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Part of the decline in the number of union jobs was that there was a major decline in manufacturing jobs. Other big unions like the Communications Workers of America (CWA) lost a huge number of workers due to improved technology. AT&T had thousands of operators, as recently as the late 1970s, you needed an operator to place an international call. Even the number of clerical workers, many of whom were in the union at AT&T, declined as well. In the 1970s, low level managers would write memos long hand and submit them to the typing pool. After many iterations, the document would be done. Now, the manager would do this on a PC.
Unions tried to compensate for this by unionizing low level government employees and people in service industries. They were not as successful in this.
There was, to my knowledge, no success in unionizing professional fields such as programming, accounting, analysts etc. In selling the idea of unionizing these professions, the unions could use the teacher's union as an example of professionals benefiting from being in a union. Only when they see that the CEOs of the companies do not have their interests at heart would a union succeed.
Even before global outsourcing, many companies went to hiring programmers as temporary employees. There were temporary employees I knew who worked for the same corporation for over 10 years. Hiring these people as temporary relieved the company of providing benefits. With enhanced cheap telecommunication and the Internet, companies can "buy" these services anywhere.
In terms of the balance of power between a knowledge worker and his/her employer the last decade may be a period of extraordinary change of the magnitude of the impact of the industrial revolution. At that time, you had a small number of employees in a city and a huge pool of potential workers. An individual had no power to negotiate a fair deal. The solution was a union where the combined power of the workers (who together were a needed component of production) could balance the power of the owners. Today there is a vast pool of global workers ready to sell their skills at prices (wages) very much lower than in this country.
Part of the problem legislators may have is that this issue is new enough that anything taught in an international economics or labor economics course even 10 years ago is probably outdated. My international economics course in the 70s glorified a day when trade barriers would be lower, countries would produce what they had a "comparative advantage" towards producing and this would end up maximizing utility functions. Trade barriers were clearly seen as a way to preserve economically non- viable industries at the expense of denying consumers cheaper alternatives. Senators voting to protect their local industries were considered to be just pandering for votes.
I realize that I really need to read the current economic literature, having read nothing on this for years - although I do read Krugman's columns.
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