Wisconsin Budget

Decline in Unions Hurts Non-Unionized Workers

Weekly wages would be 5% higher for non-union private sector male workers if unionization was at 1979 levels.

By , Wisconsin Budget Project - Sep 15th, 2016 11:11 am
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Prints by Colin Matthes of Justseeds.

Prints by Colin Matthes of Justseeds.

The decline in unions has reduced pay for non-unionized workers as well as unionized ones, costing some workers thousands of dollars a year in lost wages, and is a major contributor to growing levels of income inequality, according to a new report from the the Economic Policy Institute.

It’s well-establish that union workers earn more in wages and other compensation than non-union workers who are otherwise the same in education, industry, age, and other factors. Union workers are more highly paid than their counterparts, and better off with regards to health insurance, retirement, and paid time off.

Unions also benefit non-union workers as well. Non-union workers benefit from a strong union presence in their labor market because unions set wage and workplace policies that are often followed by other businesses that do not have unions. In order to attract employees, non-unionized employers must offer wages similar to that agreed upon at unionized workplaces. And non-union businesses may offer higher wages to forestall worker efforts to unionize.

Union membership has dropped sharply in Wisconsin and elsewhere in recent years. In 2007, 15.4% of Wisconsin workers were represented by a union, dropping to 9.4% in 2015. Governor Scott Walker signed legislation limiting the unionization rights of private-sector workers in 2015, which is likely to drive the number of workers represented by unions even lower going forward.

That decline in unionization has cost some Wisconsin workers thousands of dollars, even if they are not covered by a union. According to the EPI report:

  • Weekly wages would be 5% higher for non-union private sector male workers if unionization remained at its same level as in 1979. For a year-round worker, this adds up to a loss of $2,704.
  • For non-union private sector male workers without a college degree, the equivalent annual wage loss is larger: $3,016.
  • Non-union private sector male workers without a high school degree have the highest annual wage loss of $3,172.

The effects on women workers are not as large, because women were less likely to be represented by a union in 1979.

According to the Economic Policy Institute:

“Rebuilding our system of collective bargaining is an important tool available for fueling wage growth for both low- and middle-wage workers and ending the era of persistent wage stagnation.”

17 thoughts on “Wisconsin Budget: Decline in Unions Hurts Non-Unionized Workers”

  1. mbradleyc says:

    So then prices would be at least 5% higher. It all comes to the same thing. The money doesn’t just come out of the air magically. Also, the extra 5% in wages would mostly go to the unions in fees anyway.

    Thanks, but I don’t need a union to cause acrimony in my workplace. If I am unhappy with my job, I know how to fix it. I can take care of myself.

  2. Vincent Hanna says:

    Wow you are tough. I am frightening to type this. Don’t hurt me. How exactly do you take matters into your own hands? Please tell me it involves throwing people around.

  3. Wifather2000 says:

    No the prices wouldn’t be 5% higher. The union and nonunion (RAT) shops bid competitively for jobs so the overall cost of the end product would be the same. The difference is that the workers get a higher pay with union, democratic, representation!

  4. Jason says:

    In 2008, Milwaukee, Wisconsin became the third U.S. city — after San Francisco and Washington, DC — to require paid sick leave for workers, thanks to a referendum overwhelmingly approved by the city’s voters. -Think Progress.

    Mayor Tom Barrett killed that baby while it was still in the crib. Down with the collective!!

  5. Vincent Hanna says:

    Um what are you talking about Jason?

    “Gov. Scott Walker signed into law Thursday a measure that voids Milwaukee’s paid sick leave ordinance that was passed by voters in a referendum and upheld recently by the state Court of Appeals.”

    http://archive.jsonline.com/news/milwaukee/121332629.html

  6. Jason says:

    My point is if your own Democratic party leaders, such as Mayor Barrett is against union rights how can you progress?. On another note, when are we going to hold private unions accountable? They promise their union brothers and sisters that if they put their hard earned pay checks money into the pension system that they can some day retire with a meager pension. They fill their heads with lies. The union fat rats eat up all the cheese and act all surprised when all the little mice want to eat their promised cheese.

  7. happyjack27 says:

    Jason, if Milwaukee didn’t have a paid sick leave law because Barrett killed it, how could Scott Walker void that law?

  8. Tom D says:

    To see the effect unions have on prices, look at Sam’s Club and Costco.

    Sam’s isn’t unionized, but some Costco stores are. Costco pays much higher wages (and provides better benefits) than Sam’s (Costco’s union and non-union stores pay similar wages), yet Costco is no more expensive than Sam’s.

    Yes, unions increase wages, but they don’t necessarily increase prices.

  9. happyjack27 says:

    CEO salaries have been sky-rocketing for quite some time, and we haven’t witnessed any noticeable effect of this on prices.

  10. happyjack27 says:

    At the end of this they talk about the effects on prices:

    https://www.youtube.com/watch?v=GYyqUZe7OCY

  11. Jason says:

    Tom, the Costco model is always the example. Walk in there asks how many of their employees are full time and in the union. 10 percent? On another note, how are all these private sector unions peddling their lie now. Baby boomers retirees are opening up their union letters with messages stating pension fund insolvent in 2020. Do you real thing the private union millennials are that stupid. Why will they pay into a pension that is already insolvent?

  12. happyjack27 says:

    Tom was talking about the lack of effect of higher wages on prices.

  13. Vincent Hanna says:

    Jason Barrett did not kill it. Walker did. Did you not bother to read the story?

  14. happyjack27 says:

    i did a little bit of research and found that, far from wanting it dead, Barrett wanted a state-wide referendum rather than a city-wide one. That doesn’t strike me as anti-union.

  15. Jason says:

    All I am saying is that the city of Milwaukee citizens through a binding referendum request a sick day allowances for all workers in the city of Milwaukee. It passed. Barrett chose not to do it. The Progressives were given a gift and Barrett marked it RETURN TO SENDER.

  16. happyjack27 says:

    So Barrett is all private business owners now.

    This just gets stranger and stranger.

  17. Vincent Hanna says:

    Yeah he is deliberately misrepresenting what actually happened. Hardly a surprise. It’s par for the course.

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