Collective Bargaining and the Fight Against Income Inequality
By Lee Saunders, President of AFSCME, and Lawrence Mishel, President of the Economic Policy Institute
It’s the most pressing economic challenge of our time. While the economy has grown overall during the last 35 years, the average worker is still looking at the same slim paycheck. It’s called wage stagnation, and it’s the driving force behind income inequality. Since 1979, productivity — the nation’s output of goods and services per hour worked — grew by 64 percent. Meanwhile, the inflation-adjusted hourly wage of the typical worker rose by just 6 percent.
How do we get better wages? Union members know the answer — we bargain for a raise. Union members earn 13.6 percent more than their nonunion counterparts, even when we adjust for characteristics like age and education. Unionized workers are also 28.2 percent more likely to be covered by employer-provided health insurance, and 53.9 percent more likely to have employer-provided pensions. Collective bargaining combats wage inequality by raising the wages and benefits the most for the lowest-wage workers. And it works to reduce other forms of inequality as well. African-American, Asian, Hispanic and immigrant workers who are union members are more likely to receive equitable pay. It also helps to close the wage gap between men and women.
But in the last few decades we have seen unprecedented attacks on collective bargaining rights. The erosion of collective bargaining is the single largest factor behind the stagnation of middle-class wages. As union membership rates declined, the share of income earned by middle-class households declined, too. This trend explains one-third of the gap between rich and poor men, and one-fifth of the gap among women.
Big business has been cracking down on the unions in an effort to consolidate their power over workers and increase their profits. We are seeing more and more coercive and punitive tactics designed to intensely monitor and punish union activity, including plant closing threats and actual plant closings, terminations, harassment, disciplinary actions, surveillance, and altering benefits and working conditions.
Public policy is now on the side of the union-busters. Billionaires and CEOs have come together to push legislation that would weaken and destroy public sector collective bargaining. Just a few years ago, Gov. Scott Walker pushed through Act 10 in the state of Wisconsin, effectively ending collective bargaining for public workers in his state. Other politicians followed suit, working diligently to pass similarly extreme laws.
These policies do not reflect the will of the people. In Ohio in 2011, an overwhelming majority of voters rejected extreme attacks on the state’s public sector bargaining law and there is evidence that most Americans support unions and would join one if they could. Polling in 2005 showed that a majority of nonunion, non-managerial, workers would vote for union representation if they had the chance. That’s a big increase since the mid-1980s, when polls suggested that roughly 30 percent of that group would have voted for union representation.
Support for unions is growing as workers become frustrated with stagnant wages and limited bargaining power. In fact, in 2014, AFSCME grew its membership by 92,155 by training member activists how to organize. It’s clear that it’s time for a change. Candidates in the Republican Presidential primary are already positioning themselves as union buster-in-chief. But with the growing support for collective bargaining combined with the pressing concerns middle-class voters feel every day when it comes to their wages that haven’t kept up with the cost of living, they would be wise to reconsider this position. Candidates should compete to see who can give the strongest support to collective bargaining — the most important tool to combat wage stagnation and inequality.
For more about the benefits of collective bargaining, to union members and non-union workers alike, read the Economic Policy Institute’s latest fact sheet.