ASIAN WISCONZINE ONLINE



AUGUST 2024 ISSUE



4 Ways Unions Make Our Economy and Democracy Stronger



By Sachin Shiva



(LEFT): Members of the Boston Teachers Union and their supporters rally in support of contract measures in Boston’s Nubian Square on June 5, 2024. (Getty/The Boston Globe/Erin Clark)

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This article was published by the center for american progrESS


Unions are a critical force in American society, ensuring that everyday Americans can earn decent pay and benefits and have a voice in our democracy. Study after study has shown that unions make our economy and democracy stronger by boosting wages for workers, reducing wage inequality, increasing voter turnout for union and nonunion voters alike, and providing a counterbalance to wealthy interest groups. This is part of a historical tradition of unions playing a powerful role for American workers: Unions helped create the 40-hour workweek, child labor laws, and improvements in health insurance. At their height in 1945, unions represented one-third of all U.S. workers.

Unfortunately, decades of attacks on unions, weak U.S. labor laws, and a changing economy have caused union membership to steadily decline in 2023, unions represented just 10 percent of workers. However, in recent years, the popularity and activity of unions has grown to levels not seen in decades, bolstering their ability to deliver on these benefits.

The growing popularity of unions

Growing numbers of workers are trying to form unions. There was a more than 50 percent jump in union petitions from 2021 to 2022, with a continued increase into 2023. Strike activity has also increased significantly, overwhelmingly led by unionized workers: There were 33 major strikes in 2023 involving 458,900 workers—the largest number of strikes in two decades.


Meanwhile, nearly half of nonunion workers say they would like to join a union, and more than two-thirds of the public support unions. Gen Z, in particular, is the most pro-union generation alive today, even more so than older workers when they were the same age.


Unions are increasingly popular for good reason. New data confirm that unions raise wages and wealth for all workers, while their decline explains the rise in wage inequality. At the same time, unions increase political participation and ensure the middle class is represented across a range of issues.

1. Unions raise wages for workers from every background When workers come together in unions, they can negotiate for higher wages and benefits. Research has consistently demonstrated that unions raise wages for various types of workers. New data on 2023 workers from the “earner study” portion of the Bureau of Labor Statistics’ Current Population Survey (CPS) confirm these findings.

Figure 1 shows the union wage premium—or the percent change in weekly earnings due to union membership—for various types of full-time workers based on the new data. After controlling for factors such as race, gender, age, occupation, and education, among others, the union wage premium for all workers is 10 percent. Thus, on average, workers who join a union can expect to see a 10 percent increase in their weekly earnings specifically, women who join a union can expect a 7.8 percent wage increase. The union wage premium is highest for Hispanic workers (12.0 percent) and workers without a college degree (11.9 percent), meaning union membership can close racial and educational wage gaps. Notably, these figures may underestimate the total impact of unions on all workers’ pay due to the “union threat effect,” which occurs when union workplaces put upward pressure on wages at nonunion companies.





This sample includes all employed full-time workers between the ages of 25 and 64, excluding self-employed workers. Wages represent workers' weekly earnings (rounded) at their current job in 2023 dollars before deductions. A worker is considered part of a union if they are covered by a union contract. Wage premiums control for several characteristics of workers, including their sex, race, education, age, region, citizenship status, industry, and occupation.Source: Authors' analysis of 2023 Earner Study (monthly sample) in Sarah Flood and others, “Integrated Public Use Microdata Series, Current Population Survey Data for Social, Economic, and Health Research: Version 8.0 (dataset)” (Minneapolis: Minnesota Population Center, 2020), available at https://cps.ipums.org/cps/.Chart: Center for American Progress

In addition, union membership increases workers’ wealth—the total value of what people own minus the value of all their debts. Unions can help increase household wealth by improving job stability and providing enhanced benefits such as pension plans and health insurance. Recent Center for American Progress analysis of the Federal Reserve’s Survey of Consumer Finances (SCF) shows that union households hold $338,482 in median wealth while nonunion households hold $199,948. Thus, a typical union household is 1.7 times as wealthy as a typical nonunion household.


How unions help workers: The story of Raquell Rivera

The economic power of unions may be best exemplified by the stories of those like Raquell Rivera, a Michigan resident who went from living in a homeless shelter to owning her own home in the span of four years. In a recent op-ed for The Michigan Independent, Raquell shared that after leaving home at the age of 19 due to unsafe living conditions, she spent two years couch-surfing and living in youth shelters. One day, she saw an advertisement that encouraged her to apply for a pre-apprenticeship program offered by Michigan’s Women in Skilled Trades (WIST) program. Today, she’s a journeywoman carpenter and proud member of Carpenters Local 1004 and last November, she bought her first home. Raquell shows how unions can help make a middle-class lifestyle a reality for workers.


2. The decline in union membership helps explain the rise in wage inequality


The decline in union membership has eroded some benefits of the union wage premium because fewer workers are receiving them. Due in part to union decline, workers’ real wages have remained stagnant, and there has been a corresponding increase in wage inequality. As Bruce Western of Harvard University and Jake Rosenfeld of the University of Washington found when looking at the effect of union density on rising wage inequality, the decline of unions from 1973 to 2007 explains up to one-third of rising wage inequality among men and one-fifth of rising wage inequality among women. Many other studies have similarly reached the conclusion that declining union strength is a key contributor to rising wage inequality.


Rising wage inequality hurts workers. It leads to economic and political concentration of power, erodes social cohesion, reduces intergenerational mobility, and decreases the share of wealth going to the middle class.

3. Unions increase political participation in our democracy


In addition to economic benefits, unions increase political participation, particularly voter turnout, in democracies. They help decrease the costs and increase the benefits of participation, so more people get involved. Unions achieve this in a number of ways—from simply knocking on doors and letting people know about an election to helping people get to the polls.


In addition, unions inform their members of the benefits of democratic participation, disclose which elected officials have provided the most support, and encourage members to vote for pro-worker politicians. Therefore, it is no surprise that research shows weakening unions lead to fewer working-class candidates serving in state legislatures and Congress.


While being a union member makes a person more likely to vote and participate in politics, unions also increase participation among nonmembers, as nonunion members are often the recipients of union efforts to educate and mobilize. For example, according to analysis by political scientists Benjamin Radcliff and Patricia Davis, unions help increase voter turnout rates across states. After applying relevant controls, a 1 percentage point increase in union density in a state increases voter turnout rates by 0.20 to 0.26 percentage points. In other words, if unionization were 10 percentage points higher during the 2020 presidential election, 3.1 million to 4 million more Americans would have voted.


As an increasing number of citizens feel their democracy is no longer responsive to their needs, the role unions play is ever more important.


4. Unions are one of the few interest groups that represent middle-class interests


Lastly, across a range of issues, unions represent and advocate for policies central to the middle class. According to research by political scientist Martin Gilens, while most powerful interest groups advocate for policies that predominately benefit their narrowly defined members, relatively few interest groups focus on policies that the middle class supports. All in all, of the 40 interest groups Gilens studied, only eight strongly supported the interests of the middle class, including all five of the unions studied.


Of the organizations that represent middle-class interests, unions are arguably the most important because they advocate for a wide range of issues—from raising the minimum wage to increasing health care coverage and promoting retirement security. Other groups aligned with the middle class, such as universities, generally take positions on a relatively small number of the policy areas Gilens reviewed.


AFL-CIO is much more closely aligned with middle-class interests than the Health Insurance Association (now known as AHIP), the U.S. Chamber of Commerce, and oil companies. In Gilens’ dataset, the AFL-CIO advocated for 301 policy changes compared with the Chamber of Commerce’s 392, oil companies’ 216, and the Health Insurance Association’s 152. Thus, unions help advance numerous major policy changes that are more closely aligned with middle-class interests. At the same time, anti-middle-class interest groups spend significantly more money on lobbying, meaning unions remain an important check on their power. For example, despite their similar range of supported policy changes, the U.S. Chamber of Commerce spent $69.6 million on lobbying in 2023, compared with only $5.2 million by the AFL-CIO.


If the middle class is to regain its policymaking voice and economic strength, reinvigorated unions will be critical in the fight for their interests.


Conclusion


Workers are better off when they have a collective voice: They earn more in the labor market and can better stand up for their interests in democracy. Stronger unions are associated with higher wages and wealth, more engaged citizens, and a stronger middle class. As policymakers strive to make the economy work for everyone, they should be sure to include in their solutions policies that increase worker voice and power. They can start by passing the Protecting the Right to Organize (PRO) Act, the Public Service Freedom to Negotiate Act, and other important reforms—such as those that promote sectoral bargaining—to ensure workers have strong rights, incentives to join unions, and a clear path to collective bargaining. In short, our economic and democratic prosperity rest on rebuilding the strength of unions.


Sachin Shiva is CAP Research Assistant