Union membership decline in manufacturing and labor outsourcing

Human Resource Retention

Human Resources Membership and Retention

Organized labor unions have seen a decline in membership retention of the last twenty years because of a loss of manufacturing jobs in the United States. There are many different perspectives in which to view this phenomenon from. Due to the rise of the globalized business environment, labor is no longer necessarily required to be in proximity to the parent company. More and more organizations are outsourcing labor or opening foreign operations in locations where the labor force is far less expensive and yet still highly skilled. Therefore businesses have a strong financial incentive to explore labor markets around the world. Furthermore, in many cases, there are also significantly relaxed or no regulations present in foreign markets. All of these factors make it difficult for labor in the United States to be competitive and in turn the organized labor unions have diminished from their former position in many industrialized countries.

Figure 1 - Union Membership as a Percent of Employment, 1930-2003 (Mayer, 2004)

The Corporate Perspective

The corporate perspective contains many complex considerations. For one, it is difficult to justify making provisions for union activity when there are different options that are financially superior. Labor is cheaper elsewhere and automation also limits the need for the amount of labor that was once needed to run various business processes. Although some organizations are tethered to the United States because there industries must be on-site such as gas and oil companies, many of the manufacturing industries do not face the same pressures. For example, when president Obama asked Apple co-founder and CEO, Steve Jobs, what it would take to return high-tech manufacturing jobs to the United States, Jobs' responded that those jobs are never coming back (Crovitz, 2011).

However, there is one development that might overturn the tides of union neglect from the corporate world. Apple, for example, faced mass amounts and outrage and protest over their utilization of unethical suppliers in China. Their suppliers even installed suicide netting around the perimeters of their factories to deter any further disgruntled employees from committing suicide by jumping from the roofs of the factories. The negative publicity that surrounds such events can be very costly to U.S. corporations. Therefore, there might be an opportunity for corporations to begin to utilize more domestic labor in an attempt to become more socially responsible and ward off any future publicity.