Some Say Union Revival Could Address Retirement Insecurity

Data from the Bureau of Labor Statistics shows the U.S. now has the fifth lowest trade union density of the 36 member nations of the Organization for Economic Co-operation and Development.


Even the most cursory internet search will uncover an array of surveys and studies, conducted by all manner of stakeholders, underlining the substantial decline in U.S. union membership seen over the past several decades.  

As data from the Bureau of Labor Statistics (BLS) shows, last year, 10.8% of workers in the United States reported being a union member, compared with 20.1% in 1983. That’s up 0.5 percentage point from 2019’s numbers, but still far lower than in the past. The data shows a strong regional concentration of union membership, as well, with more than half of all U.S. union members living in either California, New York, Illinois, Pennsylvania, New Jersey, Ohio or Michigan.

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Perhaps the most informative data puts the U.S.’s union representation into global context. As of 2016, the U.S. had the fifth lowest trade union density of the 36 member nations of the Organization for Economic Cooperation and Development (OECD). Responding to such statistics, the incoming Biden-Harris administration has pledged to address the precipitous decline in union membership, says Russell Kamp, managing director at Ryan ALM.

Kamp tells PLANADVISER he is firmly in the group that believes growing union membership to previous levels could go a long way toward solving some of the most vexing economic challenges facing Americans today, nearly a year into a deadly pandemic that has withered the global economy.

“Take just the example of stagnant wage growth,” Kamp says. “We haven’t had anyone effectively negotiating wages on behalf of enough workers, and so wages have remained essentially flat, despite the tremendous economic growth we have experienced. There is very little collective bargaining power in many of the industries that are the biggest engines of growth. I’m hopeful that federal actions to create stronger union representation can help to finally deliver the wage growth that we so badly need.”

To those skeptical about increasing the role and power of unions, Kamp says it is important to consider the alternative course of action—i.e., simply permitting the unchecked growth of economic inequality based on current market forces.

“The pandemic has revealed how many people in this country can’t make ends meet in the current system, even as they are working full time,” Kamp says. “It is unacceptable and it is a real policy issue. It is a measurable macroeconomic issue. If we do nothing to address income inequality, you will eventually see too few people demanding goods and services, because they are the only ones who can afford to do so. The whole economy just collapses.”

Kamp says he believes that strengthening unions will also naturally help to stabilize and improve the outlook for defined benefit (DB) pensions, both those sponsored by individual employers and those operated by multiemployer unions.

“As the unions themselves are saying, we need smart pension reform,” Kamp adds. “The previous reforms under MPRA [the Multiemployer Pension Reform Act of 2014], in my view, have ultimately harmed participants and beneficiaries. We have seen sizable reductions of promised benefits, and so, we need further reform that works in the interest of participants and beneficiaries. We need pensions, those operated by unions and individual employers, to be a healthy and stable retirement vehicle for a growing workforce.”

Kamp’s comments have been echoed in the past few weeks in various open letters and public comments made by union leaders. For example, the Teamsters are calling for the enactment of the Rehabilitation for Multiemployer Pensions Act or the Emergency Pension Plan Relief Act. Both of these bills would create new protections for benefits that retirees have earned, while barring cuts to their pension benefits. Union leaders say it is also critical for Congress to pass corporate bankruptcy reform, and that the new administration should rescind other Department of Labor (DOL) rules and executive orders that threaten the health of multiemployer pension plans.

Though the Biden-Harris administration is yet in its early days, there are some signs that the pro-union sentiments voiced during the campaign will be backed up with concerted policy and legislative action. One preliminary but promising sign of this is the nomination of Marty Walsh as DOL secretary. He’s considered to be one of the most progressive members of the incoming cabinet. Besides winning election as the mayor of Boston for two terms, Walsh’s background also includes having joined the Laborers’ Union Local 223 at age 21, and eventually becoming president of the union. He also led the Boston Metropolitan District Building Trades Council.

Democrats Have Won the Power to Fix Union Pensions

A bipartisan compromise solution to end the multiemployer pension crisis is urgently required, sources agree, and one could finally be forthcoming in the U.S. Congress.


A little over a month ago, Russell Kamp, managing director at Ryan ALM, spoke with PLANADVISER about the funding crisis facing many, but not all, union-sponsored multiemployer pension funds.

At the time, Kamp said much was at stake for union pensions based on the outcome of the two early January Senate runoff elections in Georgia. Like many other observers commenting at the time, Kamp felt it was likely that at least one of those elections would be won by a Republican, and the assumption of divided government made him fairly pessimistic about the possibility of serious union pension reform occurring this year.

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Subsequently, both of those elections “went blue,” giving Democrats control of the House, the Senate and the White House. Speaking again with PLANADVISER about this unexpected outcome, Kamp says there is “definitely an increased probability of pension reform being addressed this year, finally.

“I am feeling encouraged, because one of the themes that soon-to-be President [Joe] Biden has repeatedly spoken about is broader pension reform and strengthening pensions,” Kamp continues. “He has also spoken, including just the other day, about taking steps to increase union membership. In order to do that effectively, you must be able to provide union members with sound and stable benefits. It is the right time to fortify these plans—to reform them and to provide additional contributions.”

In written comments shared with PLANADVISER, the leadership of the Retirement Security Coalition made some related points.

“A bipartisan compromise solution to end the multiemployer pension crisis is urgently required,” the coalition states. “That has been the case for a long time, but even more so now as the 117th Congress looks to continue navigating Americans out of an economic downturn—and away from the soon-to-be insolvency of the Central States Pension Fund and the Pension Benefit Guaranty Corporation [PBGC]. In the wake of the pandemic, retirees and blue-collar workers are struggling, and their retirement security is in jeopardy. Building back better requires strengthening these pillars of our communities. We are optimistic the Democratic-led House and Senate, their Republican colleagues and the new administration equally understand the sure devastation that awaits inaction.” 

Kamp says he will continue to advocate for the Butch Lewis Act during the 117th Congress, nothing that he helped to draft the legislation and that his firm’s mission is to solve liability-driven problems faced by pensions and other institutional investors. That legislation would, among other features, provide funds for 30-year loans and new forgivable financial assistance, in the form of government grants, aimed at supporting the most financially troubled multiemployer pension plans. Kamp says he hopes that the loan-based approach embraced by the legislation will be favored over some of the proposals put forward by Republican lawmakers, such as the Grassley-Alexander bill.

“I just don’t want to see a solution that does harm to the significant number of multiemployer pension plans that continue to perform adequately,” he explains. “The Grassley-Alexander approach, in my view, would do so. The backbone of the proposal is escalating PBGC premiums for everyone while lowering the discount rates plans can use. These steps won’t help the system as a whole. We need to do pension reform smartly, wherein we really address the serious issues affecting a specific subset of these plans without damaging all plans.”

Kamp says these arguments about saving union pensions can and should be linked to the broader economic challenges facing the U.S. and its labor force. He says he believes now is the time to embrace a new way of thinking about the importance of collective labor and the importance of fairness and equity in the economy—and to use the forthcoming federal stimulus packages to achieve necessary reforms.

“People need to embrace that the idea that, as a whole, the United States government can operate on a different monetary system compared with an individual’s budget or even the budget of a given state,” Kamp says. “Everyone looks at the federal government as being economically constrained, like New Jersey or the Kamp household. In reality, the federal government is perfectly capable of deficit spending as a means of providing stimulus when needed—when the private sector can’t make up for the loss of economic activity. The real risk is the possibility of inflation, but that only occurs if the demand that is created from the stimulus exceeds our ability as a country to meet the required scale of production. Right now, that is definitely not the case. We have so much slack in the economy, it is unbelievable.”

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