Labor Day is celebrated to recognize the important contributions that U.S. workers make to the economic prosperity of America. But at the same time, it provides an opportunity to reflect on the declining relevance of organized labor to the success of our workers.

A century ago, unions played an important role in the labor movement by boosting workers’ wages, improving working conditions and giving workers a voice in the workplace. Unions were relevant then because organized labor provided a platform by which workers could better negotiate these issues with employers. But unions are increasingly unable to address the challenges that workers face in the 21st century.

When manufacturing employment started to decline in the late 1970s, due primarily to technological advances and automation and to a lesser degree globalization, workers did not flock to unions to shield them against these changes.

In fact, union membership started to decline concurrently with the decline in manufacturing employment. In 1983, 16.8 percent of workers were part of a private-sector union — today that share has shrunk to an all-time low of only 6.4 percent. Over that period, manufacturing employment declined from 18 million to only about 12 million factory workers today.

While unions cannot be blamed for the job losses that have occurred due to technological advances and offshoring, in many ways unions made matters worse for companies facing those changing global forces. Typically, union wage premiums arise because unions negotiate compensation packages that are artificially above market compensation levels. For firms facing global competition, unions raise their employers’ labor costs and make them less competitive. This hastened the outsourcing of production overseas to take advantage of lower manufacturing labor costs in other countries.

Read the source article at aei.org