The COVID-19 pandemic has underscored both the importance of unions in giving workers a collective voice in the workplace and the urgent need to reform U.S. labor laws to arrest the erosion of those rights. During the crisis, unionized workers have been able to secure enhanced safety measures, additional premium pay, paid sick time, and a say in the terms of furloughs or work-share arrangements to save jobs. These pandemic-specific benefits build on the many ways unions help workers.
Unionized workers (workers covered by a union contract) earn on average 11.2% more in wages than nonunionized peers (workers in the same industry and occupation with similar education and experience). Black and Hispanic workers get a larger boost from unionization. Black workers represented by a union are paid 13.7% more than their nonunionized peers. Hispanic workers represented by unions are paid 20.1% more than their nonunionized peers.
It should come as no surprise that unions raise wages, since this has always been one of the main goals of unions and a major reason that workers seek collective bargaining. How much unions raise wages, for whom, and the consequences of unionization for workers, firms, and the economy have been studied by economists and other researchers for over a century.
The research literature generally finds that unionized workers’ earnings exceed those of comparable nonunion workers by about 15%, a phenomenon known as the “union wage premium.”
H. Gregg Lewis found the union wage premium to be 10% to 20% in his two well-known assessments, the first in the early 1960s (Lewis 1963) and the second more than 20 years later (Lewis 1986). Freeman and Medoff (1984) in their classic analysis, What Do Unions Do?, arrived at a similar conclusion.
Historically, unions have raised the wages to a greater degree for “low-skilled” than for “high-skilled” workers. Consequently, unions lessen wage inequality. Hirsch and Schumacher (1998) consider the conclusion that unions boost wages more for low- and middle-wage workers, a “universal finding” of the extensive literature on unions, wages, and worker skills. As they state:
Laws governing workers’ compensation are primarily made at the state level (with the exception of federal longshoremen), but they generally form an insurance system in cases where a worker is injured or becomes ill at the workplace. The employer is liable in the system, regardless of fault, and in return they are protected from lawsuits and further liability. Once again, lack of information about eligibility and the necessary procedures for filing a claim forms the greatest obstacle to receipt of benefits. Fear of employer-imposed penalties and employer disinformation are important other factors weighed by workers deciding whether to act.
The data most frequently used for this analysis is the Current Population Survey (CPS) of the Bureau of Labor Statistics, which is most familiar as the household survey used to report the unemployment rate each month.
Unions are associated with higher productivity, lower employee turnover, improved workplace communication, and a better-trained workforce. There is a substantial amount of academic literature on the following benefits of unions and unionization to employers and the economy: Economic growth. Productivity.