Decline in union membership

Download PDF Wages have been stagnant for a generation despite sizable increases in overall productivity, incomes, and wealth.

Decline in union membership

The exception here is among private-sector nonunion women who have a high school diploma or less education.

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For this group, annual median wages for much of the past decades have been relatively flat. And bywomen with only a high school diploma or less education had seen their wages drop below levels that prevailed in Yet these explanations ignore a vital contributing factor: Unions and their effects on wage trends have been studied, but the research focuses on how the shrinking number of private-sector union members reduces the wage gains that accompany membership.

Officially the private-sector unionization rate is 6. The erosion was even larger among men without a college degree, falling from 38 percent to 11 percent. Union membership was not as high among private-sector women as men injust 16 percent, so the drop by to 6 percent was not as severe the fall among non—college graduate women was the same.

As a large body of work documents, unions raise the wages of their members, especially private-sector members, relative to nonunion workers.

Decline in union membership

Thus deunionization—the erosion of the share of workers who belong to a union—has directly contributed to wage stagnation by reducing the fraction of the workforce receiving the union wage premium.

In this report, we take a different approach to the issue of union decline and wages. We contend that unions, especially in industries and regions where they are strong, have indirect effects on wages, helping to establish pay and benefit standards that many nonunion firms adopt.

We begin in for two core reasons.

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First, research documents a sharp increase in earnings inequality starting around Globalization, technological advances, and institutional shifts—most notably the dramatic decline of the U. These developments are intertwined in numerous ways.

For example, union decline reduced resistance to offshoring, and offshoring, or the threat thereof, emboldened employers in union negotiations. We reduce potential sources of bias in various ways, but caution that our interest is in describing population-level trends in wages for various groups of workers.

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Thus while we avoid strict causal claims about wage determination, we believe our various analytical approaches lend confidence to our core contention that private-sector union decline has contributed to wage losses among workers who do not belong to a union.

This is especially true for men and for men who did not complete college or complete or go beyond high school who, as shown in Appendix Table 1, saw the largest erosion of union membership over the last few decades.

Why would nonunion workers benefit from a strong union presence in their labor market? One is through the threat of unionization: For example, Eastman Kodak, the leading producer of photographic film for much of the 20th century, was committed to keeping unions out of its major plants.

Other major nonunion employers monitored union contracts closely in efforts to forestall organizing campaigns. Research has documented how minimum-wage increases benefit workers who earn more than the minimum, through upward wage adjustments.

Research has found that lower-level managers—who, being managers, cannot unionize—benefit from a strong union presence in their surrounding labor market.

Threat effects are one way in which union strength may benefit employees who do not belong to unions. The economic literature on threat effects tends to conceive of unions as an institutional impediment to market pay rates, with employers endeavoring to minimize wages in the absence of unions, and raising them above their market rate only when forced to through collective bargaining or the threat thereof.

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These norms can extend beyond the unionized core of the workforce, affecting nonunion workers whose employers follow the standards that unions help establish. This is especially true in those times and places where organized labor is comparatively strong.Feb 02,  · Union Workers Continue to Disappear in Most States They're least prevalent in the South and places with right-to-work laws.

See how your state compares. Labor unions in the United States are organizations that represent workers in many industries recognized under US labor activity today centers on collective bargaining over wages, benefits, and working conditions for their membership, and on representing their members in disputes with management over violations of contract .

Labor union membership and power in America declined in the late s due to automation and the strengthening economy of the s. The Decline of Union Power Search the site GO. The percentage of workers in the private sector who belong to labor unions has shrunk to percent.

Labor historians report that this is the lowest rate of union membership in America since Union membership rate and share of income going to the middle 60% of families. Aug 30,  · The steep decline in union membership in recent decades has had an outsize effect on the American workforce, tamping down wage increases for nonunion workers, a new study says.

Union Workers Continue to Disappear in Most States