Unionization Would Boost Economy

Published on political affairs.net pa, by Joel Wendland, Feb 24, 2009.

Joining a labor union provides the most direct path to improving a worker’s standard of living. If done on a large enough scale, unionization could help revive the entire US economy, a chorus of voices have argued recently.

In a recent telephone conference to discuss the economic benefits of unionization with reporters last week, former Labor Secretary Robert Reich said, “One big reason we’re in the crisis that we’re in is that consumers have run out of money.”

Median wages dropped over the course of the past decade, making the period after the 2001 recession the first time ever that working-class wages have fallen during a an economic recovery, Reich noted …

… Union benefits:

Reich’s comments introduced a new report by the Center for American Progress Action Fund on the economic benefits of unionization. The report shows that at the peak of union density in the late 1970s, workers saw growth in wages and the value of benefits proportional to the increase in their productivity. Over the last two-plus decades as union membership has declined, however, productivity has steadily grown, while workers have reaped fewer financial benefits.

“If unionization rates were the same now as they were in 1983 and the current union wage premium remained constant, new union workers would earn an estimated $49.0 billion more in wages and salaries per year,” the report’s authors, David Madland, Director of the American Worker Project, and Karla Walter, Policy Analyst, noted. “If union coverage rates increased by just five percentage points over current levels, newly unionized workers would earn an estimated $25.5 billion more in wages and salaries per year.”

Union members earn an average of about 30 percent higher in wages, are 59 percent more likely to have health benefits and 54 percent more likely to have retirement benefits. Union membership also sharply reduces inequalities in wages and benefits by gender and race.

Beth Shulman, co-director of Fairness Initiative on Low-Wage Work, said that in working with low-income workers, she discovered that as workers joined unions they quickly saw higher incomes, better health care benefits and a sense of dignity and empowerment in the workplace.

“At the end of the day, having a union for millions of workers across the country really is the difference between having a decent wage and impoverishment,” Shulman pointed out. Unions also make a huge difference for communities by raising standards of livings and providing a tax base for improved public services, she added.

Think tanks like the Center for American Progress Action Fund are working closely with labor organizations like the AFL-CIO, SEIU and American Rights at Work to release a series of reports with state-by-state analysis of the benefits to working families that would come as a result of higher rates of unionization. (full text).

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