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Fewer Workers in Unions = Growing Income Inequality

The U.S. public is painfully aware of the growing income inequality in this nation.

Now, a new report shows a big reason why the gap is growing: fewer workers in unions.

Declining unionization was responsible for roughly one-third of the growth of wage inequality among men from 1973 to 2007, a new Economic Policy Institute (EPI) report finds. Declining unionization can explain roughly one-fifth of the growth of wage inequality among women over the same period (click to enlarge chart).

As the study points out, income inequality has increased not only because union members earn higher wages and have better retirement and health coverage, but with fewer union members, nonunion employers feel less pressure to raise wages and provide family-supporting benefits.

The percentage of the workforce represented by unions was stable in the 1970s but fell rapidly in the 1980s and continued to fall in the 1990s and the early 2000s, a period that corresponds to the nation’s growing income inequality.  

EPI’s upcoming "The State of Working America" report, to be released Sept. 11, includes more on this study. (Read more previews from EPI's biannual report.)

  • The union wage premium—the percentage-higher wage earned by those covered by a collective bargain­ing contract—is 13.6 percent over­all (17.3 percent for men and 9.1 percent for women). 
  • Unionized workers are 28.2 percent more likely to be covered by employer-provided health insurance and 53.9 percent more likely to have employer-provided pensions. 
  • From 1973 to 2011, the share of the workforce represented by unions declined from 26.7 percent to 13.1 percent.

Much of the decline in union membership stems from employers' war on workers and their unions, a refrain echoed loudly this week at the Republican National Convention. 

Chris Tilly, director of the UCLA Institute for Research on Labor and Employment, writes today:

It's U.S. employers who have perfected the art of the anti-union campaign, in which they ratchet up the tension, one-sided arguments and flat-out intimidation to the point where most workers will vote "no union" just to end the discord. Unfortunately decades-old U.S. labor laws do little to curb such tactics.

Big Business works hand in glove with its political puppets to quash the ability of workers to gain a voice at work because the union movement is one of the few forces that have the ability to politically challenge billionaire bankers through our grassroots mobilization efforts.

But Big Business and the billionaires who fund extremist politicians need to understand this, Tully writes:

It’s anti-American to be anti-union.

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