Simple Analytics Show Impact Of Unions On Nonunion Pay is A Big Deal

American feelings and actions regarding unions pay ignore the statistical role unions have and do play in our society. For over a century most Americans have supported unions, but in the last few decades that support has eroded, paralleling membership. Why has the American public become down on unions is a hard topic to understand, but statistics definitely show that the diminishing role of unions in American society has meant diminishing wages and many other job related benefits that labor worked hard to attain over more than a century. Often ignored is how much the non-union worker has benefited by the power, influence and sheer existence of their union brothers and sisters.

The Mother Jones article by Jake Rosenfeld, Patrick Denice, and Jennifer Laird, linked below, analyzes what has been lost by nonunion workers citing that the “union boost to nonunion pay has weakened as the share of private-sector workers in a union has fallen from 1 in 3 in the 1950s to about 1 in 20 today.” While workers have increasingly avoided union membership, they are, nonetheless, feeling the consequences. Surprising to many, the article says: “private-sector union decline since the late 1970s has contributed to substantial wage losses among workers who do not belong to a union. This is especially true for men. And most hurt by the decades-long decline in the nation’s labor movement are those nonunion men who did not complete college, or go beyond high school—groups with the largest erosion of union membership over the last few decades.” Sadly, the very people who will probably not read the article.

The authors summarize their findings by asking what would the results be like, for several different groups, “if union density remained at its 1979 levels”:

  • “For nonunion private-sector men, weekly wages would be an estimated 5 percent ($52) higher in 2013 … For a year-round worker, this translates to an annual wage loss of $2,704. For the 40.2 million nonunion private-sector men the loss is equivalent to $2.1 billion fewer dollars in weekly paychecks, which represents an annual wage loss of $109 billion.”
  • “For nonunion private-sector men without a bachelor’s degree or more education (non–college graduates), weekly wages would be an estimated 8 percent ($58) higher in 2013 i … For a year-round worker, this translates to an annual wage loss of $3,016. As a benchmark, consider that the wage loss from increased trade with low-wage nations … among non–college graduates is estimated to be 5 percent.”
  • “For nonunion private-sector men with a high school diploma or less education, weekly wages would be an estimated 9 percent ($61) higher … For a year-round worker, this translates to an annual wage loss of about $3,172.
    The effects of union decline on the wages of nonunion women are not as substantial because women were not as unionized as men were in 1979. Weekly wages would be approximately 2 to 3 percent higher … for all nonunion women; nonunion, non–college graduate women, and nonunion women with a high school diploma or less education. However the cumulative effects are still sizable. For 32.9 million full-time nonunion women working in the private sector, weekly pay would be a total of $461 million more (and roughly $24.0 billion more per year) in 2013 if unions had remained as strong as they were in 1979.”
  • “The degree of nonunion wage decline reflects how much unionization has declined since 1979 among private-sector men (by two-thirds, from 34 to 10 percent), among women (by more than one-half, from 16 to 6 percent), and especially among non–college degree men (by more than two-thirds, from 38 to 11 percent).”
  • As unions have receded from the private sector, their effects on the wages of nonmembers (per percent of unionization) have declined. In recent years, these effects have fallen to between one-half and two-thirds of their late-1970s levels.”
  • “Union decline has exacerbated wage inequality in the United States by dampening the pay of nonunion workers as well as by eroding the share of workers directly benefitting from unionization. Earlier research (Western and Rosenfeld 2011) shows that union erosion can explain about one-third of the growth of wage inequality among men and about one-fifth of the growth of wage inequality among women from 1972 to 2007. At least for middle-wage men, the impact of the erosion of unions on the wages of both union and nonunion workers is likely the largest single factor underlying wage stagnation and wage inequality.”

The article concludes reminding us that the union’s: “ability to maintain wage and benefit standards rested on their political and economic power, and their salience throughout the culture. As the labor activist Richard Yeselson has observed, the labor movement in America once claimed ‘a broad institutional legitimacy grounded in their ubiquitous presence’.” Today that far reaching presence and power has largely evaporated, with nothing replacing it, as jobs moved overseas or simply shrank in scope, pay and benefits. At the same time the conservative segment of Americans politicians have targeted labor benefits as a logical next austerity priority. That earlier “presence has vanished throughout much of the private sector, rendering unions unable to exert the same political, economic, and cultural influence over the working lives of average Americans, union and (nonunion).” I can’t help wonder if any of it will be regained, but mostly whether the American worker will once again unite, demanding change and finding their collective power.

For more detail and an abundance of charts illustrating the analytics read the entire article below.

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