New Report Suggests Lower Union Participation Linked To Lower Wages

New analysis suggests that the decline in union membership contributed to largely stagnant wages over the past three-plus decades.

A new analysis by a liberal-leaning think tank suggests that the decline in union membership in the U.S. contributed to largely stagnant wages over the past three-plus decades — even for workers that do not belong to a union.

The Economic Policy Institute report argued that pay and benefit standards established through collective bargaining reverberate throughout broader industries because rival, non-union companies need to meet similar thresholds to attract and retain workers.

Those patterns, however, declined as the share of private-sector workers who belong to a union fell from more than 30 percent in the 1950s to just 5 percent today.

The EPI report estimated that weekly wages for non-union men in the private sector would be 5 percent higher if the union participation remained at 1979 levels. An average worker would see an additional $2,704 in annual wages, while the cumulative annual wage loss would be a projected $109 billion.

Non-union, private-sector men without a college degree — whose wages are sharply lower than the 1970s when adjusted for inflation — would see an 8 percent wage increase, or $3,016 per year, if union levels remained the same.

And although the effects were not as pronounced for women, who were less likely to belong to unions in past decades, the report added that their wages would be 2 to 3 percent higher today.

EPI researchers noted that the wage effects attributed to union rates were higher than those blamed on increased trade with lower-wage nations, although globalization and other issues — including technological advancement and educational attainment levels — tend to dominate discussions about lagging wages.

"Rebuilding our system of collective bargaining is an important tool available for fueling wage growth for both low- and middle-wage workers and ending the era of persistent wage stagnation," EPI analysts wrote.

More in Labor