Union membership has been declining across the developed world for decades. In the US, the rate of union membership stands at 33% in the public sector and 6% in the private sector, down from 24% 50 years ago [656f14f3]. Despite this decline, the hourly wage premium for union members has fallen notably since the 1970s, but the differential in weekly wages has remained large, driven in part by union members working longer hours [656f14f3].
A study conducted by Alessio Piccolo, assistant professor of finance at IU Bloomington, found that strong unions can help create economic stability by reducing the risk of unemployment for both union and non-union workers [54b3ce3a]. The study revealed that firms with strong unions tend to substitute riskier short-term debt with safer long-term debt, which helps them stay financially flexible during strikes and other adverse economic effects [54b3ce3a].
On the other hand, the study also found that the introduction of right-to-work laws led to significant increases in riskier borrowing by companies, which could have contributed to higher unemployment rates during the 2007-2009 financial crisis [54b3ce3a]. This suggests that the relationship between unions and financial stability is important in discussions about right-to-work laws and U.S. labor policy [54b3ce3a].
The study was co-authored by Carlos Avenancio-Leon at the University of California San Diego and Roberto Pinto at Lancaster University in the United Kingdom [54b3ce3a].
Recent research shows that unions improve worker safety and lower health inequality, reduce racial wage gaps, increase support for policies benefiting Black Americans, improve financial stability, protect against wage theft, and can mitigate stagnant wages and inequality [3b8626a5]. This research highlights the multiple benefits of labor strikes and growing worker power for broader U.S. economic growth [3b8626a5].
The study also emphasizes the importance of unions in protecting workers from wage theft, which is a significant issue that affects many workers [3b8626a5]. Additionally, unions have been found to play a crucial role in reducing racial wage gaps and supporting policies that benefit Black Americans, contributing to greater economic equality [3b8626a5].
Furthermore, unions have a positive impact on worker safety, helping to create safer working conditions and reducing health inequality [3b8626a5]. They also have the potential to mitigate stagnant wages and inequality by advocating for fair wages and better working conditions [3b8626a5].
A report from the U.S. Department of Treasury further supports the positive impact of labor unions on the economy [849566b4]. The report concludes that strengthening unions today could support broader economic growth and highlights the Biden administration's support for labor unions and expanding collective bargaining rights [849566b4]. The article features insights from Laura Feiveson, deputy assistant secretary for macroeconomic policy at the Treasury Department, Rajesh Nayak, assistant secretary for policy at the Department of Labor, and Heidi Shierholz, president of EPI [849566b4]. The speakers emphasize that supporting worker bargaining does not come at the expense of a strong economy [849566b4].
The article also mentions recent labor activism and examples of companies raising worker pay, further demonstrating the value of labor unions for workers and their positive impact on the economy [849566b4].
Overall, the research and the report from the U.S. Department of Treasury highlight the importance of strong unions for economic stability, growth, and worker well-being. They provide evidence of the multiple benefits of labor unions, including improved financial stability, reduced inequality, and increased support for policies that promote economic growth and equality [849566b4].
In addition to the impact on wages, a recent analysis by Bruce V. Rauner Professor of Economics at Dartmouth College and Professor of Quantitative Social Science at the Social Research Institute, explores the role of unions in determining both hourly and weekly wages [656f14f3]. The study finds that the hourly wage premium for union members has fallen since the 1970s, but the differential in weekly wages has remained large [656f14f3]. This is partly due to union members working longer hours compared to their non-member counterparts [656f14f3]. The study highlights the importance of unions in providing not only a decent hourly wage but also sufficient paid hours of work for workers' consumption and welfare [656f14f3].
The analysis underscores the underexplored role of unions in determining weekly wages and the offer of paid hours of work, shedding light on the broader impact of union membership on worker well-being [656f14f3].