Labour
Unions Are Not Only Good for Workers, They’re Good for Communities and for Democracy
By Asha Banerjee, Margaret Poydock, Celine McNicholas, Ihna Mangundayao, and Ali Sait, Economic Policy Institute, December 15, 2021
Dec 21, 2021 - 11:24:04 AM

High unionization levels are associated with positive outcomes across multiple indicators of economic, personal, and democratic well-being. Unions give workers a voice at work, and also give workers a voice in shaping their communities

We know that unions promote economic equality and build worker power, helping workers to win increases in pay, better benefits, and safer working conditions.

But that’s not all unions do. Unions also have powerful effects on workers’ lives outside of work.

In this report, we document the correlation between higher levels of unionization in states and a range of economic, personal, and democratic well-being measures. In the same way unions give workers a voice at work, with a direct impact on wages and working conditions, the data suggest that unions also give workers a voice in shaping their communities. Where workers have this power, states have more equitable economic structures, social structures, and democracies.

Income and economic protections

We find that, on average, the 17 U.S. states with the highest union densities:

·       have state minimum wages that are on average 19% higher than the national average and 40% higher than those in low-union-density states

·       have median annual incomes $6,000 higher than the national average

·       have higher-than-average unemployment insurance recipiency rates (that is, a higher share of those who are unemployed actually receive unemployment insurance)

Health and personal well-being

We find that the states with the highest union densities:

·       have an uninsured (without health insurance) population 4.5 percentage points lower, on average, than that of low-union-density states

·       have all elected to expand Medicaid under the Affordable Care Act, protecting their residents from falling into the “coverage gap”

·       are more likely to have passed paid sick leave laws and paid family and medical leave laws than states with lower union densities

Democracy

We find that:

·       Significantly fewer restrictive voting laws have been passed in the 17 highest-union-density states than in the middle 17 states (including D.C.) and the 17 lowest-union-density states.

·       Over 70% of low-union-density states passed at least one voter suppression law between 2011 and 2019.

Background

A wealth of scholarship documents the positive effects unions have for workers, both those who are unionized and those who are not. We summarize these below.

Higher wages and decreased income inequality. On average, a worker covered by a union contract earns 10.2% more in wages than a peer with similar education, occupation, and experience in a nonunionized workplace in the same industry (EPI 2021e). This wage advantage is known as the “union wage premium.” But unions don’t just help union workers—they help all workers (Bivens et al. 2017). When union density is high, nonunion workers benefit, too, because unions effectively set broader standards—including higher wages—which nonunion employers must meet to attract and retain the workers they need (Rosenfeld, Denice, and Laird 2016; Mishel 2021). The combination of the direct wage effect for union members and this “spillover” effect for nonunion workers means unions are crucial to raising wages for working people and reducing income inequality (Card 1996, 2001; Card, Lemieux, and Riddell 2018).

Reduced wage gaps. Unions also help to reduce gender and racial/ethnic wage gaps. Hourly wages for women represented by a union are 4.7% higher on average than for nonunionized women with comparable characteristics (EPI 2021d), and research looking at specific cases suggests that unions reduce gender wage gaps for similar jobs within a given workplace (Gould and McNicholas 2017). For example, Biasi and Sarsons (2020) show that the expiration of teacher collective bargaining agreements led to an increase in the wage gap between men and women with similar credentials, implying that the terms of the collective bargaining agreement had previously helped to minimize such wage gaps. Unions have also historically helped and continue to help close wage gaps for Black and Hispanic workers (Farber et al. 2021). Black workers represented by a union are paid 13.1% more than their nonunionized Black peers, and Hispanic workers represented by a union are paid 18.8% more than their nonunionized Hispanic peers (EPI 2021d).

Increased government revenue and decreased government spending. Unionization has a range of positive economic impacts in addition to decreasing wage inequality and closing gender and race wage gaps. Sojourner and Pacas (2018) find that union membership yields a positive “net fiscal impact”—or, to put it simply, unionized workers have more income and therefore pay more taxes. Unions pave the way for more income and wealth-building for workers and therefore more revenue for the government.

Sojourner and Pacas (2018) also find that unionized workers use fewer public benefits. Higher incomes allow workers and their families to be less dependent on government benefits, and unions also help workers win benefits such as health insurance from their employers.

Employer-sponsored benefits including health insurance, retirement, and paid leave. Union workers are far more likely than nonunion workers to be covered by employer-provided health insurance. More than nine in 10 unionized workers have access to employer-sponsored health benefits, compared with just 68% of nonunion workers, and union employers contribute more to their employees’ health care benefits (EPI 2021d). Furthermore, union employers are more likely to offer retirement plans and to contribute more toward those plans than comparable nonunion employers. Union workers are also more likely to have paid sick days, vacation and holidays, more input into the number of hours they work, and more predictable schedules (EPI 2021d).

Strengthened health and safety. Unions also improve the health and safety of workplaces by providing health insurance and paid sick time, requiring safety equipment, and empowering workers to report unsafe conditions without fear of retaliation (Zoorob 2018; Amick et al. 2015). So-called right-to-work legislation that weakens unions has been associated with a roughly 14% increase in the rate of occupational fatalities (Zoorob 2018).

Increased civic engagement and broader community benefits. Beyond wages, benefits, and safety, recent scholarship shows the indirect effect unions have on people’s political and personal attitudes and on the broader community and economy as a whole. Frymer and Grumbach (2021) find that union membership reduces white racial resentment. Feigenbaum, Hertel-Fernandez, and Williamson (2019) analyze the relationship between unions and political advocacy, specifically on policies related to worker empowerment and economic justice. They find that weakening unions (through the enactment of “right-to-work” laws) has significant long-term political and economic effects, such as lower voter turnout, lowered organized labor contributions, less voter mobilization, fewer working-class candidates serving in state legislatures and Congress, and more conservative state policy. These political consequences undoubtedly affect not only the communities in which they take place, but also the broader economy, as the chosen candidates enact economic policies.

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Our analysis in this report supports this existing scholarship on unions. The strong relationship between union density and a range of economic, personal well-being, and democratic outcomes is consistent with the idea that unions focus the political power of workers and result in the advancement and defense of policies that benefit the broad interests of workers, their families, and their communities.

The data we analyze across a wide range of indicators support the notion that through advocating for higher wages and better benefits for members and, more generally, by mobilizing and building grassroots coalitions and acting as one of the main countervailing forces against rising corporate concentration, unions act as a channel for producing and cementing positive economic, health, and democratic outcomes in the communities in which they are active.