Labor Unions

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 12,200 labor unions in the US promote the interests of organized labor and union employees through collective bargaining. They rely on membership dues and investment income for revenue. Local chapters typically remit a percentage of dues to national organizations. Unions typically set aside a percentage of dues to support various funds. Most unions have a general fund to cover basic operating expenses. A strike fund assists members in the event of a strike. Other types of funds include communications, education, scholarship, and emergency operations.

Highly Regulated Operations

Labor unions are heavily regulated by numerous government organizations, including the Department of Labor (DOL) and the Federal Election Commission (FEC).

Resistance From Employers

Foreign competition and the ensuing pressure to reduce labor costs have strained relations between employers and unions.

Industry size & Structure

The average labor union operates out of a single location, employs 8-9 workers, and generates about $1 million annually.

    • The labor union industry consists of about 12,200 organizations that employ about 105,600 workers and generate about $16 billion annually.
    • The industry is concentrated; the ten largest unions account for over 90% of total union membership. The industry includes national and local chapters of unions.
    • Large unions include the National Education Association (NEA), Service Employees International Union (SEIU), the American Federation of State, County, and Municipal Employees (AFSCME), and the International Brotherhood of Teamsters (IBT).
                          Industry Forecast
                          Labor Unions Industry Growth
                          Source: Vertical IQ and Inforum

                          Recent Developments

                          Mar 19, 2024 - Weak Revenue Growth Expected
                          • Labor union industry revenue is forecast to grow at a 0.52% compounded annual rate from 2022 to 2027, slower than the growth of the overall economy, according to Inforum and the Interindustry Economic Research Fund, Inc. Labor unions generate revenue by charging dues to members. Industry labor costs decreased during 2023 as employment decreased slightly while average wages for nonsupervisory employees were unchanged, according to the US Bureau of Labor Statistics.
                          • The Federal Trade Commission (FTC) cited potential negative impacts for union workers in a statement regarding its opposition to grocer Kroger’s acquisition of rival chain Albertson’s. The FTC has filed a lawsuit to block the deal, which would be the largest supermarket merger in US history. “A combined Kroger/Albertsons ... would gain increased leverage over workers and their unions — to the detriment of workers,” the FTC alleged. "The combined Kroger and Albertsons would have more leverage to impose subpar terms on union grocery workers that slow improvements to wages, worsen benefits, and potentially degrade working conditions." Labor experts say that the FTC is making a unique antitrust argument by alleging the merger would specifically reduce competition between unionized grocery workers, thereby limiting the union’s negotiating power, according to Fast Company.
                          • Unions filed nearly 2,600 petitions for elections in the fiscal year that ended September 30, 2023, according to the National Labor Relations Board. That was a 3% increase from the previous year and a surge of nearly 60% since 2021. Unions won a near-record 76% of elections held, according to data from the board. Unions added fewer than 100,000 new members in fiscal 2023 despite the increase in election victories, and only about 6% of private-sector workers are represented by unions.
                          • The US labor union membership rate-- the percent of wage and salary workers who were members of unions -- decreased in 2022, according to the US Bureau of Labor Statistics. The union membership rate decreased from 10.3% in 2021 to 10.1% in 2022. The number of workers represented by unions increased by 200,000, but this was offset by a 5.3% increase in the total number of workers in the US workforce. While about 10% of US workers belong to a union, 68% of Americans approve of unions, according to Gallup polling results. That's a level of support not seen since 1965. The increase in positive perception may have boosted unionization efforts. There were 1,249 union elections in fiscal year 2022 (Oct. 1, 2021, through Sept. 30, 2022), a nearly 50% increase from the year before, according to the National Labor Relations Board. Workers voted in favor of unionizing in 72% of those elections, up from 61% in 2021.
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