Are we keeping unions in the friend-zone?

July 19, 2012: 12:23 PM ET

People have a relatively favorable view of unions overall, but they don't seem to want one for themselves. What gives?

By Jonathan A. Segal

FORTUNE -- We have seen a dramatic decline in unionization. In the 1950s, approximately one-third of private sector workers was in a union. Today, the figure is less than 7%. Over the past 50 years, unions have gained strength in the public sector. But now public sector unions are in the hot seat.

Governor Scott Walker of Wisconsin took on the public sector unions directly and aggressively by restricting the unions' bargaining rights. He easily survived a recall attempt in June and other governors may follow Walker's lead on labor.

But Walker's actions should not be viewed in isolation. Earlier this year, Indiana became a right-to-work state, the first such move in 10 years, which allows workers that were once required to join unions can now opt out. New Hampsire may be next. South Carolina, already a right-to-work state, passed a law requiring employers to post a notice informing employees that they don't have to join a union. Michigan is considering a law that would fine public sector illegal strikers. Even the liberal-leaning Massachusetts House enacted legislation that limits public sector workers' bargaining rights relating to health care.

Indeed, anti-union bills are popping up in state legislatures all over the country. And it's fair to expect even more this fall as unions become actively involved in election campaigns.

So, how have unions grown weak?

Not as loathed as Wall Street and Congress (for what it's worth)

As an initial matter, it is important not to draw too absolute a conclusion from a single special election in Wisconsin. After all, only a few years ago, in 2008, unions helped to elect a Democratic president and sizable Democratic majorities in the House and Senate.

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Even so, union membership and favorability ratings are declining. While unions were viewed favorably by more than 70% of American workers in the 1930s, that rating has since dropped to approximately 50%, according to Gallup.

But, in context, 50% is not all that low. In fact, according to the Pew Research Center, it is approximately the same percentage of Americans who have a favorable impression of corporations (also at an all-time low). And, according to a Harris survey conducted last year, just 26% of Americans believe that people working on Wall Street are "as honest and moral as other people."

Wall Street's faring is  better than Congress, which, according to a poll by Gallup this month, has an approval rating of 17%. Yet, somehow, the vast majority of incumbents return to Washington.

Changing economy, changing workers

While people have a negative view of Congress, they tend to like their own representatives. The opposite seems to be the case for unions. People have a relatively favorable view of unions overall, but they don't want one for themselves.

What's happened? For starters, the U.S. economy has morphed from one that's rooted in manufacturing to one that is primarily based on services. The unions have played no small role in this change. The reality is that it is often cheaper to produce many products abroad without the potential costs and risks that go with having to work with a union.

At the same time, corporations have increasingly recognized the importance of human resources. In the "Mad Men" days, corporations had personnel administrators who often were just slightly higher up in the chain than clerical employees. Today, we have chief human resources officers and vice presidents of human resources. As HR departments have come to play more of a pivotal role, corporations have become, well, more human, to the employees who work for and depend on them. So there is the perception that there is less of a need for a union shop steward.

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The government has also stepped in over the years. Substantial government regulations of employer-employee relationships have also reduced the perceived need for unions. Every time the government enforces labor laws, that takes away an organizing issue for the unions.

A few bright spots for unions

Even though support for unions has declined, industries that cannot outsource to foreign countries, which is the case with some manufacturing operations, are prime bases for revival. It is not surprising, then, that heath care and retail workers are in the unions' cross hairs. The National Union of Hospital and Healthcare Employees announced in early July that it intended to have about 100 organizers out in the field starting on July 9. The focus: every unorganized health care facility in Philadelphia.

Moreover, statistics do not take into account geographic differences. For example, unions are much more prevalent in the cities than in the suburbs and in the suburbs than in rural areas. And unions are more popular in the Northeast and the Rust Belt then they are in the South.

Even so, there is still a disconnect between the relatively favorable view of unions (especially compared to Congress) and their dismal ability to attract new members. So, perhaps there is another reason.

While employees generally have a favorable view of unions, they do not look at unions positively when it comes to preserving jobs. According to a study by the Pew Research Center published last year, while just over half of the respondents perceived unions favorably when it comes to salary, benefits, and working conditions, only 32% had a favorable view of unions in terms of their work to ensure the "availability of good jobs in America."

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Shuttered steel mills, factories, and other union shops are testaments to the cost of failed bargaining, long strikes, and rigid work rules. They inform the negative perceptions.

So if unions are perceived so negatively when it comes to these issues, why isn't their overall approval rating even lower? Why aren't they hanging low with Congress?

Although many employees may not want a union, I suspect that many want to know the option is available to them. It serves as a sort of insurance policy against abusive and arbitrary treatment.

So perhaps unions serve an almost existential purpose. The specter of unions reminds management that following legal requirements is just a starting point when it comes to employee relations. Employers who forget this do so at their peril.

Jonathan Segal is a partner at the law firm Duane Morris LLP, where he is a member of the firm's employment, labor, benefits and immigration practice groupThis article should not be construed as legal advice. 

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