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.
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Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 12,900 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 workers, and generates about $1 million annually.
- The labor union industry consists of about 12,900 organizations that employ about 104,600 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
Recent Developments
Mar 3, 2023 - Service Sector Unionization Proves Difficult
- Labor union advocates were encouraged when the labor movement gained traction among service sector employees in 2022, but some experts say that the prospects for unionization in the sector are poor. Columbia University economist Suresh Naidu said that outdated labor laws, which put the impetus on workers at individual businesses to collectively organize their specific workplace, are a key hindrance. Labor laws were effective when hundreds of employees worked side by side at large manufacturing plants, each working for the same employer for long segments of their careers. Today's service sector differs in that turnover is much higher, which may weaken worker solidarity and reduce the incentive to fight for a better working environment at a particular establishment. Service sector workplaces tend to be much smaller, which increases the logistical difficulty and transaction costs for unions to organize workplaces because they have to be organized one by one.
- 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.
- Analysts are debating whether 2022 marked a long-term rejuvenation of labor unions or merely a temporary, pandemic-driven burst of support. More than 2,500 union representation petitions were filed with the National Labor Relations Board during the 12-month period ended September 30, 2022 — a 53% increase from the prior year and the most since 2016. Not all petitions have met with success, however. Workers at an Amazon warehouse in Staten Island, NY, voted to unionize in April 2022, for example, but workers at another of the E-commerce giant’s facilities in Staten Island voted against being represented by the Amazon Labor Union a month later. Amazon workers near Albany, NY, overwhelmingly rejected the union in October. Some experts argue that leverage provided to workers by pandemic-related supply chain disruptions and by labor and product shortages is becoming less effective as high consumer demand slips and the probability of a recession seemingly increases.
- The US Supreme Court will consider the question of whether there’s an exception to federal labor law preemption of state lawsuits if the employer makes common-law allegations of intentional destruction of property during a labor dispute. The case has the potential to reduce unions’ use of strikes as a bargaining strategy and tilt the balance of power in labor-management relations toward businesses, according to Bloomberg Law. Such an exception could trigger costly employer lawsuits against striking unions based on the economic consequences of their protests and spark legislation in conservative-leaning states to restrict union conduct during strikes. “Functionally, strikes provide bargaining power, offsetting the inherent differences in power between workers and employers,” said Julie Gutman Dickinson, a union-side attorney with Bush Gottlieb ALC and former National Labor Relations Board lawyer. “Any curtailment of that right threatens to weaken the very basis of labor law.”
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