Impact of Organized Labor

Update 766 – Impact of Organized Labor 
On Wages, Conditions, Markets, Politics

For several years now, we have seen a labor market so “tight” that job opportunities have outnumbered workers available to fill them, with big gains in wages as demand outstrips supply.  Within that market is organized labor, which has seen, or led, much of the progress. 2023 was a banner year, with worker power seen in strikes and results.

Meanwhile, while the AFL-CIO and individual unions are overwhelmingly supportive of President Biden, polls show the working class in the U.S. is politically divided — with the majority of working people supporting President Biden but a substantial minority favoring his opponent. Unions could well campaign for President Biden with an intensity not seen since 2008. That said, union membership as a percentage of working Americans is at a 60-year low. In this election year, what is the state and influence of organized labor?



Since the Industrial Revolution, organized labor has played an important role in ensuring a middle-class standard of living for millions of working-class Americans. After receiving a boost in political support during the New Deal, unions reached their height in the 1950s, when over one-third of American workers were union members. Unions were crucial in advancing workers’ rights and increasing the standard of living in America, and its signature accomplishments – the five-day work week, the banning of child labor, and workplace safety rules – are now taken for granted. Since the 1960s, public-sector union membership has surged amid a long decline in private-sector union membership. While the absolute number of union members has been stable, the percentage of workers who belong to a union has declined dramatically to around 10 percent. 

But even as unions diminish in prominence, they continue to play a crucial role in advocating for the rights and dignity of American workers, impacting workers far beyond membership. Today, unions are among the most popular institutions in American life, enjoying overall approval ratings of around 70 percent, and close to 90 percent among young people. By comparison, approval ratings of American business and American political institutions are well below 50 percent.

While unions had a banner year in 2023 in terms of reasserting their bargaining power, the question is now whether they will continue their revival in 2024 in light of political challenges, support from the Biden administration, and opposition from corporations. Below, we dive into the current state of organized labor in America, its continued impact on the working class and beyond, and the role that unions play in politics leading into the 2024 election.

The Organized Labor Movement: Surging or In Decline?

Unions have scored several notable victories over the past few years; aided by a tight labor market: the unemployment rate has remained below four percent for two years, the longest such streak since the 1960s, and job openings (8.9 million) continue to exceed the number of unemployed people (6.5 million). Fed Chair Jerome Powell has cited this tightness as he seeks a supply/demand balance in the labor market in the fight against inflation, stating recently that the Fed will not need to see the labor market tighten further before cutting interest rates. These labor market conditions are giving workers more leverage to negotiate with their employers. In particular, 2023 saw unions either strike or threaten to strike, resulting in 4.5 million days of idleness –- a measurement of how many days individual workers refused to work — in October alone due to work stoppages, the most in four decades. 

Some of the most noteworthy victories for unions last year include:

  • The United Auto Workers (UAW), representing 145,000 workers at General Motors, Ford, and Stellantis, secured a 25 percent base pay increase over four years, along with the reinstatement of cost-of-living raises and improved retirement benefits among other gains.
  • The Screen Actors Guild, representing 140,000 workers, secured a contract that would raise wages by 11.28 percent in the first year and 3.5 percent in the second year, along with new rules for the use of actors’ voices and likenesses via generative AI.
  • The Writers Guild of America, representing 11,500 workers, secured a series of increases in pay minimums from studios, along with a minimum number of writers per show and a guarantee that writers will not lose out on writing credits or compensation when AI is used to assist in creating scripts.
  • The International Brotherhood of Teamsters, representing workers at UPS, secured a new part-time wage of $21 an hour, a raise of $7.50 an hour over five years for existing UPS workers, and other concessions through the threat of a strike that was never carried out.
  • Workers United continued its efforts to unionize Starbucks that began in 2021, with workers voting to unionize at more than 370 company-owned Starbucks stores in the US. Starbucks and Workers United agreed to begin talks at the end of last month.

Union leaders seek to continue their winning streak in 2024. The United Steelworkers (USW) has built up opposition to Nippon Steel’s prospective buyout of US Steel, a deal that the USW insists would be detrimental to the tens of thousands of American employees at US Steel. In part thanks to USW’s efforts, both President Biden and Donald Trump have opposed the deal, along with several U.S. Senators. Additionally, the UAW has decided to build on its successes by making a bid to organize 13 non-unionized automakers in the US, including a Volkswagen (VW) Plant in Chattanooga, Tennessee that it had tried to unionize twice before in the 2010s. The UAW has filed for an NLRB election at VW with a supermajority of workers signing cards; the election has been scheduled for mid-April.

An important aspect of organized labor’s recent winning streak has been its success in the court of public opinion. Based on numerous recent polls, unions are regaining public support that was lost during the aftermath of the Great Recession. According to Gallup, Americans’ approval for labor unions in 2023 stood at 67 percent, down slightly from 2022 but up considerably from its low point of 48 percent in 2009:

Shifts in Public Approval of Labor Unions

Source: Gallup

Another poll in 2024 showed that a 54 percent majority of Americans saw the decline of union membership as bad for the country, while 59 percent thought it was bad for working people. Crucially, in 2022, 59 percent of all US adults said they would support the unionization of their own workplaces. This spike in support for organized labor is due to multiple factors. The overall improvement in the economy makes Americans less nervous about the effects of union overreach on job growth and an increase in income inequality is making Americans more favorable toward organizations seeking to make the economy fairer.

Despite recent union victories, reports on union membership suggest that organized labor is having challenges translating public support into actual membership growth. While labor unions added 139,000 members in 2023, increasing to a total of 14.4 million union workers, unionized workers as a percentage of all US workers fell from 10.1 percent to 10 percent, the lowest in Labor Department records dating back to 1983. The number of new union members declined from 2022 when union membership rose by 200,000 as nonunion workplaces grew faster than unionized workplaces. Although unions have been active in their organizing efforts but are still having difficulty organizing in the service sector – which is growing quickly – compared to traditional strongholds like manufacturing – which is seeing considerably less workforce growth.

The Impact of Organized Labor

One of the biggest selling points for organized labor is that unionized workers earn more than their nonunion counterparts. While the exact size of this “union wage premium” is debatable, studies have shown that unionization increases the wages of its members by 10 to 15 percent, with a more pronounced effect for longer-tenured workers. This impact is not restricted to union members, either. Empirical evidence suggests that each 1 percentage point increase in private-sector union membership rates translates to a 0.3 percent increase in nonunion wages as nonunionized firms raise their own wages to remain competitive. This effect is more pronounced among workers without a college degree, which is especially important as 62 percent of Americans lack a college education. Across the board, organized labor plays an important role in guaranteeing wage growth for millions of Americans.

Organized labor benefits Americans beyond just wage growth, especially when those Americans are working class. Union members have considerably greater access to a wide range of job benefits than nonunion workers, including retirement benefits, medical benefits, and childcare:

The Proportion of Workers with Benefits, Union vs. Non-Union

Source: US Department of the Treasury

Notably, union membership significantly increases access to benefits for marginalized groups such as women and Black workers, especially when said workers lack a college degree. Women and Black union workers have higher wages and are substantially more likely to have access to health insurance and retirement benefits than their nonunion counterparts.

Source: Center for American Progress

Organized labor has also played a key role in the past in reducing income inequality. Beginning in the 1970s, income inequality steadily began to rise as union membership declined. With the combined increases in wages, benefits, and job security provided by unions, union membership is associated with a drastic increase in median household wealth, with union working-class households having a median of $201,240 in wealth compared to $52,221 for nonunion households. If lawmakers want to take action on economic inequality, supporting unions would be a great place to start.

Unions and Politics

Unions have long been a core fixture of the Democratic Party’s base and union leaders seem keen on continuing to support the Party in the 2024 election. So far, the AFL-CIO, representing 54 national unions, has endorsed Joe Biden and Kamala Harris. AFL-CIO affiliates, the USW, the UAW, the United Food and Commercial Workers (UFCW), and the non-affiliated Service Employees International Union (SEIU) have all endorsed President Biden for a second term in office. The Teamsters have not yet made their endorsement, though it is worth noting that they endorsed Biden in 2020. 

Biden has made supporting unions a key part of his overture to working-class voters, including by becoming the first sitting president to visit a picket line during the UAW strike. Biden’s investment agenda (the ARP, the IRA, the Bipartisan Infrastructure Act, and the CHIPS Act) has had a focus on workers’ rights and creating union jobs not seen in American public policy since WWII. Union leaders are acutely aware that they have a friend and ally in President Biden, and are likely to mount a political effort of unparalleled intensity in support of his reelection

That said, the political leanings of individual union workers paint a less rosy picture for President Biden. According to polls, while union households still support Biden over Trump by a sizable margin, that margin is narrower than it was during the 2020 presidential election. Crucially, among union voters in six swing states, polls show that Biden and Trump are tied. Many union voters, disillusioned with the neoliberal approach taken by both parties before Trump, find the economic security that Trump has promised appealing. With that said, it is not unusual for union member preferences to shift significantly toward the union-endorsed candidate between the spring and fall of an election year.

Labor unions have suffered from a decades-long decline, but are now energized in a way that has not happened since the 1970s, or perhaps since the 1930s. Yet, as we approach the 2024 elections, it is unclear whether the 58 percent of workers who want to organize will be able to in a hostile policy environment. A lot hangs on this question. Organized labor is essential for protecting the rights and standards of living for the American working class. Even as major corporations fight to prevent their employees from organizing, unions are fighting to secure wage gains and other benefits for their workers, with many of those benefits spreading beyond union members themselves. 

Despite the challenges they face, unions are likely to continue their recent resurgence and use their political power to push back against decades of erosion of workers’ rights. Unions are adept at turning out their members to vote, making them a potent political force that should not be underestimated as the 2024 election approaches. If lawmakers want to ensure that the interests of working-class Americans are protected, they should do more to protect the rights of workers to organize instead of undermining them through legislation such as right-to-work laws. In the meantime, unions will continue to fight to ensure their voices are heard.