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  First Thoughts

    Dan Gilmore


    Supply Chain Digest

Sept. 2, 2022

The Labor (Day) Supply Chain 2022

Our Annual Review on the State of Labor in the Supply Chain


Monday of course marks the annual Labor Day holiday both here and in Canada. Starting in 2011, I have written a column on the state of the labor supply chain in conjunction with this event. It was popular enough that I have continued in each year since. It's a lot of work, but well worth it.

It has been a decent past year for labor in some way, with worker shortages everywhere, pressuring supply chains, giving labor some clout and momentun - but starting from a low base. Still, this is naturally (and finally) pushing blue collar wages higher, as we'll see below- but not enough for most to keep up with inflation

The percent of total US workers that are union members was 10.3% in 2021, to me surprisingly down 0.5 percentage point from 2020's 10.8%, according to the most recent data from the US Bureau of Labor Statistics. The unionization rate in 2020 had actually risen in 2020 versus 2019, reversing many consecutive years of declines.

Gilmore Says....

The issue for labor is still not yet "here come the robots," but it will be soon enough.

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As many of you know, US unionization membership is now dominated by public sector workers such as police and teachers.


Unionization rates nationally in the public sector are at 33.9%, down from 34.8%, in 2020, But that is about five times greater than the rate of just 6.1% in the private sector, down from 6.3% in 2020.

All this of course continues the powerful long-term trend of a steady union decline since the Labor Department started reporting on it in 1983, when overall unionization was at 20.1% and 16.8% in the private sector. Those numbers themselves were well down from previous decades before this metric was officially tracked by the government.

I will note part of that decline in private sector unionization rates is due to the loss of some 6-7 million US manufacturing jobs since 1983, as manufacturing is clearly more organized than the service sector, but that is far from the only factor. Unions have clearly lost appeal to many, especially in the South, where many new manufacturing factories have been headed for more than two decades.

But public opinion may be shifting, as I will discuss in just a bit.

Together, there were 14.0 million private and public sector employees in a union in 2021, down from 14.3 in 2020. And compare that to the 17.7 million union members in 1983, when the total US labor force was much smaller.

There are also huge differences between states. South and North Carolina (1.7% and 2.6%, respectively) had the lowest unionization rates in 2021. The next lowest rates were in Utah (3.5%), Texas (3.8), and South Dakota (4.0%). Eight states had union membership rates below 5.0% - the same number as last year. Two states had union membership rates over 20.0% in 2020: Hawaii (22.5%) and New York (22.2%). Washington state was next at 19.0%.

The percent of US manufacturing workers that are union members fell to 7.7% last year, down from 8.5% in 2020. I do not know why there would have been such a sharp drop last year. That number is lower than the percent of manufacturing workers covered by union contracts, such as those that opt out in right-to-work states, with union representation of 8.5% last year.

Ponder that - about just 1 in 13 US manufacturing workers are unionized today, versus 17.5% in 1994. According to, 38% of private sector manufacturing workers were in unions as recently as 1973.

Don't think this downward union trend is only a US phenomenon. Unionization rates in labor-loving Sweden, for example, have fallen from about 95% in the mid-1990s to around 68% today. Many other countries mirror US unionization rates more closely. Unionization in France - generally considered very supportive of labor – has fallen to just under 8% of all workers, and just 5% in the private sector. Union membership is higher in the UK, at about 23.1%, but that's down from more like 40% in the mid-1990s.

In July, there were about 8.9 million non-supervisory manufacturing workers in the US, basically flat from a year ago. That is still well up from the bottom of the recession in 2009, when we fell to about 8 million shop floor workers, meaning we've added about 900,000 manufacturing jobs since then - not a lot in 13 years, but better than a decline. In 2004, there were just over 10 million factory floor workers - we're down just about 1 million positions from that level, and much more from the 1990s.

According to the BLS, the average hourly wage for shop floor manufacturing workers was $25.09, up from $23.77 in July 2021, for a gain of 5.5%. Not bad, but not keeping up with current inflation.

That's also up from the $19.09 per hour in July 2012, or a rise of 31.4% over 10 years. That's a cumulative average annual growth rate of 2.77%. So wages have risen modestly, about equal with inflation, and thus not enough to improve a worker's lifestyle, especially with healthcare costs taking more and more of the paycheck.

Meanwhile, there has been very steady growth in warehouse jobs, though they represent just a tiny fraction of manufacturing positions. There are now about 1.58 million non-supervisory warehouse workers in the US (as of June), up about 10.4% from 1.43 million in June 2021.


The number is substantially higher than the 589,000 warehouse workers in 2012, meaning a rise of 168% over 10 years - but even with that growth they only represent about 17.7% of manufacturing floor jobs – though that percentage is rising. Warehouse jobs were 13.9% of manufacturing workers in June 2020. I'll will note some jobs at plant warehouses are counted as manufacturing positions.

In terms of wages, average non-supervisory pay for warehouse workers was $21.54 per hour in June, versus $19.50 in mid-2021 - a rise of a very strong 10.4% in a year. However, the average warehouse wage is about 15% less than the average manufacturing rate, but the gap was 18% last year.


Pay for warehouse workers was at $16.14 in June 2012, meaning DC wages have risen only 33.4% over the past 10 years– and almost all of that starting in 2017. That's an annualized rate of 2.9%, a little more than the growth in manufacturing wages, the result of much improved pay hikes in recent years.


Labor strikes, once such a commonplace event, have almost disappeared, at least outside the  teacher ranks.

Last year, there were 21 major work stoppages (involving more than 1,000 workers) in the US, up from just 8 in 2020, according to the BLS.  But that compares with 69 in 1986 and 276 in 1976 - and 470 in 1952.

Most of those major strikes were outside of manufacturing, we will note, and include things like teacher strikes in big cities and healthcare worker actions. Manufacturing strikes accounted for 24% of major strikes - including late 2021 walkouts at Johm Deere and Kellogg's, both of which ended with strong contracts for workers.

But the most watched union action for the second straight year was at Amazon. After handily winning a unionization vote in 2021 at a Bessemer, AL fulfillment center, the NLRB (dubiously) ordered a new vote based on alleged rule violations by Amazon.


In March, Amazon won that vote too, but with a lower majority. But then also in March, Amazon FC workers on Staten Island won a bid to form a labor union after federal officials tallied the votes. If a union is ultimately formed, it will become the first and only Amazon FC to unionize anyere in the country - but it hasn't happened yet. There is new union activity at a few other Amazon facilities. A few Starbuck's locations voted to unionized, and there has been some action relative to Apple stores.

There were no additions in the number of "right to work" states in 2021/22, under which employees can't be compelled to join unions. Once mostly found only in Southern and some Western states, recently some in the Midwest have jumped on the bandwagon despite furious opposition from labor. There are now 28 such states, but no new ones appear to be on the horizon. Some sources list West Virginia as "pending," but it's included in the 28.

But labor had some victories in the last year.


This summer, the US Supreme Court refused to hear a challenge to California's contoversial "AB 5" law, which makes it almost impossible for most workers - including truck drivers - to be classiied as contractors instead of employees. This was a big one - the ramifications of which could be huge.

There is currently a bill in the Senate - “Protecting the Right to Organize Act” (PRO Act) - that it appears would outlaw right-to-work status in any state. This would be a significant change and be a huge victory for labor if it passes and is signed into law.


Illinois voters will decide in November whether the state will give much labor more clout and make it easier to unionize. Another one to watch.


Finally, some data show the public warming towards unions. A Gallup survey found 71% of Americans now approve of labor unions up, from 64% before the pandemic and the highest level Gallup has recorded on this measure since 1965.


There's a lot more, but I am well out of space. The issue for labor is still not yet "here come the robots," but it will be soon enough.

Any reaction to our summary of the labor supply chain 2022? Let us know your thought at the Feedback section below.

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