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State of the Union

Labor unions have a long and proud heritage in Ninth District states. This issue's cover stories look at that legacy and the changes that have occurred over time

May 1, 2001


Douglas Clement Senior Writer

I see no reason to believe that American trade unionism will so revolutionize itself ... as to become in the next decade a more potent social influence. ... Trade unionism is likely to be a declining influence in determining conditions of labor.

It was in December 1932 that George Barnett, president of the American Economic Association, delivered this death notice to American labor in his AEA presidential address. But just six months later, an unprecedented wave of labor unrest swept through the country, and the following years saw a threefold increase in union participation rates, unionization of most of the industrial sector and the birth of the Congress of Industrial Organizations, the country's most powerful labor organization to date.

Barnett's was the kind of failed prediction that brings humility to economists and, by the same token, brings consolation to union leaders, who use the anecdote to remind observers that rumors of their death have often been greatly exaggerated. "The prophets of doom have often badly misread both the present strength and future prospects of trade unionism in America," said Lane Kirkland, AFL-CIO president, in 1980.

These days, unions are again hoping that forecasts of their demise are inaccurate. Their numbers are at the lowest point in six decades, with just 13.5 percent of American workers carrying a union card, continued steep declines in membership rates and labor economists like Leo Troy at Rutgers University titling his latest book, "The Twilight of Organized Labor."

The situation is similar in the Ninth District, where labor union membership rates have been declining since the 1950s. Given the proud labor heritage of district states—from Anaconda mineworker battles in Montana in the early 1900s, to the 1944 formation of the Democratic-Farmer-Labor Party in Minnesota, to the longest strike in American history (1954 to 1965) in Kohler, Wis.—it seems almost sacrilege to suggest that labor unions could soon be no more than history. But while our newspapers carry daily headlines of airline strikes and union drives, and though many local politicians continue to seek labor's endorsement, there is little question that organized labor in the Upper Midwest is a weaker force—socially, politically and economically—than it has been in decades.

What accounts for the decline of organized labor? What are the economics of trade unions? Are there potential growth areas in coming years? What, if anything, can labor unions offer to American workers to ensure that current predictions of their demise will be as ill-founded as Barnett's?


Douglas Clement
Senior Writer

Douglas Clement was a managing editor at the Minneapolis Fed, where he wrote about research conducted by economists and other scholars associated with the Minneapolis Fed and interviewed prominent economists.