Union ‘effects’ on hourly and weekly wages
June Zaccone
Union ‘effects’ on hourly and weekly wages: A half-century perspective David Blanchflower Bruce V. Rauner Professor of Economics Dartmouth College; Professor of Economics University Of Glasgow Alex Bryson Professor of Quantitative Social Science, Social Research Institute University College London 25 Jun 2024
Union membership across the developed world has been falling for decades. This column uses data on wages and hours worked in the US over the last 50 years to examine whether this has led to a fall in the ‘union wage premium’. The authors find that while the hourly wage premium for union members has fallen notably since the 1970s, the differential in weekly wages has remained large, driven in part by union members working longer hours. This underexplored role of unions is important for the welfare of workers whose consumption is dependent not only on a decent hourly wage, but the offer of sufficient paid hours of work.
Across the developed world the proportion of workers who are union members has been declining for decades (Garnero et al. 2017). Today the rate of membership in the US stands at 33% in the public sector. In the private sector it is 6%, down from 24% 50 years ago.
This decline is perceived by some to be indicative of a shift in bargaining power between employers and workers which has resulted in a decline in labour’s share of income (Summers and Stansbury 2020). Since the root of a union’s ability to bid up wages above the market rate is its ability to call on its members to support its bargaining position and, if necessary, withdraw its labour through strike action, one might expect this decline in union density to have resulted in a secular decline in the union wage premium – the mark up unions achieve over the wage similar workers would get in the absence of the union. But has it? The short answer is no.
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source: nakedcapitalism.com