Rising wage inequality linked to falling union numbersS

Apart from professional sports, today America is mostly anti-union. Now a new study points to the drop in union numbers to explain the growing wage inequality over the last 35 years. From 1973 to 2007, wage inequality increased 40% among men and 50% among women, while at the same time union participation dropped from 34% to 8% for the former, and 16% to 6% for the latter.

Think of wage inequality as the reason why similarly trained people in the same industry can be paid vastly different sums.

At this juncture, it's very easy to start yelling about correlation and causation, but researchers Bruce Western of Harvard University and Jake Rosenfeld of University of Washington think they can actually drill down, and ascribe this change to a multitude of factors, including falling union membership. By analyzing differences within labor groups and between them, the researchers found that the union decline was linked to as much as a third of the wage inequality for men, and a fifth for women.

The interesting thing is that union membership appears to be similar to herd immunity — it protects even those who don't have it. The higher the union numbers, the higher the overall wages — even among non-union members. It causes the entire industry to have more egalitarian pay for individuals, regardless of their status.

So, while America may currently hate unions (unless you catch a ball for a living), it seems these organizations might have a good use: making sure that everyone earns what they deserve.

The paper will be published in the American Sociological Review in August, at which point you'll be able to find it here. Until then, there are a few more details here.

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