Decline Of US Wages Tied To Decreases In Union Membership
(MintPress) — Many GOP lawmakers promote an anti-labor agenda, believing that unions negatively influence relations between workers and management. However, a new study finds that unions are necessary in ensuring equal bargaining power as well as a more equitable distribution of corporate profits.
The non-partisan study by the Economic Policy Institute shows that decreases in the wages of American workers are tied to declines in union membership. The report, “Unions, Inequality, and Faltering Middle Class Wages,” shows that since the early 1970s, workers have seen a real decline in wages, tied directly to diminished bargaining power and increasing upward movement of corporate profits to CEOs and management.
As many companies continue to thrive while offshoring production through free trade agreements, unions continue to lose much of their effect because of non-unionized global competition. Free trade agreements often receiving robust bipartisan congressional support contribute to this decline as well.
The lost decade
From 1973-2011 the real wage of workers rose just 10.7 percent. The bulk of these gains occurred during the Clinton years when the U.S. economy was experiencing strong growth. However, from 2002-2011, wage growth remained stagnant, representing what economists call “a lost decade” for worker’s wages.
The report asserts, “This has made the last decade a ‘lost decade’ for wage growth. This last decade has been characterized by increased wage inequality between workers at the top and those at the middle, and by the continued divergence between overall productivity and the wages or average compensation of the typical worker.”
However, workers who are unionized still earn significantly more than their non-unionized peers. Unionized male workers earned around 17 percent more than those without union representation while union women enjoy wages 9 percent higher on average.
The divide in health benefits is noticeable as well. In fact, 83.5 percent of union workers have health insurance according to the study while just 62 percent of non-union workers enjoy the same benefits.
While the workers belonging to unions generally enjoy higher wages, health care benefits and improved bargaining power, the deregulation of markets, coupled with an increasingly globalized marketplace has diminished the strength of workers significantly.
The decline of unions
These forces, the Economic Policy Institute study asserts, have led to a marked decline in union membership for American workers over the past 40 years. In 1973, 26.7 percent of the U.S. workforce was unionized compared to just 13.1 percent last year.
The report finds, “This falling rate of unionization has lowered wages, not only because some workers no longer receive the higher union wage but also because there is less pressure on nonunion employers to raise wages; the spillover or threat effect of unionism and the ability of unions to set labor standards have both declined.”
With diminished bargaining power, the study also finds that blue collar workers have experienced little to no growth in their salaries when adjusted for inflation and cost of living increases.
Over the same time, however, the top 1 percent of income earners saw tremendous gains. A report by the Congressional Budget Office released October 2011 found that the top 1 percent of wage earners saw a substantial 275 percent increase in their share of national income over the past three decades.
All other income groups, especially lower income groups, experienced declines in real wages over the course of the study, 1979-2007. While there are many factors contributing to this, including tax breaks for wealthy Americans, declines in union membership have contributed to a more unequal distribution in wealth.
Attack on labor and union lobbying
Despite strong evidence suggesting that unions help to create a more equal distribution of wealth, many lawmakers have made a concerted effort in recent years to break the bargaining strength of labor by supporting right to work legislation and nullifying collective bargaining rights.
The Wisconsin Act 10 signed into law last year was one of the biggest blows to organized labor in recent years. The legislation supported by Republican Gov. Scott Walker directly hindered workers’ ability to collectively bargain. Additionally, the measure cut compensation, retirement, health insurance and sick leave for public sector employees.
Many Democrats, previously stalwart defenders of labor, have retreated some from their previous robust support of unions. However, in an important move earlier this month, the Democratic National Committee (DNC) decided to move the Party’s funds from Bank of America to Amalgamated Bank, the only unionized banking institution in the U.S.
Although corporations continue to outspend labor unions 10 to 1 in national elections, critics maintain that labor unions are part of the corrupting influence in U.S. politics, donating large sums of money to influence the outcome of elections.
According to the non-partisan Center for Responsive Politics, unions reported $1.1 billion in spending to the Federal Elections Commission (FEC) between 2005 and 2011. This money was taken from union coffers and given to political action committees (PACs) on behalf of pro-labor candidates running for office.
According to a special report published last month by the Wall Street Journal, these donations are approximately four times higher than previously estimated.
While this money is spent to represent the interests of millions of workers, critics believe that unions benefit from the same unpopular Citizens United Supreme Court ruling, allowing corporations and wealthy individuals to spend virtually unlimited sums of money to influence the outcome of elections.
The 2010 Citizens United Supreme Court case declared corporations, labor unions and other entities to be “human beings.” As such, they are afforded the same rights to spend money to support candidates and parties in elections.
While the majority of Americans continue to support comprehensive campaign finance reform, unions, while an imperfect and sometimes corrupt bargaining entity, still serve an important function in creating a more balanced relationship between management and workers.
The study concludes, stating, “Today, about 13 percent of workers are in unions—roughly half the share of the early 1970s. This reduction has limited the number of jobs with union wage and benefit premiums; weakened workers’ power to bargain for higher wages, more comprehensive benefits, and better working conditions.”
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