Unions and Low Wage Workers in the US
Unionization Substantially Increases the Wages of Low-Wage Workers
“While all workers benefit from union membership, low-wage workers see largest gains”
For Immediate Release: May 15, 2008
Contact: Alan Barber, (202) 293-5380 x115
WASHINGTON, DC: After decades of disappointing wage growth for many American workers, a new report from the Center for Economic and Policy Research (CEPR) shows that unionization significantly boosts the wages of low-wage workers.
The report, “The Union Advantage for Low-Wage Workers,” finds that unionization raises the wages of the typical low-wage worker by 20.6 percent. Unions also have a substantial impact on the wages of workers at the middle and top of the wage distribution, but the report found that the effect for low-wage workers was the largest.
For the typical U.S. worker –the earner right in the middle of the national pay scale– unionization raises wages about 13.7 percent, about two-thirds of the impact of unionization on the typical low-wage worker. For the typical high-wage worker, joining a union increased pay about 6.1 percent, or less than one-third of the increase for low-wage workers.
“Unionization raises wages for all workers, but unions have by far the biggest impact on the wages of the lowest-paid workers,” said John Schmitt, a Senior Economist at CEPR and the author of the study.
The disproportionate impact of unions on low-wage workers also holds across the 50 states and the District of Columbia. In each state, the union premium was substantially larger for low-wage workers than it was for middle- or high-wage workers.
“Unions give the biggest boost to low-wage workers because these are the workers that have the least bargaining power in the labor market,” Schmitt said. “Unionization has a large and measurable impact on the bargaining power, and therefore the wages, of low-wage workers.”
Over the period covered in the report, 13.8 percent of American workers were either members of a union or covered by a union contract at their workplace. Over the same period, the unionization rate varied widely across the United States, from 3.9 percent in North Carolina to 26.4 percent in New York.