The role of unions for promoting the development of a vital middle class in America should not be forgotten. Here’s a graph depicting the relationship of percent of union membership in the workforce and middle class household income share. (I define middle class as the share of aggregate income received by the third-fifth — 60th percentile).
There’s a direct relationship between percent of union membership in the labor force and middle class share of aggregate income.
Inspired by the work of Western and Rosenfeld (2011), here’s a second way of examining the data.
As union membership declined so did middle class income share.
The Bureau of Labor Statistics concludes, “Union workers continue to receive higher wages than nonunion workers and have greater access to most employer-sponsored employee benefits; during the 2001–2011 period, the differences between union and non- union benefit cost levels appear to have widened.”
The BLS also finds the wage premium for union workers is on the average 23%. On the question of benefits: 94% of private-sector union members have access to health-care benefits, versus 67% of nonunion members. And employers cover on average 83% of health insurance premiums for union members and their families versus 66% for nonunion members. Union members are also more likely to get paid vacation and sick time and retirement and life insurance benefits.
A National Women’s Law Center analysis reveals the wage gap among union members is half the size of the wage gap among non-union workers and female union members earn over $200 per week more than women who are not represented by unions—an increase that represents a larger union premium than men receive.
Finally, a study, reported in the August 2011 issue of the American Sociological Review, examines the relationship between the decline in union membership and the rise in wage inequality. More specifically the authors of the study, Bruce Western, a professor of sociology at Harvard University and Jake Rosenfeld, a professor of sociology at the University of Washington, decompose wage inequality, focusing on partitioning wage inequality due to the decline in private union membership.
Accounting for the decomposition of wage inequality Western and Rosenfeld find deunionization explains a third to a fifth of the growth in inequality, which approximates the comparable effect of growing stratification in wages by educational achievement. The effect of declining union membership is striking, having a greater effect on wage inequality among men compared to women. The gender effect is consistent with the large decline in private sector union membership among men.
Data Source for Graphs
Table H-2. Share of Aggregate Income Received by Each Fifth and Top 5 Percent of Households. U.S. Census Bureau.
Western, Bruce and Rosenfeld, Jake. (2011). “Unions, Norms, and the Rise in U.S. Wage Inequality.” American Sociological Review. 76(4).