The fundamental tasks of a labor management relations system are to provide workers an effective voice in shaping their terms and conditions of employment, to support and enhance productivity and efficiency of employers and the overall economy, and to provide equitable and efficient resolution to workplace problems and disputes. At the macro level of society, an effective labor-management system plays an essential role in fostering and sustaining a healthy democracy, one in which the voice of the workforce is heard and business, labor, government, and other civic group leaders engage in respectful discourse on the key political and society challenges facing communities, the nation, and the world.
On all these accounts, the American labor management relations system is failing. Union membership has declined from its peak of 35% in 1945 to 10.5% in 2018 and to 6.4% in the private sector. Unions have less than a 10% chance of achieving a collective bargaining agreement if management strongly resists their organizing efforts. The implicit social contract that generated tandem improvements in compensation and productivity between the end of World War II and the mid-1970s broke down in the 1980s resulting in a persistent productivity-compensation gap, rising income inequality, and a decline in the share of national income going to labor. The decline in collective bargaining coverage has produced a parallel decline in coverage of dispute resolution systems that meet accepted standards of due process while lower quality mandatory arbitration systems imposed, designed, and administered by employers have grown to cover just over half of those employed in non-union employment relationships.