Thursday, May 22, 2008

The Union pay advantage

It seems so obvious, but still needs to be said: If you're laboring in the lower or middle levels of the Wyoming wage scale, joining a union makes a difference.

New work by economist John Schmitt and others at the Center for Economic and Policy Research refines the common view that union membership benefits the average worker. Schmitt, Margy Waller, Shawn Fremstad and Ben Zipperer discusses the hand unionism has in moving people up the economic ladder.

Their study shows the "disproportionately large benefits of unionization for lower-wage workers."

Nationally, unionization raised the average wage about 11.2 percent. But if you're a Wyoming worker at the lowest end of the Wyoming wage scale, the 10th decile, union membership raised your pay by 23.3 percent. At the 20th decile, union members earned 21.2 percent more than non-union workers.

The study found that the union pay advantage declines the higher up the scale one climbs. At the 90th decile, the pay advantage is just 8 percent — still significant, but less so. At that level, you'd find doctors, lawyers, or other professionals.

Unfortunately, Wyoming has made unionization difficult with its so-called "Right to Work" law. Workers who hire on with a job that has a union are allowed to decline joining the union. They get to enjoy all the benefits, including health care, that the union obtains for workers at that site without paying any union dues.

This is precisely the wrong thing to do if we want to improve the lot of low-wage workers and maintain a good life for those in the middle. Other recent research has shown that Wyoming, like the rest of the nation, is seeing society pulled apart: over the past two decades, those at the bottom of the economic heap have seen their incomes stagnate while those in the top fifth have enjoyed big gains and those in the Top 1 Percent have let the rest of us far behind.

It does not bode well for a state that believes in equal opportunity. People who lose out economically will stop participating politically and eventually become cynical and bitter.


John Schmitt, Margy Waller, Shawn Fremstad and Ben Zipperer, "Unions and Upward Mobility for Low-Wage Workers," Center for Economic and Policy Research Briefing Paper, August 2007.
You can access it here.

Meanwhile, here's the news release we issued jointly with the Wyoming Chapter of the AFL-CIO on May 15:

NEWS from the Equality State Policy Center May 15, 2008

For immediate release

Contact: Dan Neal, 307-258-2783

Sarah Gorin, 307-760-8280

Kim Floyd, 307-214-7845

Unionization Can Boost Family Economic Self-Sufficiency

Wyoming workers see significant wage gains from union membership

A new national study shows that joining a union significantly increases income for low-wage workers, and Wyoming is no exception, according to the Center for Economic and Policy Research (CEPR) and the Equality State Policy Center (ESPC).

The report, “The Union Advantage for Low-Wage Workers,” finds that unionization raises the wages of the typical low-wage worker by 20.6 percent. Unions also have a substantial impact on the wages of workers at the middle and top of the wage distribution, but the report found that the effect for low-wage workers was the largest.

In Wyoming, the effect is even more pronounced. Union workers in the bottom tenth of wage earners earn 26% more than their non-union counterparts; in the next-highest tenth, union workers earn 23% more.

“Higher wages are the key to reducing dependency on public assistance programs, and keep more families from slipping down the economic ladder,” said Dan Neal, ESPC executive director. “Wyoming is a so-called “right-to-work” state, which means we have laws in place to weaken unions – exactly the wrong thing to do if we want to improve the economic status of low-wage workers and maintain a good life for those in the middle.”

Neal pointed to the recent “Pulling Apart” study, which showed a widening gap between the rich and poor nationally and in Wyoming. “In our state, underneath the prosperity of the energy boom, the bottom fifth of income earners gained almost nothing over the past 20 years,” Neal said. “This new study suggests that welcoming unions would extend economic prosperity to more Wyomingites.”

An added bonus is access to health care. “Nearly all union wage agreements include benefits such as health insurance,” said Kim Floyd, executive secretary of the Wyoming State AFL-CIO. “Right now, those of us with insurance are paying more than we need to in order to pay for care for people without insurance. So if we have more union jobs with health insurance, the better it is for our doctors and local hospitals.”

Floyd noted that union membership has grown during the energy boom of the past few years. Federal data show that just under 10% of Wyoming workers are unionized.

“Broader unionization would put more money in workers’ pockets and help everyone in the state,” Floyd said. “On a more personal note, joining a union is one way a person can help ensure greater stability for his or her family.”

State policy-makers could take a few other steps to improve the lot of workers by raising the low minimum wage for tipped employees in Wyoming, which stands at just $2.13 an hour, and by indexing the minimum wage to inflation, ESPC researcher Sarah Gorin said.

The Equality State Policy Center, a broad-based coalition of Wyoming interests, works through research, public education and advocacy to hold Wyoming state and local governments accountable to the people they represent, and to encourage and assist state residents to participate effectively in public policy decision-making.

Dan Neal, executive director, 307-258-2783