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Two possible explanations have been offered for the declining rate of unionization in the U.S. economy, which peaked at 33.7 percent of the nonagricultural labor force in 1954 and dropped to 16 percent in 1991. Structural changes and import penetration are one common explanation; increased management opposition caused by the union/nonunion wage differential is another. However, neither explains the 1983 Phelps Dodge strike. To explain that strike requires strategic choice theory. Further, Ability to Pay/Ability to Make Pay models of relative bargaining power must be modified to reflect the expanded range of options and strategies that employers today are choosing to exercise. The structural change hypothesis contends that recent shifts in demographic, geographic, and demand variables have been unfavorable to the expansion of union membership. The shift from blue-collar manufactured goods to white-collar services, the large proportion of the increase in employment accounted for by women, youths, and part-time workers, and the relocation of industries from the Northeast and Midwest to the South and Southwest have eroded traditional union strongholds. Also, the union pay differential may have reduced union employment by encouraging capital substitution, subcontracting, and relocation.
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