The Bureau of Labor Statistics reported yesterday that unions lost 400,000 members in 2012. Union membership fell from 11.8 to 11.3 percent of all workers — a new post-war low. A smaller proportion of Americans belong to unions today than when President Roosevelt signed the National Labor Relations Act in 1935.

Private-sector unions are in even more dire straits. Union membership in the private economy fell to 6.6 percent. Just one out of every 15 private-sector workers now hold union cards. Union membership remains as high as it does only because of government unions. Most union members, in fact, now work in government. More than a third of government employees belong to a union.

What has happened to the labor movement?

Unions have two problems. First, unions make the companies they organize more sluggish and less competitive. They constantly have to organize new members to replace those at declining unionized firms. Second, they have not changed to appeal to modern workers. That makes organizing those new members challenging.

Unions developed their collective-bargaining model for the industrial economy of the 1930s. It has remained almost unchanged since then. A collective-bargaining agreement still covers every worker under one contract — ignoring individual contributions. That approach was workable when everyone performed essentially the same task on the assembly line. In today’s economy where most employers see employees as valuable “human resources” it often holds workers back.

Union members at the Giant Eagle grocery store in Edinboro, Pa., learned this the hard way. The store gave two dozen industrious employees raises above their union pay scales. United Food and Commercial Workers Local 23 objected that this would permit some newer hires to make more than senior members. The union took the store to court.

Last November the District Court sided with Local 23 and ordered Giant Eagle to cut the workers’ pay. As the Judge noted: “The net result of the Union’s dispute is that some of its members will have their raises rescinded — in other words, the action of the Union in the arbitration will have the effect of taking away raises of certain members, thereby causing harm to its own members.”

That kind of attitude makes for a difficult sales pitch in organizing elections. The union movement has tried to solve this problem by getting rid of the secret ballot. A better solution would be to start offering a product that modern workers want to buy.

— James Sherk is senior policy analyst in labor economics at the Heritage Foundation.