Study: Yep, Unions Made America Great

As union membership in America has declined, economic inequality has risen. New research confirms the obvious: It ain’t a coincidence. Unions are the tools that built America’s “golden age.”

The new research paper, by economists at Princeton and Columbia universities, draws on Gallup and other polling data reaching back to the 1930s. This allows them to extend backwards by four entire decades the period during which they have access to specific “micro data” about the makeup of union membership in America. The additional mountain of data, in turn, allows them to explore in unprecedented detail the connection between union membership and economic inequality—the most persistent plague of the past half century of American life, from which many of our political problems cascade.

Their research finds that “in their effect on household income, unions have exhibited remarkable stability over the past eighty years.”: Union members have seen wages between 10 and 20 percent higher than non-union members, with less educated workers seeing the greatest benefits. They are able to focus in particular on what they call the “Great Compression” era, from about 1940 to 1970, when U.S. union membership was highest, and economic inequality was at its lowest. (Union membership peaked in the years immediately after WWII, when more than one in three workers was part of a union. Today, it’s more like one in 10.)

In all, the new information adds to the already strong case that unions are one of the most effective tools that exist for keeping inequality to a minimum. The decline of unions was a strong contributing factor to the rise of inequality that has defined our lifetimes.

We show that a combination of low-skill composition, compression, and a large union income premium made mid-century unions a powerful force for equalizing the income distribution. As unions have receded, it is perhaps surprising… that relatively skilled workers are the ones that remain. This pattern mimics the pre-World War II era, when unions were both small and their members relatively skilled. Our results show that over the last nine decades, when unions expand, whether at the national level or the state level, they tend to draw in unskilled workers and raise their relative wages, with significant impacts on inequality.

If we could significantly increase union membership in America, the benefits of unions would be extended to many more low-wage, less educated workers—the workers who need the help the most, and who, research shows, derive the greatest benefits from union membership.

Without a union, the boss and the investors get the extra money that the workers would otherwise get. There is no rational argument against unionizing everybody in sight.