Report: As Union Membership Rates Decrease, Middle Class Incomes Shrink

By Karla Walter, Senior Policy Analyst, and
David Madland, Director of the American Worker Project
at the Center for American Progress Action Fund.
Wonkroom.thinkprogress.org




Union membership is at record lows and is likely to drop even further tomorrow when the Bureau of Labor Statistics announces new figures for 2010.

Critics claim that unions are not important to the modern economy — with only 12 percent of workers currently unionized — but the truth is that if you care about the middle class, you need to care about unions.

The middle class is markedly stronger when workers join together in unions. As the chart below demonstrates, the sharp decline over the past 40 years in the percentage of workers organized in unions has been associated with an equally sharp drop in the share of the nation’s income going to the middle class — those in the second, third and forth income quintiles*:

The power of unions to create prosperity for working families is well recognized: Organized labor is one of the few voices for the economic interests of the middle class in our government. Unions were key to creating and protecting the social safety net (including Social Security and Medicare) and winning major legislative victories for working families such as the Equal Pay Act, the Civil Rights Act, the Family and Medical Leave Act and — most recently — the Affordable Care Act.

And unions ensure that workers are paid fair wages. Unionized workers today make significantly more on than their non-union counterparts — about $2.50 more per hour than an otherwise comparable worker in the typical state according to a recent study by the Center for Economic and Policy Research.

When unions were stronger in the middle part of the last century, American workers wages rose as they became increasingly more productive. But today, as union strength has decreased, this link has broken down: even though American workers grow increasingly more productive, their wages have stagnated. At the same time, more and more income has become concentrated at the very top of the income scale.

If DOL announces tomorrow that unionization rates have again fallen, it’s not just bleak news for the ranks of the unionized, it’s also bad news for the rest of the middle class.

*Sources:

Barry T. Hirsch and David A. Macpherson, "Union Membership and Coverage Database from the Current Population Survey" Industrial and Labor Relations Review, Vol. 56, No. 2, January 2003, pp. 49-54. (in pdf) http://unionstats.gsu.edu/UnionStats.pdf 

Middle class share of aggregate national income includes the second, third and forth income quintiles and is from the United States Census Bureau’s Current Population Survey (Shares of Aggregate Household Income by Quintile). http://www.unionstats.com/ 

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