workforce segment seems to be inevitable. This is why companies will continue to rely on nextSource to help navigate these market shifts as they occur. Contact us to learn more.

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