For Immediate Release: Tuesday, June 5, 2012
Contact: Phoebe Silag or Karen Conner, news@epi.org 202-775-8810

From Working Economics, the EPI blog:

Union decline and rising inequality in two charts

by Colin Gordon, Professor of History at the University of Iowa and a Senior Research Consultant at the Iowa Policy Project

One hallmark of the first 30 years after World War II was the “countervailing power” of labor unions (not just at the bargaining table but in local, state, and national politics) and their ability to raise wages and working standards for members and non-members alike. There were stark limits to union power—which was concentrated in some sectors of the economy and in some regions of the country—but the basic logic of the postwar accord was clear: Into the early 1970s, both median compensation and labor productivity roughly doubled. Labor unions both sustained prosperity, and ensured that it was shared. The impact of all of this on wage or income inequality is a complex question (shaped by skill, occupation, education, and demographics) but the bottom line is clear: There is a demonstrable wage premium for union workers. In addition, this wage premium is more pronounced for lesser skilled workers, and even spills over and benefits non-union workers. The wage effect alone underestimates the union contribution to shared prosperity. Unions at midcentury also exerted considerable political clout, sustaining other political and economic choices (minimum wage, job-based health benefits, Social Security, high marginal tax rates, etc.) that dampened inequality. And unions not only raise the wage floor but can also lower the ceiling; union bargaining power has been shown to moderate the compensation of executives at unionized firms. READ FULL BLOG.

Adding to Joe Nocera’s piece: A revival of the labor movement is necessary to preserve our democracy

by Lawrence Mishel, President, Economic Policy Institute

It was good to see Joe Nocera’s column today affirming Tim Noah’s recent call for a revival of the labor movement, saying “if liberals really want to reverse income inequality, they should think seriously about rejoining labor’s side.” I would add that such a revival is necessary to rebuild the middle class and to preserve our democracy.

I’m proud that EPI has provided a lot of great research addressing the role of unions in the economy, ranging from: the impact on firms and competitiveness; the impact on the wages and benefits of union and nonunion workers; the impact on wage inequality; the flawed nature of the current process for choosing union representation; and much more. READ FULL BLOG.