Decline in Unions costs workers $133 billion in wages annually
Between 1979 and 2013, the share of private sector workers in a union has fallen from about 34 percent to 11 percent among men, and from 16 percent to 6 percent among women. The authors note that unions keep wages high for nonunion workers for several reasons: union agreements set wage standards and a strong union presence prompts managers to keep wages high in order to prevent workers from organizing or their employees from leaving. Moreover, unions set industry-wide norms, influencing what is seen as a “moral economy,”
“Working class men have felt the decline in unionization the hardest,” said Rosenfeld. “Their paychecks are noticeably smaller than if unions had remained as strong as they were almost 40 years ago. Rebuilding collective bargaining is one of the tools we have to reinvigorate wage growth, for low and middle-wage workers.”
Rosenfeld, along with co-authors Jennifer Laird and Patrick Denice, find that the effects of union decline on the wages of nonunion women are not as substantial
This is the first study providing a broad estimate of the wage decline for nonunion workers as the result of the erosion of unions.
This decline in unions has eroded wages for nonunion workers at every level of education and experience, costing billions in lost wages. For the 32.9 million full-time nonunion private sector
women and 40.2 million full-time private sector men, there is a $133 billion loss in annual wages because of weakened unions.
Given dramatically weakened unions, their effect on nonunion wages has declined over time: 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 benefiting from unionization: union erosion can explain a third of the growth of wage inequality among men and one-fifth of the rise of wage inequality among women. 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.
“Unions have functioned to raise the wages of all workers, union and nonunion,” said Lawrence Mishel, EPI President. “The erosion of collective bargaining has clearly taken a huge toll on nonunion wages in the United States, and is a major factor in the wage stagnation of the last four decades.”