http://www.epi.org/publications/entry/webfeatures_viewpoints_union_decline/Lawrence Mishel Ross Eisenbrey
December 12, 2005
THIS PIECE ORIGINALLY APPEARED IN SALT LAKE TRIBUNE ON DECEMBER 12, 2005
<snip>How can it be that a growing economy, with record profits and constantly improving productivity, provides diminishing returns to average working people? Incontestably, the loss of union power is part of the problem. With union membership declining, workers are less able to demand and win a fair share of the economic pie.
The "union effect" on pay is dramatic: unionized workers earn 20 percent more in wages and 28 percent more in total compensation than non-union workers. The beneficial effects of unions sometimes extend even to non-union employees because their employers tend to improve pay in order to compete for workers. For example, a high school graduate whose workplace is not unionized but whose industry is 25 percent unionized is paid 5 percent more than similar employees in less unionized industries.
Unionized workers are also much likelier to receive paid leave, health insurance, or an employer-provided pension plan. The pensions they get are more generous than those given to non-union workers -- employers contribute 28 percent more to union plans. They get 26 percent more vacation time and more paid holidays, pay smaller health care deductibles, and are far likelier than non-union employees to receive employer-provided health care after they retire.
Unions reduce wage inequality because they raise wages more for low- and middle-wage workers than for higher wage workers, more for blue-collar than white-collar workers, and more for the 70 percent of workers who don't have a college degree than for the 30 percent who do. Until 1977, unions represented more than 30 percent of the entire U.S. workforce.
In 1978, union density fell below 30 percent for the first time since before World War II, and with minor exceptions, union membership as a share of the U.S. labor force has declined steadily ever since, to 12 percent today. Wage inequality began to grow at the same time.