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New Study Shows Decline of Union Power Causing Wage Inequality

Sept. 6, 2016
Study says real wages for private-sector workers barely have risen over the past three and a half decades, in contrast with the post-World War II period when workers saw greater pay increases.

Union bargaining power has been on a steady decline for decades and nonunion workers’ wallets are feeling the effects, according to a new study.

Private-sector men, in particular, are seeing lower wages and benefits as unionization continues to decline.

“The analytical approaches summarized in this report enable us to assess the independent effects of union decline on wages and lend confidence to our core contention that private-sector union decline since the late 1970s has contributed to substantial wage losses among workers who do not belong to a union,” the report’s executive summary stated.

The report was authored by Jake Rosenfeld, associate professor of Sociology at Washington University, Patrick Denice, postdoctoral research associate at Washington University and Jennifer Laird, postdoctoral research scientist at the Center on Poverty and Social Policy at Columbia University.

Key findings detailed in the study include:

  • The study says weekly wages for nonunion private-sector men wages would be an estimated 5 percent higher, if the share of workers in similar industries and regions who are union members had stayed at its 1979 level, meaning an annual wage loss of $2,704 for nonunion workers.
  • Private-sector men who do not have a college degree (bachelor’s degree or more) would make an estimated 8 percent more if unions had maintained the same influence as they had in 1979, equating to a yearly annual wage loss of $3,016.
  • Men with a high school diploma or less would earn 9 percent higher, or about $3,172 given the same circumstances.

Unions did not have as much of an impact on women based on the study’s results because they were not as involved in unions in 1979. However, for 32.9 million full-time nonunion women working in the private sector, weekly pay would be a total of $461 million in 2013 if unions had remained as strong as they were in 1979, according to the study.

“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 benefitting from unionization,” Rodenfeld, Denice and Laird state in the report summary. “Rebuilding our system of collective bargaining is an important tool available for fueling wage growth for both low- and middle-wage workers and ending the era of persistent wage stagnation.”

To read more about the study, click here.

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