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 12,900 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
                          Source: Vertical IQ and Inforum

                          Recent Developments

                          Nov 13, 2022 - Federal Labor Board Proposes Reversal Of Union Election Rule
                          • The US National Labor Relations Board (NLRB) proposed rolling back a rule that makes it easier for workers to dissolve their unions. The 2020 rule, which was heavily criticized by unions, forced workers to vote in elections to certify or dissolve unions even after they had been subjected to illegal labor practices. It also barred NLRB staff from temporarily blocking elections while a related case alleging illegal labor practices was being litigated. The NLRB argues that it could interfere with the right of employees to make free, informed decisions on union representation.
                          • 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.”
                          • Gallup poll results published in early September showed that 71% of Americans approve of labor unions, the highest Gallup has recorded since 1965. The results come amid high-profile union victories, with workers at companies such as Amazon, Starbucks, REI, and others successfully launching unionization efforts since the beginning of the pandemic. Support for unions was at its highest in the 1950s and then dipped below the 50% mark by 2009, according to BuzzFeed News. Support has grown steadily over the past 13 years.
                          • Unions are pushing to increase their memberships as companies struggle with labor shortages and supply chain bottlenecks due to the pandemic, according to The Wall Street Journal. Some union leaders say that many workers who put their health at risk to do front-line jobs are feeling overworked and underappreciated. Worker dissatisfaction comes at a time when employers are having trouble attracting and keeping employees. There were five unemployed persons for every job opening early in the pandemic. By November 2021, there were 0.7 unemployed persons for each job opening. Some unions, including the Service Employees International Union, the Teamsters, and the International Alliance of Theatrical Stage Employees, have reported increased worker interest in unionizing as a means to better compensation, benefits, and working conditions. Gallup estimates that about 68% of all Americans approved of labor unions in 2021, the highest percentage since 71% in 1965.
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