An Election With National Consequences
Few observers would have expected Alabama, a state with an 8% unionization rate and rigid right-to-work laws, to be the frontline in what has become one of the most pivotal labor battles in the last decade. Despite the low unionization rate and restrictive union laws, almost 6,000 workers at an Amazon fulfillment center in Bessemer are about to vote whether they want to unionize under the Retail, Wholesale, and Department Store Union.
The union election in Bessemer was thrust further into the national spotlight when Sen. Marco Rubio (R-FL) authored an op-ed supporting the effort. Rubio claimed Amazon had “waged a war against working class values,” used “anticompetitive strategies to crush small businesses” and banned “conservative books.” These behaviors, Rubio argued, justify “a more adversarial approach to labor relations” from workers.
While the union election only covers workers at the plant in Bessemer, the result will have far-reaching consequences for more than one million employees currently employed by Amazon across the country.
If Amazon workers in Bessemer vote for unionization, it could spell further unionization efforts nationally. There is a real concern that success in Bessemer “could set off a chain reaction across Amazon’s operations nationwide, with thousands more workers” pushing for unionization. The vote in Bessemer will undoubtedly have national repercussions that will affect employees and consumers.
Labor unions have often been labeled as dinosaurs, relics of the 1950s when the American economy was dominated by manufacturing and blue-collar work. At the height of union power, in 1954, labor unions represented 34.8% of wage and salary workers. By 2020, the Bureau of Labor Statistics (BLS) reported union membership had fallen to just 10.8% of the working population; that equated to about 14.3 million workers. According to BLS, Hawaii has the highest percentage of unionized workers, at 23%, while South Carolina had a unionization rate of just 2.3%.
One of the most profoundly damaging aspects of union representation is how they hamper job growth, particularly in the private sector. A plethora of studies have shown states with right-to-work protections and lower unionization rates experienced higher private-sector job creation rates. Studies have also routinely shown that as levels of unionization increase, job growth decreases.
This relationship was evidenced in more detail by NERA Economic Consulting, who showed states with right-to-work laws enjoy more robust job creation and lower unemployment than those with no right-to-work protections.
If unionization efforts in Bessemer succeed and other workplaces unionize, job creation will stall at a time when the country is experiencing high unemployment due to the coronavirus pandemic. The slower job growth would disproportionately hurt low-income workers, not only because they are more likely to be represented by a union but also because companies like Amazon tend to employ low-skilled workers and train them in-house.
This slower job creation is often caused by unionized workers being considerably more expensive than non-unionized workers. The BLS reported that unionized workers earn about $186 more each week when compared to non-unionized workers. While this may not seem like much, it can quickly add up for both small businesses and large corporations that employ thousands of workers operating on slim profit margins.
While unionized workers may earn more each week than their non-unionized co-workers, studies have shown their earnings growth is considerably slower. American Action Forum showed “union membership is negatively associated with average weekly earnings growth.” Across all business sizes, average weekly earnings growth was found to be -0.224%. The negative earnings growth means unions are actively depressing wages for workers.
Forced to pay more for labor and unable to absorb the costs, companies will be forced to pass on the additional costs to consumers in the form of higher prices for goods and services. The increase in prices will disproportionately hurt low-income consumers who have less disposable income to spend on goods and services.
While the unionization vote in Bessemer only concerns one Amazon fulfillment center in one state, the effects for American workers and consumers across the country could be catastrophic if it spurs further efforts nationwide. Not only will consumers be forced to pay more for goods and services, but the decline in jobs and depressed wages could also be profoundly harmful to low-skilled workers who depend on a consistent paycheck to make ends meet.
Edward Longe is a research associate at the American Consumer Institute, a nonprofit educational and research organization. For more information about the Institute, visit www.TheAmericanConsumer.org or follow us on Twitter @ConsumerPal.
