The last decade has produced no improvement in real wages of a broad range of workers, including those with either a high school or college degree. It has also produced a widening divergence between overall productivity and the wages or compensation of the typical worker. In addition, wage inequality has continued to grow between those at the top and those in the middle.
Declining unionization has played a key role in these trends. 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; and limited the “spillover effect” wherein non-unionized firms raise wages and benefits to compete with unionized firms for workers. Together with other laissez-faire policies such as globalization, deregulation, and lower labor standards such as a weaker minimum wage, deunionization has strengthened the hands of employers and undercut the ability of low- and middle-wage workers to have good jobs and economic security.
If we want the fruits of economic growth to benefit the vast majority, we will have to adopt a different set of guideposts for setting economic policy, as the ones in place over the last several decades have served those with the most income, wealth, and political power. Given unions’ important role in setting standards for both union and nonunion workers, we must ensure that every worker has access to collective bargaining.