As union membership has declined, wage inequality has grown
In his new report, Unions, inequality, and faltering middle-class wages, EPI President Lawrence Mishel finds that as union membership has declined, wages for middle-class workers have suffered. Declining unionization was responsible for roughly a third of the growth of wage inequality among men from 1973 to 2007 and about twenty percent of the wage inequality among women. Mishel noted that “it’s important to take into account the impact of collective bargaining on wage and benefit standards for all workers.”
A lost decade of income growth for working-age families
This week’s Economic Snapshot charts the median income of working-age families from 1975 to 2010. It shows that the poor labor market performance of the last decade prevented their income from recovering its 2000 peak during the recovery and expansion following the 2001 recession. The median income of these families then fell precipitously following the onset of the Great Recession, declining more than 7 percent ($4,926) between 2007 and 2010.
In the news
CNNMoney’s Tami Luhby reported how the decline of union membership has “been a key driver of income inequality in recent decades,” citing EPI’s latest research.
In a guest piece for Salon, writer and radio host David Sirota also delved into the impact of declining unionization. He wrote, “As the Economic Policy Institute documents, unions not only help their own members, they set industry-wide standards. So when unions lose ground, all workers lose out.”
Kansas City Star business columnist Diane Stafford wrote, “Real wages have stagnated over the last decade partly because of dwindling collective bargaining power, according to an analysis released Wednesday by the Economic Policy Institute.”
US News and World Report’s Danielle Kurtzleben referenced EPI’s research to detail how the U.S.-China trade deficit has negatively affected U.S. workers. “There are roughly 5.1 million fewer American manufacturing jobs now than at the start of 2001. And China is to blame for more than one-third of that loss,” she wrote.
And EPI labor economist Heidi Shierholz explained to Washington Post business reporter Peter Whoriskey that while the labor market is steadily improving, displaced workers still face difficult odds.