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In the late 20th century, a major challenge to the American labor movement was the declining size of the American industrial base, particularly traditional industries such as steel and heavy machinery. In some instances, lower labor costs have helped foreign companies in such fields as automobiles and electronics to gain larger shares of the American market. Many large U.S. factories have closed, and large numbers of union members have lost their jobs.
Automation is a continuing challenge. Many older factories have been introducing automatic machinery to perform tasks previously done by workers. This is done mainly to increase productivity, in response to the challenge of foreign competition. But in some cases it has meant the elimination of jobs. In response, unions have sought a variety of measures to protect jobs and incomes, including free retraining and shorter work-weeks to share the available work among employees. Nevertheless, the shrinking of the traditional American industrial base was a powerful blow from which the labor movement has yet fully to recover.
At the same time, the percentage of workers who belong to unions has also declined. Although more than one-third of employed people were members of unions in 1945, only about 16 percent were in the late 1980s. Economists, labor leaders, and others have offered several explanations for this. Some say it reflects the trend in American society away from manufacturing industries, which have traditionally been union strongholds, toward service industries, where union organization has been weaker. Others point out that women, young people and part-time workers comprise an unusually large proportion of the employment increases of recent years. Still others note that much American industry has migrated to the southern and western parts of the United States, regions that have a weaker union tradition than does the North or the East.
A major criticism of the labor movement has been that its traditional demand for higher wages and better working conditions -- even during periods of inflation -- adds to still further inflation, and damages productivity in American industry. In the recession of the early 1980s, however, there were increasing examples of union willingness to forgo wage increases in favor of employment security and enhanced company competitiveness. In addition, labor proponents argue that most recent increases in wages are designed just to keep up with the cost of living, not to make substantial gains in real standards.
Labor-management disputes have also focused on the question: what special benefits are workers entitled to receive? Issues related to retirement benefits, disability pay and medical insurance, as well as recent demands by some very large unions for lifetime job security, are very much in the bargaining forefront in the latter part of the 20th century. Emerging benefit issues included questions about maternity and paternity leave, and child care.
For their part, employers have not seen fit to sit back and let labor have its own way. Management wants increased productivity from its workers and has shown a willingness to fight against rules or benefits that it believes are detrimental to this end.
The trade union movement is an important component of the U.S. economy because it represents the interests and needs of workers to managers and the government. Although unions have given primary importance to negotiations with management for higher wages, economists disagree on whether or not unions have significantly affected workers' wages -- with most pointing to increased productivity as the major factor in salary increases. But most analysts also agree that unions exert influence disproportionate to their size on such matters as job safety, procedures for handling grievances and monitoring other working conditions. Through a union, a worker can gain a voice in almost all aspects of his or her job. In addition, some experts argue that unions have performed valuable social and psychological functions, serving as fraternal organizations and, perhaps more importantly, providing a source of pride and a sense of dignity to workers.