EPI report . . . Stagnant wages a clue to corporate motives

Collective bargaining between management and labor, which plays an essential role in today’s labor market by raising the wages and benefits of working men and women, is under attack, according to a recent report by the Economic Policy Institute, a Washington D.C.-based research organization.

The report, How today’s unions help working people, points out that organized labor, in addition to providing fair wages, benefits and job protections, also supports a fair and prosperous economy as well as a vibrant democracy.

“Unions raise workers’ wages and strengthen their rights at work, but they also give working people a voice in our democracy,” said EPI President Lawrence Mishel.

“We will never again see consistent robust middle-class wage growth or a healthy democracy without first rebuilding collective bargaining.”

The report provides updated statistics on who today’s unions represent and where they are strongest. The authors emphasize that labor unions are more diverse than ever before:

Union members include dental hygienists, graduate students, and digital journalists, as well as transportation and manufacturing workers and public-sector employees.

About two-thirds of union workers age 18 to 64 are women or people of color. 14.5 percent of black workers age 18 to 64 are covered by a collective bargaining agreement, compared with 12.5 percent of white workers and 10.1 percent of Hispanic workers.

“Today, more than one in nine workers are represented by a union,” said EPI Heidi Shierholz, EPI policy director. “By exercising their freedom to join together and negotiate their wages and working conditions, workers gain a voice through their union.

“But that freedom is increasingly under threat. Anyone who supports working people or a healthy democracy should stand up and support unions and collective bargaining.”

Collective bargaining is an important force in reducing inequality and ensuring that low- and middle-wage workers are given a fair return on their work. As productivity has risen over the last several decades, wages have remained flat for the majority of working people, while skyrocketing for those at the top.

Union decline can explain one-third of the rise in wage inequality among men and one-fifth of the rise in wage inequality among women from 1973 to 2007. Among men, the erosion of collective bargaining has been the largest single factor driving a wedge between the middle class and the top one percent.

Working people in unions use their power in numbers to secure a fairer share of the income they create. On average, a worker covered by a union contract earns 13.2 percent more in wages than a peer with similar education, occupation and experience in a nonunionized workplace in the same sector.

But more importantly, collective bargaining also raises wages for nonunion workers—as an economic sector becomes more unionized, nonunion employers pay more to retain qualified workers, and norms of higher pay and better conditions become standard.

If union density had remained at its 1979 level, weekly wages of nonunion men in the private sector would be five percent higher today.

“The lack of collective worker power helps explain why workers’ wages have been stagnant for the past 40 years,” said Mishel, “and why working people are so frustrated—as they have not reaped any of the gains of an improving economy.”

Unions help close racial wage gaps, by creating pay transparency, correcting salary discrepancies, establishing clearer terms for raises and promotions, disproportionately boosting the wages of lower-wage workers, and helping workers who have been discriminated against achieve equity.

Hourly wages for women represented by unions are 9.2 percent higher on average than for comparable nonunionized women, and black and Hispanic workers get a disproportionate boost from unionization compared with their white counterparts.

Despite decades of attacks by corporate interests and their political allies, there has been a recent resurgence of interest in collective bargaining, especially among young people. The report notes that unions are especially appealing to young workers. 55 percent of 18- to 29-year-old workers view unions favorably, compared with 46 percent of workers age 30 and older.

Comments are closed.