Union Finances Up 191% while Membership Down 14%

April 3, 2023 /

I heard an interesting concept: “Finance Unionism.” This helps explain how unions have become so wealthy while their membership numbers have plummeted. I’m curious to hear your thoughts about this.

According to the U.S. Department of Labor, since 2000, labor’s net assets (assets minus debt) rose from $11 billion in 2000 to $32 billion in 2021. This is a 191% increase.

At the same time union membership dropped by 14%, or 2.3 million members.

Dues revenue is typically tied to wages. But wages are only up about 75% (not 191%) since 2000.

Unions, like the businesses they are, also generate revenue from investments and real estate (and even private equity and hedge funds). These were probably not up 191% percent, either.

Unions are getting rich while losing members because they don’t spend money on their membership. Unions spend less money on organizing and strikes than they bring in from dues and investments.

Unions used to want to organize new members. They used to spend over 50% of their budgets on organizing. Over 30% of the workforce used to be in unions. Unions also used to have more strikes and achieve greater wins for their members.

Enter “Financial Unionism” loosely defined as a union’s desire to grow its bottom line instead of organizing or improving wages and benefits of its members. In other words, increasing financial assets while maintaining the existing membership is their primary objective.

For example, while unions used to spend over 50% of their budgets on organizing, today, the Steelworkers and UAW devote a measly 3% and 6% of their budgets, respectively, to organizing. Unions also only allocate less than 3% of their revenue to strikes.

Unions, it seems, have realized they can make more money by investing in stocks and real estate than by increasing the number of dues-paying members.

Isn’t that exactly what unions complain about with businesses: not caring for the employees (members)? Corporate greed and profits take precedent over employees (members)?

What do you think?