Report: Union Membership Helps Low-Wage Workers Move Up the Ladder

by James Parks, May 15, 2008

Wages for low-income workers, such as food service employees, get a boost when workers join a union.

A new report emphasizes the importance of a union contract for workers at every level, especially low-wage workers. 

The report, The Union Advantage for Low-Wage Workers, released today by the Center for Economic and Policy Research (CEPR), shows that union membership boosted the wages of workers on the bottom rung of the wage ladder (the 10th percentile) by 20.6 percent, from 2003 to 2007. For a worker at the 20th percentile, who earns less than 80 percent of the workforce, the boost from being a union member is 18.9 percent and for the average worker at the 30th percentile, the union benefit is 16.8 percent.    

AFL-CIO President John Sweeney says:  

For millions of workers who work hard and take home less to show for it, being part of a union that provides a say on the job is all the more important. This study proves that for workers on the bottom rungs of the pay scale, bargaining power is the best, and often only, means to gain a leg up to the middle class.   

While the effect was strongest for workers who earned less, the study also showed that belonging to a union substantially raises the wages for all workers—including those whose earnings were in the middle and top of the wage distribution. The typical worker—the earner right in the middle of the national pay scale—saw his or her wages raised by 13.7 percent.    

Figures in the CEPR report differ from the more frequently used numbers by the U.S. Department of Labor’s Bureau of Labor Statistics (which show a 30 percent union wage benefit) because the CEPR report controls for other worker characteristics, including age, gender, location, education and industry. But the bottom line is that no matter how you count it, being a union member means better wages. 

Economist John Schmitt, who authored the report, sums it up this way:

Unions give the biggest boost to low-wage workers because these are the workers that have the least bargaining power in the labor market. Unionization has a large and measurable impact on the bargaining power, and therefore the wages, of low-wage workers.   

The CEPR report also analyzes the union difference in each of the 50 states and the District of Columbia. Across the board in every state, union members earn more than nonunion members. Click here to read or download the report.

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