AUGUST 30, 2016 -
A new report from the Economic Policy Institute shows that private-sector union decline has contributed to substantial wage losses among workers who do not belong to a union.
Washington University sociologist Jake Rosenfeld and co-authors find that the dramatic decline in union density since 1979 has resulted in far lower wages for nonunion workers, an impact larger than the 5 percent effect of globalization on their wages found in recent research.
Specifically, nonunion men lacking a college degree would have earned 8 percent, or $3,016 annually, more in 2013 if unions had remained as strong as they were in 1979.
Between 1979 and 2013, the share of private sector workers in a union has fallen from about 34 percent to 11 percent among men, and from 16 percent to 6 percent among women. The authors note that unions keep wages high for nonunion workers for several reasons: Union agreements set wage standards and a strong union presence prompts managers to keep wages high in order to prevent workers from organizing or their employees from leaving. Moreover, unions set industry-wide norms, influencing what is seen as a “moral economy.”
This is the first study providing a broad estimate of the wage decline for nonunion workers as the result of the erosion of unions.
This decline in unions has eroded wages for nonunion workers at every level of education and experience, costing billions in lost wages. For the 32.9 million full-time nonunion private sector women and 40.2 million full-time private sector men, there is a $133 billion loss in annual wages because of weakened unions.
Scroll down to Additional Resources for additional articles on the EPI study.