EPI: Deunionization Tracks Wage Declines For Non-Union Men

Mark Gruenberg

Mark Gruenberg Editor, Press Associates Union News

In the 1950s and 1960s, Eastman Kodak bestrode the international camera market. It paid high wages, but for a particular reason: To prevent its workers from unionizing.

Kodak was headquartered in Rochester, N.Y., in the nation’s most highly unionized state. Many surrounding companies in and around its upstate New York plants were unionized.

So to keep unions out – and to keep its workers after it trained them -- Kodak paid union wages, or close to them.

That “union advantage” for non-union workers, too, was replicated in wages all over the country, a new Economic Policy Institute report says. But with the decline in private sector union density since 1979, it’s disappeared.

Indeed, EPI adds, the figures now show wages running in reverse, and especially for non-union men with high school diplomas or less.

Analyzing federal wage data from 1979 through 2013, EPI reports overall wages for all non-union men would have been 5 percent ($52 weekly) higher in 2013 than they are had private-sector union density stayed unchanged in the 34-year period. Instead, it declined from more than 20 percent to the current 6.7 percent.

“For a year-round worker, this translates to an annual wage loss of $2,704,” economists Jake Rosenfeld, Jennifer Laird and Patrick Denice reported. “For the 40.2 million non-union private-sector men the loss is equivalent to $2.1 billion fewer dollars in weekly paychecks.”

The drop was even more, 8 percent, for non-union men with a high school diploma or less, their report adds. When added to 5 percent wage losses due to migration of blue-collar jobs overseas – a migration that de-unionization in the U.S. helped accelerate – the non-union men without college education lost 13 percent of what they would have earned.

Women workers suffered less of a decline – 2 percent-3 percent compared to what they would have earned -- because fewer women were in the workforce in the 1950s and 1960s, the height of unionization in the U.S. But there still was a wage premium for non-union working women, thanks to unionized firms’ proximity those years, too. As a result, the non-union women lost $461 million in wages due to the decline in union density, the analysts calculated.

“Earlier research shows union erosion can explain about one-third of the growth of wage inequality among men and about one-fifth of the growth of wage inequality among women from 1972-2007. At least for middle-wage men, the impact of the erosion of unions on the wages of both union and non-union workers is likely the largest single factor underlying wage stagnation and wage inequality,” the researchers state.

“Nonunion workers benefit from a strong union presence in their labor market in many ways. Strong unions set pay and benefits standards that nonunion employers follow. Those employers may raise pay for some workers to forestall an organizing drive, which leads to an upward adjustment in wages of workers above them, to maintain relative pay differentials.”

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Posted In: Allied Approaches, From Press Associates

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