The Free Rider Problem

Union membership in the United States hovers at approximately 12 per cent, down from an all-time high of about 35 per cent, a figure reached during organized labor’s glory days, back in the early 1950s. In just five decades labor has lost two-thirds of its membership. If we look only at the private sector, and don’t count government employees, school teachers, firemen and policemen, union membership dips under 7 per cent. Understandably, these numbers terrify organized labor.

But it can be argued that these figures are somewhat misleading. There’s a dynamic in play which supports the argument that organized labor’s influence is significantly greater than the naked statistics indicate. That dynamic is the phenomenon of the “free rider.” Simply put, free riders are those workers who benefit from the existence of labor unions, who reap many of the goodies provided by union contracts, but who don’t belong to a union.

Free riders come in two forms: those who work for a company which, in order to keep the union out, offers wages and benefits that come close to union standards; and those workers who belong to an “agency shop,” an arrangement where workers are represented by a labor union but whose employees are not required to join, and who, therefore, even though they benefit from the wages and benefits negotiated by the union, do not show up on its membership rolls. School districts are a common source of agency shops.

While the number of agency shop “non-members” are dutifully recorded, it’s impossible to quantify the number of free riders who fall into the other category-those who work at non-union facilities which offer wages and benefits close to union levels. But the number is considerable. Paying a decent wage and offering decent benefits is an enormous inducement to keep people from seeking union affiliation; and it’s a step that companies which are adamantly opposed to unions are willing to take.

Arguably, if it’s the role of unions to improve the economic lives of working people, then unions are succeeding, if indirectly, by motivating non-union companies to reward their employees. After all, securing workers decent wages and benefits is what it’s all about. The downside is that these workers don’t pay union dues, don’t appear on membership rolls, and, worst of all, live their lives under the delusion that they’ve made it “on their own.”

Free riders don’t realize that if it weren’t for the existence of labor unions, forklift drivers wouldn’t be earning $20 per hour. If it weren’t for labor unions, working people would be scraping by, undercutting each other in the open job market, with management in the position of calling the shots, able to appeal to the lowest common denominator.

Why are companies willing to pay higher wages and offer benefits to keep the union out? Because they don’t want the kind of “partnership” that comes with a union shop. They don’t want to have to negotiate a contract every three or four years; they don’t want the grievance/arbitration procedure introduced; they don’t a workforce of people who see the union (rather than the company) as its benefactor.

But free riders (most of them, at least) don’t see it that way; they believe that making a living wage and enjoying decent benefits is something they’ve somehow “earned.” At the risk of making a grotesque generalization, the American South stands as a prime example. The reason corporations set up factories and offices in the South is because they know that Southern workers are anti-collectivist, less apt than workers anywhere in the country to seek to join or form a labor union.

Yes, the standard of living in the South is lower, and yes, environmental restrictions are less strict; but businesses know that by offering wages and benefits within spitting distance of union standards, making the decision to join up even less attractive, they can keep their employees non-union. This knowledge certainly reached Tokyo. That’s why Japan has established their auto plants and other ventures in the South.

But without the presence of unions, these free riders would be facing an alternative, far harsher reality. Without the “threat” of unions, they would be devoid of leverage, forced to navigate the job market on their own. Admittedly, some of these free riders have come to recognize the dynamic, and have used the threat of joining a union as a means of gaining monetarily. More power to them. They may not be paying dues or appearing on national membership rolls, but they are advancing themselves economically, and doing it, indirectly, with the help of organized labor.

So that 12 per cent figure is a bit misleading. What that number would be if we factored in all those workers who, while not members themselves, benefited from the existence of labor unions is anyone’s guess. But all we have to do is look around to see that it would be significant.

DAVID MACARAY, a Los Angeles playwright and writer, was president and chief contract negotiator of the Assn. of Western Pulp and Paper Workers, Local 672, from 1989 to 2000. He can be reached at:



David Macaray is a playwright and author. His newest book is How To Win Friends and Avoid Sacred Cows.  He can be reached at