Generation demographics, not pandemic, reason for renewed interest in labor unions
Gallup survey indicates labor union favorability reached highest level since 1965. Gallup finds “the low unemployment rate that developed during the pandemic altered the balance of power between employers and employees.” Dr. Paul Isely, Associate Dean in the Seidman College of Business at Grand Valley State University disagrees with that conclusion.
ISELY: “It certainly sees a real big increase in desire to unionize and a lot of that has to do with the increase of power that labor has. Labor's power has increased because there are fewer workers available for the jobs available.
So as their power goes up, as labor's power increases, it then facilitates the concepts surrounding unionization and asking for more quality of life improvements.
PC: It's the type of job. The type of industry and also a demo. A demographic that's involved in this shift.
ISELY: There's two things that we know. We know that the jobs that benefit the most from unionization and many, many studies have backed us up, are those that are low to semi-skilled. Okay. So, these are jobs that are on the lower end of the skill spectrum. And the reason that they get a lot of bump in it is because they're lower skilled jobs it's easier for people to transition into those jobs if the wage starts to go up. So therefore, keeps the chop down the wage down.
The vast majority of people filling these types of jobs. Not all but a big chunk of the people filling these types of jobs are young people. So, what we see here is a demographic here over the course of the last
10 years where the millennials have now started to age out of the young workforce and the Gen Z folks are coming in as the young workers. So, we're seeing a drop in the number of young workers. It’s one of the reasons why you now need to scan your QR code to get your to get your menu when you go out to eat because there's not enough workers to do all the jobs.
CENTER: There's something striking about all of this because it wasn't that long ago we had plenty of workers.
ISELY: Yes. So, think about this. A lot of that had to do with the millennials. So, we blame them for everything else, we can blame for this, too. What we see is that millennial group were people born before 1995 okay. After 1980-82, depending on which version you look at, those people increased the labor force as we went through the early 2,000s. So, those people are entering the labor force in the early 2,000s through about 2012, 2013, 2014. So, we had this big pile of people coming in as the Baby Boom echoed, the millennials, and they increase the number of people coming in. But as soon as that dropped off and we had the Generation X echo, the Gen Z, we had fewer kids, from fewer people, and that resulted in a lot fewer young people. And we immediately saw the wages start to jump up. So, this is not a COVID thing. This is not a Ukraine thing. This is just demographics that we've known for 10 years were going to lead to more unionization and higher wages for low income workers as we went through the 2020's.
CENTER: You talk about generations here. So, take us back, really the 1950's right, when we begin to see these trends because you just mentioned that it really has nothing to do with the pandemic.
ISELY: You know, the pandemic sped this up a little bit, but it's still the exact things we've been telling people since the you know, for the last 10 years would be happening now. So, if you go back in time, you can actually see that Baby Boom generation start to come up.
And as they started to accelerate in, that started to affect the wages that we started to see and that's why we start to see things adjust as we went into the 1980's. Now, what was interesting was the U.S. economy was also growing very fast during that time frame. And so, because the economy was growing so fast it was able to eat up those workers that were coming in and make them part of the labor force.
All right. If we look more recently the labor force has been growing relatively slow compared to the economy as a whole. And so, there's more and more things being built with fewer and fewer people and that's starting to get that starting to be a drag on how fast we can grow. And it also means that that the values started shifting to
technology and owners of capital. And it's part of the reason why we see that wealthy really start to take off in the 1990's. So, what's really scary about this is these are really long-term demographic trends that you can see for a long period of time. But a lot of people were like ostriches and stuck their head in the sand and said, ‘no, it's because I'm really good politically or I’m a really smart business person or
the right policies are being put in place.’ And in reality, a lot of this has to do with the demographics that are underlying everything that everybody was doing.
CENTER: There's a shift then also in wealth and how we’re paying this younger demographic. This services workforce, if you want to put it that way, the shift comes from where? Is it the middle classes? Is it the upper class? Where does the money then transfer?
ISELY: So, what we're seeing realistically is a transfer of wealth from people in that 50 to 80-90 percentile of income to the people in the bottom 50%. The top 10% really aren't affected by this because
they're not earning wages. But what we're seeing is that as that number of people who are available for these lower skilled, or semi skill jobs, decreases proportional to the size of the economy that their wages are going up faster than people who are higher in the income stream. In fact, twice as fast right now. That's resulting in a in a shift of wealth. So, as we look at wealth over the last few decades, what we saw was in the 1990s, the bottom 50% held about 4% of the wealth. And that started to drop during the 2,000s. And it would drop during 2000s partly because we had the wages being driven down by this bulk of young people trying to find jobs. It bottomed out around 2010 at about .4, .5%, depending on which measure you use. Since that time it's been increasing and right now it's about 3% of the total.
So, we're almost back to where we were in the 1990's. That's a good thing. We needed to get rid of some of this disparity. But that shift is mostly coming out of the people in the middle because they're being affected by the types of prices that are increasing. They're being affected by the types of taxes that are being levied and they're being affected by the fact that their wages aren’t increasing as fast as the people on the bottom.
CENTER: Why unions now? Are there abuses in the workplace?
Are wages not as high as they should be? Normally, you plant your flag somewhere. Why this generation? Why now?
ISELY: Well, think about it. We don't have enough workers. So, what happens if you're trying to make the same amount of stuff with fewer workers. They have to work really, really hard and really, really fast and do a lot of different things. So, not only do we have not enough workers, but each of those workers we’re asking to do a lot more.
And that's creating stress. That's creating quality of life decreases.
And now, with the pandemic and with the fact the demographics have moved as far as they have over the last 10 years, workers are understanding that they can ask for more than that. One of the ways you do that, or can do that, is through collective bargaining.
And so therefore by unionizing, you can say, ‘hey, I can't do that workload. Hey, I can't do that type of scheduling. Hey, I need to have vacation. Hey, I need a larger wage. Hey, that's not a safe way to do things.’ And I can now do that because number one; I'm just worn out from working too hard. And so, I need to do something. And number two; I discovered that I have more power because there's not enough workers to replace me.
CENTER: Doctor Paul Isely Associate Dean in the Seidman College of Business at Grand Valley State University, thank you.
ISELY: Thank you.