Unions help narrow the gender wage gap

Tuesday, April 4th is Equal Pay Day— the day that marks when a typical woman’s earnings catch up to what a man earned in the previous year. The gender wage gap is a measure of pay disparity between men and women. The research is conclusive: gender wage gaps exist across the wage distribution and among workers of every education level. The median woman worker (that worker in the exact middle of the distribution of women’s wages) is paid 83 cents for every dollar that the median man is paid. Among workers who have a college degree or advanced degree, the gap is even larger, with women being paid only 73 cents on the male dollar. Women of color face dual penalties of racial and gender-based pay gaps; black and Hispanic women are paid only 65 cents and 59 cents on the white male dollar.

Closing the gender wage gap is essential to helping women achieve economic security. We should use all the tools available to combat the factors contributing to pay disparities. Some of these tools include establishing standardized rates of pay, requiring more transparency in compensation data, strongly enforcing antidiscrimination laws, and allowing workers to earn additional benefits such as paid sick and family leave, which help enable workers to balance demands at home and at work.

For the vast majority of women, true economic security and a fair share of the economy’s growth will require combining progress in closing gender-based pay disparities with progress in linking their wage growth to economy-wide productivity growth, a linkage that has been severed in recent decades. The levers that will allow the wages of the vast majority of both men and women’s wages to benefit from overall economic growth include allowing the economy to reach and stay at genuine full employment, and raising labor standards such as updating the minimum wage and the overtime threshold.

One promising way to address both gender-specific disparities and the broken link between all typical workers’ pay and economy-wide productivity growth is through the resuscitation of collective bargaining. Unions have been proven to provide women with higher wages and better benefits. As shown in the figure below, working women in unions are paid 94 cents, on average, for every dollar paid to unionized working men, compared with 78 cents on the dollar for non-union women as a share of nonunion men’s dollar. Furthermore, hourly wages for women represented by unions are 23 percent higher than for nonunionized women. Unions provide a boost to women regardless of their race or ethnicity. The gender wage gap is significantly smaller among both white and black unionized workers than their nonunion counterparts. Unionized workers are also more likely to have access to various kinds of paid leave, from paid sick days, vacations, and holidays to paid family and medical leave, enabling them to balance work and family obligations.

Figure A

Women's hourly pay as a share of men's hourly pay, by union status, overall, by race and ethnicity, and regression adjusted, 2016

Demographic Union  Nonunion 
All 94% 6% 78% 22%
White 94% 6% 76%  24%
Black 100%  0% 88%  12%
Hispanic 88%  12% 84%  16%
Regression-adjusted 82%  18% 78%  22%
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Notes: Economic Policy Institute (EPI) analysis of CPS ORG hourly wage data for workers age 18 to 64. The union coverage are workers covered by a collective bargaining agreement. The regression-based gap controls for gender, race and ethnicity, education, experience, and geographic division. The log of the hourly wage is the dependent variable.

Source: EPI analysis of Current Population Survey Outgoing Rotation Group data

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Of course, there are many reasons besides the simple fact of unionization why higher relative pay and unionization might go together for women. To take one example, probably the single-largest group of unionized women in the United States is public school teachers. This is also an extraordinarily well-educated group of workers, so this educational attainment alone might boost their wages. To control for such influences, the last set of bars in the figure represents the regression-adjusted gender wage gap for union and non-union workers. In addition to race and ethnicity, this model also controls for education, experience, and geographic region. Controlling for these other variables reduces the estimated union/non-union differential in the gender wage gap, but it certainly does not make it go away, and the remaining gap is both economically and statistically significant.

The relationship between unions and narrower gender wage gaps makes sense if you consider that collective bargaining agreements often establish many of the policies proven to combat gender pay disparity. For example, collective bargaining agreements may standardize wage rates, promote pay transparency, and include grievance procedures for workers who have been discriminated against. These are all ways of combatting the gender wage gap. Setting clear standards of pay can help eliminate or diminish the effects of gender discrimination. Pay transparency gives workers more information about what similar workers are paid and whether they are being undercut. Far too often, women and workers of color lack sufficient information about their peers’ pay to even know whether they are being paid fairly. Providing workers with access to effective grievance procedures can help to ensure that antidiscrimination provisions are enforced.

Despite the clear benefits of collective bargaining for women workers— and their male colleagues—unions have been under increasing attack. Since 2010, legislators in more than twenty states have introduced so-called “right-to-work” bills barring unions from requiring workers in the private sector who are represented by unions to pay the equivalent of union dues. Congressional Republicans have also introduced national “right-to-work” legislation in both chambers and President Trump is said to be supportive. These laws undermine collective bargaining. It is not surprising that research shows that both union and non-union workers in right-to-work states have lower wages and fewer benefits, on average, than comparable workers in other states. This is particularly bad for women workers.

In 2011 and 2012 alone, over a dozen states passed laws restricting public employees’ collective bargaining rights. Private employers, too, have intensified their opposition to collective bargaining. During the union election process, it is standard practice for workers to be subjected to threats, interrogation, harassment, surveillance, and retaliation for union activity. The results of anti-union efforts can be seen in the most recent Union Members Survey from the Bureau of Labor Statistics showing that union membership was down 0.3 percent in 2016 to 6.4 percent of private sector workers.

This decline does not reflect the preferences of American workers. The majority of American workers would vote for union representation if they could. Instead it reflects the intensity with which employers have opposed organizing efforts, and the continuing tilt of the legal and policy playing field against workers seeking to bargain collectively. So, this Equal Pay Day we should also look at ways to expand collective bargaining. Policymakers should amend the National Labor Relations Act (NLRA) to strengthen protections for working people who organize. Last Congress, Democrats introduced the Workplace Action for a Growing Economy (WAGE) Act that included many important reforms. Specifically, the legislation would put an end to the financial incentives for employers to interfere with workers’ rights by allowing the National Labor Relations Board to impose financial penalties and to force companies to the bargaining table when their violations prevent a fair union election. Given the positive effect collective bargaining has on closing the gender wage gap, strengthening workers’ ability to form unions should play a prominent role as we work for these reforms this Equal Pay Day.