The Decline of Unionization in the United States: What Can Be Learned from Recent Experience?

The dramatic decline in unionization over the last decade is investigated in the context of a supply/demand model of union status determination. Data from surveys conducted in 1977 and 1984 are used to decompose the decline into components due to a drop in the demand for union representation and a drop in the supply of union jobs relative to demand. It is found that there has been a substantial drop in demand that can be accounted for by an increase in the job satisfaction of nonunion workers and a decrease in nonunion workers' beliefs that unions improve wages and working conditions. It is also found that there has been a substantial drop in the supply of union jobs relative to demand that is attributed to an increase in employer resistance to unionization. Increased foreign and increased nonunion domestic competition (particularly in deregulated industries) are cited as the likely key underlying causes of these changes. * This study was prepared for a festschrift in honor of Albert Rees, and the research was supported by the National Science Foundation. Useful comments were received from participants in the weekly labor economics meeting at M.I.T. and a workshop at the University of Michigan. Address Correspondence to: Henry S. Farber Department of Economics E52-252f Massachusetts Institute of Technology Cambridge, MA 02139