By Pedro Nicolaci da Costa
Need further proof that stagnant wages and rising inequality can be directly traced to a sharp drop in union membership in corporate America?
Look no further than a comprehensive new report from the Hamilton Project at Brookings, entitled "The Shift in Private Sector Union Membership: Explanations and Effects."
The research chronicles the role of the long-term decline of worker power, and unions specifically, in creating an economy that is highly unequal and where the benefits of economic growth are not widespread.
"We present evidence on the labor market effects of private sector unions, showing that unions reallocate income from employers to workers, with particularly large effects on the lower part of the wage distribution," write economists Ryan Nunn, Jimmy O’Donnell and Jay Shambaugh.
"Consequently, the decline of union participation was an important driver of the increase in wage inequality and wage stagnation for some workers."
This incredible chart traces the growth and retreat in union membership back to the 19th century.
As the figure shows, the number of unionized workers has shrunk back to early 20th century levels with only 10.5% of all workers belonging to a union. Among private sector workers that number is even tinier—just 6.4% of the workforce.
"The decline in union membership (also referred to as union density) over the past 45 years has occurred almost entirely within the private sector," the report said.
Private sector union membership has declined sharply in the face of anti-worker policies and... [+]
HAMILTON PROJECT
The Hamilton study says employers have inherent advantages over workers in terms of information and power in the labor market, findings corroborated by a long history of research at the Economic Policy Institute, where I work.
"The classic solution to this asymmetry in bargaining power is the labor union," the Hamilton report says. "By representing individual workers at the bargaining table, a union can ameliorate many of the disadvantages listed above and improve workers’ compensation and conditions of work."
The Trump administration has turned what was an uphill battle for organized labor into an outright fight for survival, nominating pro-corporate judges that favor harmful arrangements like forced arbitration, stacking the National Labor Relations Board with anti-worker appointees and, most recently nominating former Walmart lawyer and Wall Street darling Eugene Scalia to the role Secretary of Labor.
What can be done? According to Nunn, O’Donnell and Shambaugh, it’s the politics, stupid.
"If unions are to regain a larger role in representing worker interests, changes would likely need to be made to current labor relations law and institutions," they write.
"Options for doing so include making more use of sectoral bargaining, wage boards, works councils, and co-determination in addition to making it easier for workers to form unions."
Fortunately, there’s legislation out there currently that would do much of that. All Congress needs to do is act.
See article on forbes.com.