Monday, August 8, 2011

Why the Health of Unions Should Matter to Non-Union Workers

 Boycott Poster, circa 1898

It is always a little disconcerting when I hear middle-class friends and acquaintances complain about the fact the unionized public workers are getting a free ride on benefits and pensions while they have to pay out of their salaries for some or all of the same benefits.  It is as if the benefits received by the public workers are only connected to the lives of non-union members on April 15th.

It should be intuitively obvious that union wages and benefits have an impact on the wages and benefits paid to non-union members.  I know that has to be the case in the market for talented legal secretaries and para-legals.  The wages and benefits we offer in my firm are a function of a highly competitive marketplace, which includes a large number of unionized state legal specialists.

Now a couple of sociology professors at Harvard and University of Washington have attempted to prove the connection in a study that seeks to quantify the effects of unionization on income inequality since the early 1970's. The study published in the August issue of American Sociological Review is by Bruce Western and Jake Rosenfeld.  The authors use a regression analysis model incorporating census data that tries to account for both individual membership in unions as well as overall unionization rates in specific industries and regions. The study controls for age, education,  race, and gender, allowing the researchers to estimate the effect of unionization between groups and within groups.

Josh Harkinson describes the study in a blog post at Mother Jones.

Money Quotes:
It's well known that the death of America's labor unions coincides with a staggering rise in income inequality, though the link between the two has never been as obvious as it seems. Many academics argue that unions play a relatively minor role in the equation, instead blaming educational disparities and the shifting makeup of the economy. But now comes a major new study from Harvard sociology professor Bruce Western that suggests that the decline of unions is as important as any other factor, explaining a full third of the growth in of income inequality for male workers.
Their paper in the August issue of the America Sociological Review concludes that deunionization's biggest effects on inequality were indirect:
1) The threat of unionization caused non-unionized employers to raise wages; that threat disappered along with unions.
2) Unions occupied a bully pulpit; knocking them off left the moral case for equality vulnerable to attack. (What do you mean Viacom's CEO isn't worth $85 million?)
3) Workers lost their Washington lobbyists, and with them, any hope of winning political battles for better wages and benefits.
These ideas are nothing new. Kevin Drum ably explores them in his March/April Mother Jones essay, "Plutocracy Now." Yet the Harvard study bolsters them with a rigorous regression analysis of census data, showing empirically what many pundits have long suspected. "Our study underscores the role of unions as an equalizing force in the labor market," Western says. If only proving their importance was as easy as figuring out how to replace them.

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