This is how much the decline in labor unions has cut the pay for all workers
TRADES & UNION DIGEST > Need to Know > Unions advocate for their own members, but they have indirect benefits for nonunion workers

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If labor unions had a stronger presence in the workplace, all workers would see bigger paychecks and better employee benefits, according to new research.

Previous studies have suggested the decline of unions is directly related to an increase in wage inequality, and that affects all employees, according to Tom VanHeuvelen, a sociology professor at the University of Illinois. He has calculated just how much wages may be adversely affected: Nonunion workers would have seen 3% to 7% higher wage growth during their careers if U.S. labor unions were still strong.

“The bottom line is that paychecks would probably be bigger, and paychecks would probably be more secure and reliable, if unions hadn’t declined over time,” he said.

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The number of private workers in unions was almost 11% in 2017, or about 15 million workers, according to the Bureau of Labor Statistics, down from more than 20% (or 17.7 million workers) in 1983, the first year union data was available.

Union membership has plummeted since the 1950s, only recently showing a slight uptick in the last 10 years, according to the left-leaning Economic Policy Institute. Nearly 35% of the country was unionized in 1958, but after 2008 that had dropped to between 10% and 15%. Meanwhile, the share of income going to the top 10% rose drastically during the same timeframe, from around 35% to almost 50%.

International trade and shifts in labor laws have negatively affected unionization, according to the Peterson Institute for International Economics, a nonprofit economic think tank based in Washington, D.C.

International trade and shifts in labor laws have negatively affected unionization, according to the Peterson Institute for International Economics, a nonprofit economic think tank based in Washington, D.C.

Unions advocate for their members, but they also have indirect benefits for nonunion workers, VanHeuvelen found. Unions influence public policies and programs that affect work hours, job security, health care and other social programs for all worker households. He looked at the University of Michigan’s Panel Study of Income Dynamics, which includes data beginning in 1968.

The demise of the labor union has also been linked to a decrease in the number of workers with health insurance and pensions, according to a review of data by John Budd, a professor at the Carlson School of Management at the University of Minnesota. Union decline can explain a quarter of the drop in employees with health insurance between 1983 and 1997, and about 20% to 25% of the decline in pension plans beginning in the 1980s.

Union-controlled pension plans have also been underfunded, partly due to downturns in the market, but also because they’ve been mismanaged. “The employment relationship is modeled as a bargaining problem between stakeholders with competing interests,” Budd wrote. That can result in insufficient wages, dangerous working conditions, disability payments, lost productivity and higher health-care costs, he said.

Nonunion workplaces have adopted committees, grievance procedures, focus groups and employee surveys as a way to listen to employee needs and concerns, according to a report by Anil Verma, director of the Centre for Industrial Relations & Human Resources at the University of Toronto, and published in the Journal of Labor Research in 2005. Non-unionized companies may be taking these steps because they are afraid of employees unionizing or because they simply see it as a “best practice” for a safe workplace, the report said.

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Americans expect workers will fare poorly from a decline in unionization, according to the Pew Research Center. More than half of respondents in a survey said the reduction in union representation over the last two decades is mostly bad for working people, compared to 35% who said it was mostly good.

Democrats were more likely to see the negative effects, whereas Republicans saw more positive effects for workers. A majority (55%) of participants had a favorable view of labor unions, up from 41% in 2011. Still, more than half of participants also have a more favorable view of business corporations (53%) than they did in 2011 (38%).

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