research paper on labor unions

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• Am J Public Health
• v.106(6); Jun 2016

The Role of Labor Unions in Creating Working Conditions That Promote Public Health

All authors contributed to the conceptual development of the study. C. A. Paras and H. Greenwich coordinated data collection. All authors collaborated on study design. J. Hagedorn was the primary author of data analysis and interpretation and drafted the article with significant support from A. Hagopian and H. Greenwich. All authors revised content and approved the final version to be published.

We sought to portray how collective bargaining contracts promote public health, beyond their known effect on individual, family, and community well-being. In November 2014, we created an abstraction tool to identify health-related elements in 16 union contracts from industries in the Pacific Northwest. After enumerating the contract-protected benefits and working conditions, we interviewed union organizers and members to learn how these promoted health. Labor union contracts create higher wage and benefit standards, working hours limits, workplace hazards protections, and other factors. Unions also promote well-being by encouraging democratic participation and a sense of community among workers. Labor union contracts are largely underutilized, but a potentially fertile ground for public health innovation. Public health practitioners and labor unions would benefit by partnering to create sophisticated contracts to address social determinants of health.

Labor unions improve conditions for workers in ways that promote individual, family, and community well-being, yet the relationship between public health and organized labor is not fully developed. 1 Despite historic and current efforts by labor unions to improve conditions for workers, public health institutions have rarely sought out labor as a partner. 2,3

In 2014, American labor union density was at a 99-year low. 4 Low union density has left workers vulnerable to reduced health and safety standards, and has fed the decline in public perception of the value of unions. 5,6 Unions have helped to codify economic equity in the workplace, and the decline of their power is associated with the greatest level of economic inequity in our nation’s history. 5,7–9 The erosion of union density has undermined the role of organized labor as a societal power equalizer. 8

Income is a primary social determinant of health, associated with the living environment and overall well-being of individuals or families. 10–16 Income is higher in union jobs than in nonunion jobs, especially for lower-skilled workers. 5,16–18 Retirement or pension plans create the financial stability to promote health into old age. 19 Union employees are more likely to have a retirement or pension plan and are more likely to participate in a retirement plan sponsored by their employer than employees who are not members of a union. 20,21

Researchers have established a correlation between unionized work and a higher percentage of pay coming in the form of highly valued benefits. 22,23 Unions have historically been involved in creating healthy and safe workplaces, advocating regulations that are monitored and enforced by public health entities such as the Occupational Safety and Health Administration. 3,24

Autonomy and control over one’s life are associated with positive health outcomes, 25–28 and social support in the work environment enhances psychological and physical health. 29,30 Conversely, perceived job insecurity is associated with risk factors for poor health outcomes, contributing to racial and socioeconomic health disparities. 31–35 Unions help members gain control over their scheduling 36,37 and job security, 38 and union membership is associated with increased democratic participation. 39

The American Public Health Association is on record supporting the role of labor unions in promoting healthy working conditions, health and safety programs, health insurance, and democratic participation. 40–42 The decline of union density may undermine public health in the United States, making this a critical time for public health to actively support labor unions.

Previous researchers published in AJPH have highlighted the links between unions, working conditions, and public health, but called for more research to establish the precise mechanism of the relationships. Malinowski et al. proposed the social–ecological model as theoretical framework for connecting public health and labor organizing. 43 Both labor unions and public health organizations intervene in the conditions that make people healthy through individual life choices, and social and community networks, as well as general socioeconomic, cultural, and environmental conditions. Malinowski et al. illustrates the overlapping interests of labor unions and public health and how their lack of coordination has created barriers for both institutions.

One mechanism unions use to promote public health is the union contract. These are legally binding, durable over a designated time, and specific. They are durable because they cannot be unilaterally changed, and contracts that follow often build on the progress of previous negotiations. Even after a contract expires, federal labor law provides a process and momentum for the negotiation of a new one.

We hypothesized that union contracts promote the health status of workers. If true, contracts have untapped potential for public health professionals working to improve the health of individuals and communities.

We designed this cross-sectional, mixed-methods study to identify specific mechanisms that link labor union representation and public health outcomes. Our primary unit of analysis was the negotiated contract between management and labor for a variety of unions in the Puget Sound region of Washington State. We supplemented a textual analysis of the contracts with interviews of union organizers and union members.

In the summer of 2014, we established a partnership between a University of Washington master of public health graduate student (J. H.) and Puget Sound Sage, a nonprofit organization that promotes alignment among labor, environmental, and community interests to “grow communities where all families thrive.” We identified 6 union locals in the region that represented hotel workers, truck drivers, home-care workers, construction workers, child-care workers, office workers, and grocery store workers. Sage held preexisting relationships with these unions, either through representation on Sage’s board or some other form of collaboration, which greatly facilitated our data requests. For each union, we obtained 1 or more labor contracts, for a total of 16 contracts ( Table 1 ).

TABLE 1—

Union Contracts Dated 2010 to 2014 Analyzed for Mechanisms That Advance Health of Employees and Their Families: Pacific Northwest, United States

Note. SEIU = Service Employees International Union; UFCW = United Food and Commercial Workers; UNITE HERE = Union of Needletrades, Industrial, and Textile Employees and Hotel Employees and Restaurant Employees Union. Data for this article came from the 16 union contracts analyzed for their health-related factors, obtained from 5 Puget Sound labor unions in 2014.

Through a comprehensive literature review of the work-related determinants of health, we identified health-related factors that theoretically might be addressed in a labor contract. We then created a spreadsheet abstracting specific language from each contract by each of the theoretical constructs, and, through an iterative process, settled on 12 health factors. For example, we created a cell for “fair and predictable pay increases,” into which the following Service Employees International Union (SEIU) 775 contract language was placed:

Employees who complete advanced training beyond the training required to receive a valid Home Care Aide certification (as set forth in the Training Partnership curriculum) shall be paid an additional twenty-five cents ($0.25) per hour differential to his/her regular hourly wage rate.

After creating the 12 large categories, we further analyzed the contract language in our spreadsheet to generate 34 subcategories ( Table 2 ). We suggest that these 34 factors, taken together, comprise the specific mechanisms by which labor contract language supports public health. We determined whether the indicators were present in each contract (Table A, available as a supplement to the online version of this article at http://www.ajph.org ) and Table 2 reports what proportion of contracts contained language on each of the 34 factors. When “all” contracts have an indicator, this means each of the 16 contracts contains health-protecting language on the topic. “Almost all” refers to 14 or 15 contracts, “most” means 7 to 13 contracts, and “some” refers to 5 or 6 contracts.

TABLE 2—

Factors That Advance Health of Employees Theorized to be Found in Union Contracts, and Their Presence in 16 Union Contracts Dated 2010 to 2014: Pacific Northwest, United States

Note. All = 16 contracts; almost all = 14 or 15 contracts; most = 7 to 13 contracts; some = 5 or 6 contracts. Data for this article came from the 16 union contracts analyzed for their health-related factors, obtained from 5 Puget Sound labor unions in 2014.

To supplement our analysis, we interviewed 1 member from each of the 6 unions covered by a contract in our analysis, as well as 7 union organizers representing those members ( Table 3 ). In 1-hour interviews with union organizers, we explored how contract language is aligned with public health outcomes through questions about their job and the role of the union. We asked workers about the dangers in their job and if or how the union helps to protect them, we asked about safety and health problems and the union’s role in addressing those, and we asked about conflict in the workplace and whether the union helps to resolve issues. We also asked workers to compare any workplaces they had experienced without a union to their current workplace.

TABLE 3—

Interviews Conducted With Union Members and Organizers: Pacific Northwest, United States, 2015

Note. SEIU = Service Employees International Union; UFCW = United Food and Commercial Workers; UNITE HERE = Union of Needletrades, Industrial, and Textile Employees and Hotel Employees and Restaurant Employees Union. Interviews conducted between January and April 2015 with Puget Sound–area labor union staff and industry employees to supplement our understanding of the role of labor union contracts in protecting employee health.

Each union assisted in identifying a covered member for us to interview. Usually, an e-mail was sent to members the organizer thought may be interested in the study. These members were compensated $50 for their 1-hour interviews, with funds provided by Sage. In interviews with members, we asked about the most dangerous or hazardous aspects of their jobs and how the union helps to mitigate those risks, as well as other benefits of being a union member.

There is consistency among contracts negotiated by same union (Table A). Contracts with public sector entities (such as 925.2, Headstart Program; 775.3, State of Washington; and 242.3, Seattle School District) have fewer provisions that contribute to health in their contracts.

Compensation

We created compensation indicators illustrating how the wages of employees are augmented when employers are prohibited from externalizing their costs by having employees pay for work-related travel, training, and materials.

All contracts include minimum wages by employee classifications, including overtime. Higher income and overtime wage gains are built over time. Income is augmented when employers are directed to cover specific work-related expenses. Most contracts compensate employees for the cost of traveling between work sites and the cost (or partial costs) of trainings. Some contracts also provide money for materials, such as United Food and Commercial Workers (UFCW) contract 21.2, which states, “The Employer shall bear the expense of furnishing and laundering aprons, shop coats, and smocks, for all employees under this Agreement.” Other contracts ensure employers will not call in more employees than needed and then send them home; they do this by creating a “show-up pay” provision. Laborers’ contract 242.1 describes this as

Employees reporting for work and not put to work shall receive two hours pay at the regular straight time rate, unless inclement weather conditions prohibits work, or notified not to report at the end of the previous shift or two hours prior to the start of a shift.

One child-care worker explained how union advocacy has increased the supplement provided by the state for the extra challenges posed by caring for low-income children, saying “For family childcare workers, who are often very underpaid for the amount of hours that they work, we have seen over the last 8 years, a 22% increase in our subsidized childcare. That is big!” Another worker from Teamsters Local 117 said, “I know there are guys doing the same job [in nonunion warehouses] making $10 less an hour.”

Predictable and fair increases.

All contracts provide wage increases on the basis of qualifications, duties, and duration of time at the company. Workers can increase their wages by increasing their training or by assuming additional responsibilities, including mentoring peers, accepting clients with higher needs, working less-desirable hours, doing more physically strenuous labor, or taking on leadership roles within a working group. Some contracts require transparency in paycheck calculations, mandating employers to itemize hours, overtime, and sometimes the cumulative number of sick days or holidays used, allowing employees to check the calculations.

An organizer with UFCW (grocery) Local 21 explained, “[employers] see experience as a cost and not a driver of sales.” The organizer explained that without the contracts, employers would not raise wages over time, especially for jobs viewed as requiring fewer technical skills.

Retirement and pension.

Almost all contracts include retirement or pensions. Most of these are set up in the form of trusts, with a collaborative process for management and employees to manage money and benefits. This language usually exists in a separate document referred to by the contract.

A retired member of Laborers Local 242 described how he was able to adjust his hours to make the money he needed, but also be able to retire comfortably because of his savings and pension. He explained, “I retired early. I wanted to do things that I wasn’t able to do when I was younger because I had to support the family.”

We created indicators to track evidence-based factors related to physical and psychological health, including time off and access to health care. 44–46

Paid time off.

Most contracts include the indicators of paid annual leave, paid rest periods, and bereavement leave. The amount of annual leave varies, but usually increases as the employee gains seniority. Paid rest periods are usually defined as short, 15- to 30-minute periods. Bereavement leave to attend a funeral or grieve a loss can be used for specific family members in some contracts, whereas others allow its use for a broader range of relationships.

Health care coverage.

Health insurance is included in all contracts. We did not attempt to distinguish among contracts with regard to affordability, comprehensiveness, or number of dependents covered because health care is managed by trusts, much like retirement or pension benefits.

All of the organizers discussed the benefits of union health coverage. An organizer from UFCW Local 21 explained,

Members have consistently traded wages for health benefits. They have been willing to have slowed wage increases in order to maintain their strong health benefits over and over and over. What I see if I go into a [unionized grocery] I see a much higher percentage of people who have children who rely on their health insurance.

Health and Safety

Most contracts guide how health and safety regulations are communicated to workers, including written and verbal forms.

Health and safety information.

Although most contracts include health and safety information, they are usually not very specific. For example, Teamsters’ contract 117.1, states,

[T]he Company may require the use of safety devices and safeguards and shall adopt and use practices, means, methods, operations and processes which are adequate to render such employment and place of employment safe and shall do all things necessary to protect the life and safety of all employees.

Most contracts also include a provision allowing the union to post and maintain a bulletin board to communicate information to members. Contracts also generally ensure union representative access to the worksite. For example, SEIU contract 925.2 (child-care workers) states,

The designated Stewards or Chief Stewards shall have access to the premises of [Community Development Institute Head Start] to carry out their duties subject to permission being granted in advance.

Training and mentorship.

Almost all contracts explicitly require training. Some contracts include compensation for providing mentorship to encourage more senior employees to provide support to new employees or employees taking on new roles.

One organizer from Laborers Local 242 described how important it is for workers to know how to do their work safely, for themselves, coworkers, workplace clients, and their own families. For example, a hospital demolition crew should know how to contain particulate matter to avoid contaminating patients or bringing it home to expose their children. The organizer said training ensures “If you hire a [union] laborer, you know you’re going to get the best product. We have the safest workforce. We’re the most experienced.”

Promotion of a culture of workplace safety.

Most contracts detail the employer’s responsibility to provide and maintain protective clothing and equipment. Most contracts also protect bringing a safety hazard to the attention of a supervisor. For example, SEIU contract 775.5 states, “the employee will immediately report to their Employer any working condition the employee believes threatens or endangers the health or safety of the employee or client.” Some contracts have a provision allowing workers who return to work after an injury to receive less strenuous work, or “light duty.” Both Laborers’ contracts contain this provision, an important provision for physically demanding work.

Promoting Individual, Family, and Community Well-Being

We analyzed indicators that measure the role of contracts in reinforcing social support in the work environment.

Job protections and security.

All contracts contain specific and detailed grievance procedures, the process of reporting, mediating, and resolving conflicts in the workplace. Almost all contracts confirm the right to have a union representative present during meetings with managers. Some contracts, such as SEIU 775.1, make it the employer’s responsibility to make this known:

In any case where a home care aide is the subject of a written formal warning the Employer will notify the home care aide of the purpose of the meeting and their option to have a local union representative present when the meeting is scheduled.

Most contracts also establish or maintain a labor relations or management committee. Although the language about this committee may differ, the purpose of the group is to create a space in which workers and employers can negotiate problems that arise between negotiations of new contracts.

Almost all contracts contain a commitment to creating a discrimination-free workplace. Most contracts create the opportunity for a worker to take a leave of absence without sacrificing seniority for maternity leave, further education, religious holidays (e.g., Yom Kippur, Easter), military leave (for the employee or spouse), domestic violence, sexual assault, stalking, or union activity.

Fair and predictable scheduling.

Most contracts include a mandatory notice of schedule changes. As UFCW contract 21.1 explains,

The Employer recognizes the desirability of giving his employees as much notice as possible in the planning of their weekly schedules of work and, accordingly, agrees to post a work schedule.

Some contracts specify the amount of notice required for a schedule change. Those that change regularly may require posting the week before. Most contracts also include an amount of time required between shifts or minimum shift length, and how employees can request additional hours.

Democratic participation.

Most contracts provide employees the opportunity to participate in union-sponsored legislative “lobby days,” or to engage in political work while being paid by their employer. As SEIU contract 925.1 explains,

As part of our ongoing campaign to provide the highest possible standard of childcare and engage in an ongoing public campaign to explain the direct relationship between funding and the quality of care, it is in each party’s best interest to provide reasonable opportunity for members of the bargaining unit to participate in these efforts.

Contracts require all union members to pay dues. Some contracts also specify how a union member can contribute to a political action fund, which generates revenue to represent employee interests in the policy arena. One home health worker explained that she is getting more involved in politics and collective bargaining because of union engagement, saying,

I like belonging to a union that believes in me as an individual and as a caregiver. They’re behind us every step of the way. They help us to look at things that otherwise we might not be aware of, like state legislation and contract negotiation.

Public health practitioners have not typically viewed unions as partners in promoting public health, nor have they explored contract negotiations as a way to ensure health protections. We suggest that this is a missed opportunity. Our findings demonstrate that union contract language advances many of the social determinants of health, including income, security, time off, access to health care, workplace safety culture, training and mentorship, predictable scheduling to ensure time with friends and family, democratic participation, and engagement with management. This article provides a provisional framework to explore further the factors that create public health opportunities in union contracts.

We examined selected union contracts in the Pacific Northwest, which may not be generalizable. Our sample included only those unions in a relationship with Puget Sound Sage, perhaps suggesting unique perspectives or priorities. We compared our sampled unions to those in the King County Labor Council, however, and although there were some industries not represented (e.g., aerospace, teachers, assembly line workers), we believe the types of workplaces in our sample are reasonably representative of the landscape of unions in the county. We did not attempt to incorporate the views of the respective employers on these contracts.

The language in the contracts we reviewed included rights won at the bargaining table along with restatements of existing city, state, and federal laws. For example, leave without pay contract provisions match the Washington State Family Leave Act. When union negotiators include these indicators in contracts, they generate awareness of health-promoting regulations and protections. Laws and policies can change, but a union contract can only change if the union agrees to renegotiate the contract or if the contract has expired. Union stewards learn the details about a contract, but cannot be expected to know the full range of laws from a variety of jurisdictions. The contract works to reinforce the knowledge of workers and their representatives. Although it was beyond the scope of our study, contracts must be enforced to actualize their health-related benefits. Effective enforcement mechanisms for contracts are also potentially beneficial to public health officials. 22,27,47

We identified many contract indicators that advance health for more than just employees. Unions generate higher prevailing wages in a community. 7,48 Unions invest in campaigns to raise wages for both union and nonunion workers, such as the $15 hourly wage initiative in SeaTac, Washington. 49,50 A safer environment for home-care and child-care workers creates safer environments for the people they serve. A culture of safety on construction sites ensures that environmental hazards are minimized for people who live nearby. Parents earning a living wage can avoid taking second jobs and use the time to engage in children’s schools or community councils. A healthy and happy workforce is more productive and less likely to leave a job, reducing the cost of turnover and absenteeism for employers. In spite of the many benefits unions confer to workplaces and communities, union membership is now limited to only 1 in 10 American employees. 4

The decline of labor union density is related to both the rise of corporate power and to mistakes made by labor. 1 After a period of radical inclusivity and left-leaning solidarity with broader political movements, unions moved toward racism and red-baiting in the 1950s, undermining their strength. 51 Unions are still working to reduce racial and gender disproportionality within their leadership. 52

Despite historical shortcomings, labor unions (and their contracts) offer an underutilized opportunity for public health innovation. As illustrated by Malinowski et al., public health practitioners often work in the “outer” layers of the social–ecological model, promoting environments that can better shape population health. 43 This is also true of labor unions. Public health practitioners could help unions negotiate more sophisticated contracts to address the social determinants of health. Public health practitioners could also work with policymakers to heighten awareness of how unions might help mitigate the forces that threaten health in the workplace and beyond. Supporting progressive labor union contracts is public health work.

ACKNOWLEDGMENTS

We acknowledge a grant from the University of Washington Harry Bridges Labor Center that made this work possible. Also, thank you to Puget Sound Sage for providing the compensation for labor union members who were interviewed.

HUMAN PARTICIPANT PROTECTION

Ethical approval for the project was provided by the University of Washington institutional review board, approval 48520-EJ.

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Unions, Worker Voice, and Management Practices: Implications for a High-Productivity, High-Wage Economy

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This article uses the metaphor of a social contract to review the evolution of American unions and their effects— especially in the variations in their quality—on firm employment strategies and performance, takes stock of the current state of unions and alternative forms of worker voice that have emerged in recent years, and discusses implications for the future of labor and employment policies. The key policy implication is that fundamental, not incremental, changes in labor policy will be needed if the range of worker voice and representation processes workers want and the economy needs are to grow to a scale large enough to close existing voice gaps and contribute to building a new productivity- and wage-enhancing social contract.

• collective bargaining
• productivity

Throughout most of the twentieth century, unions and collective bargaining were powerful mechanisms for improving wages and other aspects of job quality for both union-represented and non-union workers. These improvements negotiated in collective bargaining in turn put pressure on employers to find ways to increase productivity, what Sumner Slichter, James Healy, and E. Robert Livernash ( 1960 ) labeled the “shock effect“ of unions on management practices. These management adjustments could range from or include a mix of investments in new technology, workforce training or other personnel management practices, product upgrading, or other productivity enhancing actions. This dynamic process served as a precursor to what would later be labeled high-road management strategies (Kochan and Osterman 1994 ; Osterman 2018 ). Pattern bargaining, and the threat effects of union organizing of non-union firms, spread wage increases and other negotiated improvements in employment practices across establishments and firms within regions and industries (Levinson 1960 ; Budd 1992 ) and contributed to reducing income inequality (Freeman 1980 ; DiNardo, Fortin, and Lemieux 1996 ; Western and Rosenfeld 2011 ; Farber et al. 2018 ). In doing so, collective bargaining played a significant role in generating tandem increases in compensation and productivity, an indicator of what some of us have labeled the post–World War II social contract (Kochan 2000 ).

In recent decades, however, declining union membership and bargaining power reduced the role of unions as both a source of wage growth and as a spur to high-road managerial practices. The postwar social contract’s tandem movement of productivity and wages broke down and has yet to be replaced with other ways of supporting steady wage growth or motivating employers to compete on the basis of high productivity and high wages. As a result, the past four decades have witnessed significant growth in income inequality and a number of its associated consequences, such as increased worker insecurity, resistance to trade and immigration, and growing political polarization between the perceived winners and losers from globalization and changing technologies.

This leaves policymakers who want to support a high-productivity, high-wage economy and society with a set of important but difficult questions: What can be done to build a new productivity and wage-enhancing social contract suited to the contemporary and future economy and workforce? Are new policies needed to rebuild unions and worker bargaining power in ways that work in today’s economy? And, given the difficulties associated with reversing long-term union decline, what additional policy options might be needed to create good jobs for all segments of the workforce?

Our bottom line is that fundamental rather than incremental changes in labor and employment policies will be needed to build a new social contract that reverses recent trends and lays the foundation for a new social contract.

• COLLECTIVE BARGAINING AND THE POSTWAR SOCIAL CONTRACT

The National Labor Relations Act (NLRA) of 1935, along with the other three pillars of the New Deal labor legislation (unemployment insurance, social security and disability insurance, and minimum wages) laid the foundation for the social contract that emerged in the decades following World War II. The main effect of the NLRA was to provide long-term stability to union membership—once a union was recognized, it could not be ignored or broken by employers unless a majority of workers voted to decertify it. Union density in the private sector grew from approximately 11 percent in 1930 to a peak of 35 percent in 1945. Unions gained further legitimacy during World War II through participation in the National War Labor Board and its actions to endorse practices such as grievance arbitration, cross-firm wage comparisons within industries and occupations, and benefits such as paid health insurance (National War Labor Board 1946 ). The growth and strength of unions led President Truman to call a national labor-management conference in 1945 seeking a postwar accord for guiding the future of labor-management relations. That effort failed to achieve consensus largely because of the inability of labor and management representatives to agree on the extent to which unions should be able to have a voice in management practices (Chamberlain and Kuhn 1965 , 85). As a result, unions and employers were left to their own devices to develop the norms and practices that would shape collective bargaining in the postwar era.

The latter half of the 1940s was a tumultuous and pivotal time for collective bargaining. Pent-up demands for wage increases following the end of wartime wage restraints led to numerous strikes; a higher percentage (1.4 percent) of the workforce’s estimated total work hours (U.S. Department of Labor 1947 ) were lost to strike activity in 1946 than any year since. Major debates over the extent of union influence on management decisions dominated bargaining in the large industrial unions. Walter Reuther, president of the United Auto Workers (UAW), pressed auto firms to give the union a voice in product pricing in return for moderating wage demands. This was vigorously resisted by General Motors (GM) and other auto firms but also discouraged by union leaders in other industries who favored a more conventional arms-length relationship that would leave management free to make business decisions and unions free to negotiate for the best wage, benefit, and working conditions deal possible. This debate was essentially resolved when, in two rounds of negotiations between 1948 and 1950, GM management proposed and the UAW accepted a new wage norm that would eventually spread across the auto industry and to unionized firms in other industries but excluded any role for unions in wider business decision making. Later labeled the Treaty of Detroit, this principle called for wages to increase annually to keep up with increases in the cost of living and to provide an “annual improvement factor” of 2 percent to share the growth in aggregate productivity (Lichtenstein 1995 , 279). Once GM agreed to this basic formula, the UAW then insisted it be followed in negotiations with Ford, with Chrysler, and to varying degrees throughout the unionized auto supply industry. Unions in other industries with high degrees of union density adopted similar practices. This process of diffusing similar wage increases within large unionized firms and within industries through collective bargaining became known as pattern bargaining. It became an instrument for diffusing this wage-productivity norm broadly enough across the economy to achieve the tandem upward movement in both indicators from the mid-1940s to around 1980 (see figure 1 ).

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Growth in Productivity and in Average Hourly Compensation

Source: Economic Policy Institute 2017 .

• UNION WAGE EFFECTS DURING THE SOCIAL CONTRACT ERA

Given the growing importance of unions in the post–World War II expansion, it is not surprising that interest also grew among economists in estimating the effects of unions on wages (and to a lesser extent on productivity). Essentially all these studies applied and further refined the methodology for estimating the average effects of unions first developed by Gregg Lewis ( 1962 ). It calls for isolating the difference between wages of otherwise comparable union and non-union workers by controlling for other aspects of human capital. This task is made difficult by dynamic processes by which workers and employers react to unionization and the associated wage gains. For example, either adjustment (the shock effect responses described) or selection effects—lower- or higher-skilled workers might select into union jobs or employers might raise their standards for hiring to justify the higher union wage (Lewis 1986 )—render estimation of the union wage premium using conventional cross-sectional data sets (such as the Current Population Survey) incomplete. Nevertheless, in the 1950s and 1960s these estimated union differentials tended to range between 10 to 15 percent, depending on differences in occupations, industries, and regions. Estimates in the 1970s grew to 15 to 20 percent or more, again with considerable variations in and outside this range across different demographic and occupational groups (for a summary of the pre-1980s evidence, see box 1 ). Upon finding the union wage premium to be above 20 percent in some of their data by the late 1970s and early 1980s, Richard Freeman and James Medoff ( 1984 , 54) predicted that these premiums were unsustainable. Indeed, union employment declined as the premium reached its peak, followed by somewhat of a decline in the premium in more recent years (Bratsberg and Ragan 2002 ; Blanchflower and Bryson 2004 ). The predominant explanations for these wage premiums at the time were the traditional neoclassical view of unions acting as a monopoly (whereby they restrict labor supply and therefore increase wage levels) and a view that saw unions as a way to achieve greater rent sharing, particularly in firms or sectors where the product market allowed for sizable rents to exist. Neither Lewis ( 1962 ) nor Freeman and Medoff ( 1984 ) were able to adjudicate between these two hypotheses.

Summary of Pre-1980s Variations in Union Effects on Wages

Unions have a greater positive effect on wages of blacks, particularly black men relative to whites. (Ashenfelter 1972 )

Unions reduce the effects of age and education on earnings. That is, unions increase the earnings of younger workers by raising the entry-level salaries on union jobs above what an inexperienced worker would be paid in a comparable non-union job. At the upper end of the wage distribution, the effects of seniority provisions in union contracts protect older workers from wage erosion after they pass their peak productivity years. (Johnson and Youmans 1971 )

One study estimated the following union–non-union pay differentials by occupation: laborers, 45 percent; transportation equipment operators, 38 percent; craft workers, 19 percent; operatives, 18 percent; service workers, 15 percent; managers, 2 percent; clerical employees, 2 percent; and sales workers, 4 percent. (Bloch and Kuskin 1978 )

Union wage effects also vary across industries: 43 percent in construction; 16 percent in transportation, communications, and utilities; 12 percent in nondurable goods manufacturing; and 9 percent in durable goods manufacturing. (Ashenfelter 1978 )

Unions reduce white-collar/blue-collar wage differentials in firms where blue-collar workers are organized. Unions also reduce intra-industry wage differentials to a degree that this effect offsets the increase in earnings dispersion across industries so that the net effect of union is to reduce wage inequality among workers. (Freeman 1980 , 1982 )

Source: Katz, Kochan, and Colvin 2004 , 241.

Besides estimating the average effects of unions on wages, considerable attention was given to how unions affected income inequality in the post war period. At the firm level, unions have traditionally sought to attach wages to jobs following a principle of “equal pay for equal work.” Naturally, this leaves less room for variation of wages across individuals doing similar work (Freeman 1980 ; Freeman and Medoff 1984 ; Card 1996 ; Card, Lemieux, and Riddell 2004 ; Farber et al. 2018 ). Unions also reduced the pay differentials between occupational groups such as white- and blue-collar workers within firms (Freeman and Medoff 1984 ). Their equalizing effects across firms reflected, as noted, the role of pattern bargaining. Although less well-documented, the threat effect (that is, the motivation of non-union firms to avoid unionization) also played a significant role in equalizing wages in the past when unions were stronger. Although difficult to measure, that threat has largely dissipated given the very low probabilities that a union-organizing drive will occur or, if it occurs, will be successful (Ferguson 2008 ). Despite several successful and highly visible union-organizing drives at media companies (Masters and Gibney 2019 ) and academic institutions (Schmidt 2017 ; Benderly 2018 ), no substantial changes are apparent in the number of elections held or their success rate since 2011. 1

• UNION EFFECTS ON PRODUCTIVITY

Fewer studies have been undertaken on the effects of the average unions on productivity than on wages. The majority have focused on particular industries and also drew on data from the late 1960s through the early 1980s.

Freeman and Medoff ( 1984 ) suggest three potential pathways by which unions can affect productivity: restricting labor supply, restrictive work rules, and “voice.” The restriction to labor supply and work rules set off changes to employers’ allocation of capital and innovations to make more efficient use of higher-cost labor. The third pathway—empowering workers’ voice—however, can facilitate productive information exchange between frontline workers and management as well as boost workers’ loyalty to the firm. Early case studies found positive effects for unions on productivity in industries such as manufacturing, construction, and cement plants (for a review, see Freeman and Medoff 1984 ). Analysis of higher-level industry data included that of Freeman and Medoff ( 1984 ), which tested and reject some of the commonly cited mechanisms for why unions might inhibit productivity (for example, reduced managerial flexibility and prevention of technological change), and of Charles Brown and Medoff ( 1978 ), which also encountered little evidence for positively selected workers and instead supported voice-related or shock effects. Absent finer-detailed data or identification strategies, detailed case studies such as that of Kim Clark ( 1980 ) offered more insight into the potential mechanisms (albeit limited to specific industries)—Clark’s conclusions indeed found ex post changes to workers (such as turnover, absenteeism, discipline problems, and morale) but—more important— to management practices (such as formalization of procedures, worker-manager relations, performance reviews, and so on). Freeman and Medoff ( 1984 ) qualify that worker voice and management response channels could also negatively affect productivity if the state of employment relations is poor. We address the evidence of this mediating variation in union or employment relations quality later in this article.

• UNION EFFECTS ON PROFITS

The positive estimates of union effects on productivity have not, however, extended to effects on firm profits. Most of the studies on this issue report negative effects (Hirsch 2007 ). Unions appear to be associated with rent sharing with unionized firms, particularly in more concentrated industries, though it is not clear whether this is a causal effect (Belman 1988 ). Again, most of these empirical studies used data from the 1970s through the 1990s. One interesting, and to our knowledge unanswered, question is whether this effect still holds today. We would expect the decline in union power and failure of unions to organize the newer large so-called superstar firms in concentrated industries (such as Apple, Microsoft, and Google) would weaken the overall union effects on profits. If so, this suggests that the decline in unions may account for part of the decline in labor’s share of national and corporate income observed in recent decades. The issue warrants more careful research before firm conclusions on this issue can be reached.

In summary, research on the economic effects of unions in the era of the postwar social contract tends to focus on average effects, largely ignoring both the processes by which unions gained and sustained the bargaining power to have an impact, or on the variations in union-management relations in different settings. This began to change as evidence of both longitudinal and cross-sectional variations in union-management relationships became more visible.

• THE BREAKDOWN OF THE SOCIAL CONTRACT

The cumulative effects of the two oil shocks of the 1970s and the expanding union–non-union wage differentials—along with the inability of unions to overcome management resistance in organizing the growing high technology sectors of the economy or even the new plants of many unionized firms (Kochan, McKersie, and Chalykoff 1986 )—put significant stresses on existing collective bargaining relationships. These stresses seemed to explode with the combined effects of the change in political control of the national government that came with the election of Ronald Reagan; the decision of the Federal Reserve Bank to bring down the rate of inflation by raising interest rates and the recession that followed; the deregulation of various highly unionized industries such as trucking, airlines, railroads, and communications; and the rising importance of import competition in key manufacturing industries such as autos, steel, and electronics. The confluence of these policy decisions and economic developments helped launch what was described as a fundamental transformation of industrial relations in the 1980s that led to the demise of the old social contract and a search for new principles to guide labor-management relations (Kochan, Katz, and McKersie 1994 ).

One indication of the fundamental changes taking place in the 1980s was observed in the shift in the structure of wage determination under collective bargaining, a shift that lowered the bargaining power of unions and resulted in lower wage increases than collective bargaining produced in the pre-1980 period. Tables 1 and 2 present estimates of effects of the changes in wage determination that occurred before and after 1980 using the U.S. Bureau of Labor Statistics (BLS) Current Wage Developments series covering bargaining units with one thousand or more workers (Kochan 1988 ; Kochan and Riordan 2016 ). The regression coefficients in pre- and post-1980 equations in table 1 show that the major causes of the change were that strikes (or the threat of strikes proxied by actual strikes), centralized bargaining structures, and pattern bargaining, sources of bargaining power that drove wage increases in the period from 1957 through the 1970s, no longer served as significant determinants of wage changes in the early 1980s. Thus the forces that produced and sustained the postwar social contract were no longer able to sustain the tandem upward movement of wages with productivity growth. As a result, as shown in table 2 , the model used to explain wage determination in the pre-1980 period overpredicted the post-1980s by an average of 1.35 percent per year. Overprediction was greatest in centralized bargaining structures and in settings where intra-industry pattern bargaining had previously been the common practice. Unfortunately, in 1984 the BLS discontinued the data series that provided the wage data and so we are not able to test whether these differences persisted. Moreover, the expanding gap between aggregate productivity growth and wage growth from the 1980s to today suggests that the breakdown in the social contract has persisted.

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Wage Change Regressions: 1957–1984

Overpredictions of Post-1980 Wage Changes Using Pre-1980 Model

• VARIATIONS IN UNION EFFECTS AND THE QUALITY OF LABOR-MANAGEMENT RELATIONSHIPS

Starting in the 1980s, a large body of research began examining the effects of variations in the quality of labor-management relationships in both union and non-union establishments and firms within the same industries using what came to be called high-performance work systems. Two early studies of this type found large differences in productivity and product quality across auto assembly plants in the same firm. The differences were associated with variations in grievance rates, employee attitudes (trust) in supervisors, and the extent to which workers were engaged in quality improvement efforts (Katz, Kochan, and Gobeille 1983 ; Katz, Kochan, and Weber 1985 ). These studies had the effect of shifting focus from the average effects of unions on employment outcomes to explore more carefully the complementary (Milgrom and Roberts 1995 ; Black and Lynch 2001 ) or system of practices (Cutcher-Gershenfeld 1991 ; MacDuffie 1995 ; Ichniowski, Shaw, and Prennushi 1997 ) that combined to produce high or low productivity in both union and non-union firms.

The rise of Japanese “transplants” (auto assembly plants opened in the United States in the 1980s by Japanese firms such as Honda, Toyota, and Nissan) proved to be a fertile ground for studying these issues. A major debate developed over why the Japanese transplants appeared to achieve higher productivity and product quality than auto plants owned and managed by U.S. firms. The first documentation of this variation (without controlling for all unobserved factors) showed that average union effects would mask large differences between union and non-union facilities that employed traditional and high-performance work systems. Table 3 reproduces a classic set of comparisons that sparked much of this research. John Krafcik ( 1988 ) compared productivity and quality of auto assembly plants of non-union Japanese producers Nissan and Honda with a joint Toyota-GM unionized facility (NUMMI) and two other more traditionally structured GM-UAW plants using different levels of automation. The NUMMI plant matched and in some cases exceeded the productivity and quality performance of the non-union Japanese transplants and far exceeded the performance of the traditionally structured low and high technology (unionized) GM plants. This work spawned a host of industry-specific studies that documented similar productivity and quality results in organizations employing variations of high-performance work systems (MacDuffie 1995 ; Ichniowski, Shaw, and Prennushi 1997 ; for a review, see Appelbaum, Hoffer Gittell, and Leana 2011 ). Sandra Black and Lisa Lynch ( 2001 ) compared union and non-union manufacturing plants that used traditional and “transformed” or high-performance work system practices and further demonstrated the importance of focusing on the variations in both sectors: transformed plants achieved higher productivity in both union a nd non-union plants. Indeed, the differential between high and low productivity was greater in union than in non-union plants.

NUMMI Productivity Compared with Other Auto Plants in 1986

These quantitative results were collaborated with case studies of a number of transformed labor-management relationships observed in the auto, steel, office product, telecommunications, airline, health care, and other industries. The common features that distinguished transformed relationships was that unions and employers worked together in various forms of partnerships to engage employees in continuous improvement efforts. Many adopted variants of team work or other flexible work systems that departed from the individual job control model that characterized more traditional systems carried over from Taylorism and standard industrial engineering job design principles. Some encouraged and supported different forms of gains sharing thereby adapting the old productivity-wage norm in modified ways. Box 2 summarizes the features of the labor-management partnership at Kaiser Permanente, one of the largest, longest-lasting, and most comprehensive labor-management partnerships of the post-1980s era.

The Kaiser Permanente Labor-Management Partnership

In 1997, the CEO of Kaiser Permanente (KP), the president of the AFL-CIO, and leaders of the coalition of the unions representing employees at KP created what was to become the largest, most long-standing, and most innovative labor-management partnership in the nation’s history.

Over its first decade, the partnership helped turn around Kaiser Permanente’s financial performance, built and sustained a record of labor peace, and demonstrated the value of using interest-based processes to negotiate national labor agreements and to resolve problems on a day-to-day basis. Among its most significant achievements was the negotiation of a system-wide employment and income security agreement for dealing with workers affected by organizational restructurings. This agreement provided a framework that supported the introduction of electronic medical records technology on a scale that has made Kaiser Permanente a national leader in this area. In 2005 negotiations, the parties committed to bring partnership principles more fully to bear to support continuous improvement in health care delivery and performance by forming “unit based teams” (UBTs) of nurses, technicians, doctors, and service providers.

Since 2007 the parties have achieved significant progress in integrating the partnership into the standard operating model for delivering health care by expanding UBTs throughout the organization and demonstrating that high-performing teams that engage employees contribute significantly to improving health care quality and service, reducing workplace injuries, improving attendance rates, and achieving high levels of employee satisfaction with KP as a place to work and a place to get health care. As a result, Kaiser Permanente is now one of the nation’s leaders in the use of front line teams to improve health care delivery.

Source: Adapted from Kochan 2013 .

The bottom line of this body of research is that unions can and have had highly variable effects on managerial practices and on organizational performance, depending on the quality of the labor-management relationship. Traditional arms-length union-management relationships perform poorly relative to more flexible and partnership-oriented relationships. However, because a strong union is a precondition to partnerships (recall GM’s resistance to allowing a union to participate in what the company deemed management issues), these types of partnerships have withered and fewer new ones have been established as union power and density have declined. More broadly, the diffusion of high-performance work systems or high-road strategies also appears to have stalled (Albers Mohrman et al. 1995 ; Osterman 2018 ). The key question is whether unions or some other form of worker organization can regain its role as a significant force for wage and productivity growth. That is, can a new social contract be imagined and achieved in today’s economy? We now turn to this question.

• OUT OF THE ASHES: CURRENT STATE OF WORKER VOICE

So far we have painted a historical picture of the rise and decline of unions and the effects on both wages-compensation and the rise and stalled diffusion of high-road or high-performance work systems. Missing from this story is whether something has filled the void in worker voice and bargaining power as unions have declined. Can these new forms grow large enough to help increase wages or diffuse high-road practices that generate productivity growth? Or have workers lost interest in union representation in light of this long-term union decline? Answering these basic questions is crucial to deriving sensible implications for the future of labor policy.

Three data sets allow us to compare whether worker interest in gaining or having union representation has changed over the years before and after the breakdown in the postwar social contract. Two of these surveys also support comparisons of whether workers are experiencing a gap between the amount of say or influence (voice) they expect to have over conditions at work and their actual level of say or influence. We use these data to first summarize changes over time in interest in unions and then examine a number of other options for meeting worker expectations for a voice at work.

In 1995, Freeman and Rogers ( 1999 ) conducted a national survey of worker voice that identified what they labeled a representation gap; we use the term voice gap here. On average, workers reported that they had less say or influence on their jobs in determining wages, benefits, training, and other working conditions than they thought they ought to have. We conducted a similar national survey in 2017 and found these gaps persisted on compensation, wages, and training and extended to a broader array of workplace issues included in our survey than were measured in the Freeman and Rogers study (Kochan et al. 2019 ). Figure 2 summarizes the 2017 data. The largest voice gaps were reported for benefits, wages, promotions, and job security—essentially the key issues traditionally negotiated in collective bargaining. A majority of respondents reported having less of a voice on these issues than they felt they ought to have on their jobs. Although comparable data are not available for the earlier social contract era before 1980, the data—both that of Freeman and Rogers and the 2017 survey—suggest that a sizable voice gap has persisted since the 1990s.

Voice Gap: Percentage of Workers with Less Involvement Than They Want

Source: Adapted from Kochan et al. 2019 . Data based on Kochan and colleagues’ analysis of Worker Voice Survey.

Note: Calculated as the share of respondents who, on a given issue, rate higher on how much say they ought to have compared to how much say they actually have.

These two surveys, along with a 1977 national survey sponsored by the Department of Labor and conducted by the University of Michigan Survey Research Center, also allow for comparisons of the level of interest in joining a union among unorganized workers (Kochan 1979 ). Figure 3 presents the differences in the percentage of non-union workers who indicated a preference for union representation in nationally representative surveys in 1977, 1995, and 2017. 2 The 1977 and 1995 results were nearly identical: approximately one-third of the non-union workforce indicated they would vote to have union representation if given an opportunity to do so on their current job. Estimates of union support from the 1995 data are likely lower than what they would be if public-sector employees were included. In 2017 that number increased to 48 percent. This number translates into an underrepresentation of unions of approximately fifty-eight million workers. 3

Percent of Non-union Workers Who Would Vote for a Union

Source: Adapted from Kochan et al. 2019 . Based on authors’ analysis of 1977 Quality of Employment Survey (Quinn and Staines 1992 ), Worker Representation and Participation Survey (Freeman and Rogers 1999 ), and 2017 Worker Voice Survey data. Data for 1995 from Freeman and Rogers 1999 , 99.

Note: Each year’s sample excludes self-employed. The 1995 sample also excludes all management occupations.

How do the results of these three surveys (that is, the share of non-union workers who would vote for union) comport with other analyses of public opinions on unions? According to Freeman ( 2007 ), citing polls conducted by Peter Hart Associates, worker willingness to join a union from 1984 to 2004 shows a similar pattern—interest hovers in the area of 30 to 40 percent between the 1980s and 1990s but by 2004 reaches a high of 53 percent (see figure 4 ). Meanwhile, Gallup polls on Americans’ opinions of unions since 1936 show a similar pattern in the trend of stagnation of approval from the late 1970s to the 1990s (see figure 5 ). However, no substantial gain is evident between either the 1970s or 1990s and 2017. In 1979, approval sat at 55 percent. By 2017, it had risen to only 61 percent. This minimal change suggests that no major societal change in the role of unions in the economy had taken place in recent decades, but rather that an increasing share of approvers might also see unions as personally instrumental and relevant. These two series suggest that the union-interest indicator from the worker voice survey is not an aberration—instead, it seems as if the antiunion wave of the 1960s and 1970s stagnated until turning slightly more favorable after the Great Recession (other than a negative turn against most institutions during the Great Recession). Unions have become more attractive in that people are more likely to evince interest in joining a union if an election were held at their work .

Non-union Worker Likely Vote in a Union Representation Election, 1984–2004

Source: Freeman 2007 , figure A.

Note : The original figure was based on polls conducted by Hart Research Associates from 1993 through 2014, supplemented with data from a 1984 Harris poll.

Approval of Labor Unions

Source : Gallup 2018 .

• EMERGING FORMS OF WORKER VOICE

Given the long-term decline in unions and the difficulties of organizing using traditional approaches under the National Labor Relations Act, it is not surprising that a variety of new approaches to providing workers a voice have been emerging and continue to emerge. We explored a number of such alternatives in the 2017 worker voice survey. These included both options typically offered by employers and options typically offered independently of employers by groups either working in coalition with one or more unions or on their own. Table 4 lists the options and frequency of their use. Workers are most likely to turn first to their supervisors and coworkers for advice on how to address a workplace problem, likely in part because they are readily available in most workplaces. The other newer options have only been used by 20 percent or less of this sample.

Workers Who Used Each Voice Channel

The number and variety of new forms of organizing and advocating for addressing workers’ issues is impressive and likely to continue to grow. A sampling of these are listed in box 3 . Some, such as the Freelancers Union, focus on professionals, in this case professional freelancers/independent contractors. Others such as the Domestic Workers Alliance focus on low-wage occupations that carry out their work in customers’ homes. Some are affiliated with worker centers across the country, advocate for immigrant rights, and provide advice and legal services in disputes over wage and hour violations, discrimination, harassment, or safety and health. Others, such as Coworkers.org, help employees mount petitions to their employers to change scheduling and other practices. OUR Walmart uses artificial intelligence tools to track and answer employee inquiries about legal rights and potential violations of company policies. Lobstermen 207 is a union-affiliated co-op created to market the catch of independent lobster fishermen in Maine. Still other groups, such as the Fight for $15, mobilize in states and cities for increasing minimum wages.

Examples of New Worker Voice Organizations

AFL-CIO Worker Center Partnerships

Alianza Nacional de Campesinas

Blue Green Alliance

Center on Policy Initiatives

Chinese Progressive Association

CLEAN Carwash Campaign

Contratados

Coworkers.org

Drivers Network

Fight for $15

Freelancers Union

Green for All

Interfaith Worker Justice

Jobs with Justice

Justice for Janitors

Laundry Workers Center

Los Angeles Alliance for a New Economy

National Day Laborer Organizing Alliance

National Domestic Workers Alliance

National Guestworkers Alliance

National Taxi Workers Alliance

OUR Walmart

Partnership for Working Families

Raise Up Massachusetts

Restaurant Opportunities Center United

SherpaShare

Tech Workers Coalition

Turkopticon

Workers Lab

Working America

Source : Arvins, Larcom, and Weissbourd 2018 .

Although the range of innovations is impressive, the impact of these forms of organizing to date has been limited relative to that of unions at their peak. Evidence is scant that these innovations have had effects on wages or standards with the possible exception of the Fight for $15 movement in terms of achieving minimum wage increases that appear to be linked to recent wage growth for lower-paid workers (Gould 2019 ). Although some have succeeded in extending opportunities for voice (Coworker.org), labor protections (Domestic Workers Alliance), and job benefits such as health insurance (Freelancers Union) or training (Domestic Workers Alliance) to specific groups of workers who are otherwise unable to access them, none have achieved a level of scale at which they could have an impact on the overall economy or their industry the way that unions’ pattern bargaining did. Nor have any developed a fully self-sustaining revenue model: most still rely on financial support from foundations or unions (Rolf 2016 ). Thus, whether these emerging groups will be successful in building new sources of power that can achieve effects anywhere close to the effects of traditional unions remains to be seen. Clearly, however, the range and number of such efforts indicate that today’s labor advocates are looking to build worker voice and bargaining power in ways not limited to or constrained by existing labor law, union-management relations, or collective bargaining. This has profound implications for the future of labor policy.

• IMPLICATIONS FOR POLICY

We now address three interrelated questions. First, what do the data on the current state of worker voice and representation imply for the future of labor policy? Second, what has the history of unions and union-management relations taught us about how labor policy fits with and might contribute to economic policies capable of improving living standards for the majority of Americans? Third, looking beyond policies for worker voice and representation, what other actions might government policymakers take to improve employment standards for union and non-union workers? We end with some more preliminary thoughts about how labor and employment policy might also contribute to meeting the challenges of technological innovations that lie ahead.

The evidence is quite clear that contemporary labor law is failing to deliver on its intended purpose of providing workers the ability to decide whether they want union representation. The survey data presented earlier show that a large and growing number of workers who express an interest in union membership have been and continue to be unable to get it. The best study of the union-organizing process proscribed in the National Labor Relation Act further reinforces this conclusion. John-Paul Ferguson ( 2008 ) traced the outcomes of organizing and first contract negotiations processes overseen by the National Labor Relations Board and the Federal Mediation and Conciliation Service from 1999 to 2004. He finds that only 20 percent of those processes that showed enough support to request an election were successful in achieving an initial collective bargaining contract. 4 If the employer resisted to the point the union filed an unfair labor practice charge, the union success rate fell to just below 10 percent. These results suggest that, in reality, employers decide whether workers who express a desire for union representation will get it.

Many other features of labor law are equally ineffective, outdated, or—as one labor law scholar termed it—“ossified” (Estlund 2010 ). In a paper prepared for the seventh-fifth anniversary of the NLRA, Kochan ( 2011 ) suggests that five doctrines that need reconsideration are especially problematic. One pertains to distinctions between who is eligible for union membership and who is excluded. A second relates to the exclusion of topics from mandatory subjects of bargaining that workers want to influence. A third involves constraints on direct forms of employee engagement and participation in decisions about how work is organized or how to improve workplace operations and performance. A fourth is the role of exclusive representation. Last is the determination of separate bargaining units for occupational groups within an enterprise or workplace. This list could go on in regard to features that carry over from labor law conceived in the 1930s for a largely industrial economy that do not fit well with today’s economy and workforce. Indeed, consensus is growing among labor law experts that the time has come to take a clean slate approach to the design of a new labor law in contrast to the multiple failed efforts (such as those in 1977, 1995, and 2008) to make incremental reforms to the existing law. A broad-based discussion of what these new features of labor law should entail is now under way (Milano 2018 ).

• STARTING POINTS FOR A NEW LABOR POLICY

Although discussions of the features of a new labor law are only in the early stages, the evidence reviewed here suggests several basic design parameters for both an updated labor law and a labor policy that promotes forms of labor-management relations that might contribute to building a new productivity- and wage-enhancing social contract.

First, any new labor law and policy has to deliver on the core principle of freedom of association, especially given the evidence that interest in joining a union has increased in recent decades. Workers should be able to decide whether they want representation and those who do should have ready access to institutions and processes that allow them to express their voices at work in ways that allow them to influence the range of working conditions of importance to them. The United Nations’ International Labor Organization includes freedom of association as one of its fundamental principles. That is, workers should have the ability to express their voice collectively and participate in the determination of their working conditions through collective bargaining or other means. As Albert Rees ( 1963 ) clearly stated decades ago, the political functions that unions serve in a democratic society may be as or more important than their economic functions. This principle is often lost or overlooked in economic policy discussions about unions. We present it here as the starting point for building a future labor policy.

Second, given the economic (potentially positive and potentially negative) effects of collective representation, labor policy (both the law and its affiliated administrative arrangements) should be integrated with and an integral part of national economic policies capable of supporting high and increasing levels of productivity that are accompanied by increasing wages and economic security. This is the essence of the old social contract; new ways need to be crafted to achieve similar results in today’s significantly different economic and technological environment. Calls for viewing labor policy as an integral part of economic policy have been made before but have largely been ignored by those in charge of economic policy in both Democratic and Republican administrations. This needs to change.

Third, the results of our worker voice research to date suggest that “no one-size shoe” approach to voice at work fits all issues or all workers. This implies that labor law needs to open up to support a range of voice options that include but are not limited to collective bargaining, direct employee engagement in work design and improvement efforts, consultation or representation on the broad employment strategies adopted by employers through institutions such as works councils (representative and consultative bodies elected by all workers in an establishment that are common in Europe by are not allowed under current U.S. labor law) or representation on company boards (Hirsch 2007 ). Recognizing that “pattern bargaining” is no longer feasible as an instrument for reducing cross-firm income inequality or diffusing high-road strategies, some argue for establishing sectoral bargaining or industry-specific wage boards to set minimum standards (Madland 2018 ).

Fourth, labor policies need to promote high-quality labor-management relationships that contribute both to worker voice and to economic performance. This in turn calls for endorsement of models that support employee engagement, flexibility, investments in training and workforce development, and the types of labor-management partnerships discussed earlier.

Finally, the history of failed efforts at labor law reform suggest one other design principle. Prior efforts have been largely technical affairs among labor policy experts and narrowly debated political battles between labor and management and advocates. Yet the biggest changes in American labor policy have been achieved in times of widespread activism by workers who captured the attention of the American public. The NLRA was enacted in the midst of the Great Depression, when organizing and strike activity were rising and concern over social and political stability was growing. The 1947 amendments to the NLRA were passed when growing numbers of people disapproved of labor unions, presumably on the basis of the notion that labor had become too powerful and too disruptive a force. Public-sector workers began gaining access to collective bargaining in the 1960s in states where teacher unions and others were agitating and engaging in strikes in the absence of effective options for dispute resolution and in the context of escalating social unrest in cities across the country. The point here is that achieving a new labor policy will require a broad-based public awareness and a call to action. That necessary condition is not yet present in society. So the ultimate policy implication is to increase public awareness that labor policy is failing but that ideas on how to fix it are numerous.

• BROADER STRATEGIES FOR IMPROVING JOB QUALITY

Given the long-term nature of union decline and the historic difficulties of changing labor policies, it is important to consider policies for promoting high-road employment practices and improving job quality in all workplaces regardless of whether unions or other forms of worker voice or representation are present. Here we suggest a mix of carrots designed to support and reward firms that already follow high-productivity, high-wage practices that are complemented with enough sticks that enforce or incentivize upgrading minimum employment standards.

The policy levers for enforcing and upgrading minimum employment standards are well known and normally include some combinations of gradually raising minimum wages or the Earned Income Tax Credit; setting a joint employer standard; and rigorous targeting of enforcement of safety and health, wage and hour, and other workplace regulations on employers and sectors with the most egregious violation histories. Combinations of these levers would be the equivalent of what we described earlier as a union shock effect on low-standard employers. The policies aim to establish a universal minimum on various working conditions and compensation, raising the floor so that there is less room for low-road employers to undercut others on labor costs. Charles Brown and Daniel Hamermesh ( 2019 ) summarize much of the research to date as showing minimal disemployment effects with the caveat that longer-term effects are harder to predict without making contestable assumptions about the substitutability of technology and labor. In addition to their review, we also highlight the work of Doruk Cengiz and his colleagues ( 2019 ), which focuses on how minimum wage changes affected employment of low-wage workers specifically (those at or slightly above the existing minimum wages) and finds no significant disemployment effects for low-wage workers but seemingly spurious disemployment effects do show up further up the wage distribution. One reason that the minimum wage disemployment effects appear to be minimal is that employers enlist productivity-enhancing actions similar to those set in motion by the shock effects of union-negotiated increases (Hirsch, Kaufman, and Zelenska 2015 ). In their article, Brown and Hamermesh also discuss how changing overtime rules (such as the Obama administration’s attempt at increasing the overtime salary threshold)—a lever that arguably affects more middle-income workers—can reduce workers’ hours and increase effective hourly pay but potentially at the expense of lower overall work hours and gross domestic product. Other levers seek to plug the holes in existing labor law and standards that businesses may exploit to avoid mandated benefits or liability for workers’ well-being. Fissuring of the workplace—which David Weil ( 2019 ) notes can contribute to inequality, reduce access to benefits and safety net protections, and “unravel” the social networks of workers to lead firms—suggests the need to counteract these effects with policies to affirm a joint standard or prevent misclassification of independent contractors. The resources afforded by the government to monitoring and enforcing these labor standards are often inadequate, but a complementary force of worker voice and representation could work from the bottom up, empowering workers to identify and resolve or flag labor violations, an idea that dates back to Sidney and Beatrice Webb’s Industrial Democracy :

To get the principle of a National Minimum unreservedly adopted; to embody it in successive Acts of Parliament of the requisite technical detail; to see that this legislation is properly enforced; to cause the regulations to be promptly and intelligently adapted to changes in the national industry, requires persistent effort and specialised skill. For this task no section of the community is so directly interested and so well-equipped as the organized trades, with their prolonged experience of industrial regulation and their trained official staff. (1897, 817)

The importance of work-life balance to job quality has come to the forefront in recent years as the lack of flexibility and the motherhood penalty are the likely suspects for recent stagnation in the women’s labor-force participation and the closing of the gender pay gap in the United States (Doran, Bartel, and Waldfogel 2019 ). To the extent that policy can provide affordable childcare and directly support paid family leave, it will reduce existing inequalities in the availability or affordability of these benefits and make it less likely for businesses to discriminate against women in hiring or promoting if mandates were used instead. Relatedly, flexible work arrangements in terms of work schedule and location can allow more individuals to balance the needs of work and home, which again can increase more individuals’ attachment to the workforce. These policies are instrumental in not only closing gender gaps but also making jobs more compatible with needs of today’s workers.

Policies that reward high-road firms are less well developed and tested. For years, the Occupational Safety and Health Administration has had a voluntary protection program that absolves establishments from periodic government inspections if they meet or exceed average injury rates for their industry and have comprehensive safety management practices in place. Other initiatives of this sort would include prevailing wage laws or giving preference to government contractors that meet or exceed specified wage, training, or other job quality thresholds. Still other options would be to use tax incentives to encourage or reward investments in training or profit sharing, which have been found to improve productivity, workers’ investment in training, and wage growth (Azfar and Danninger 2001 ). These are simply examples of specific policy actions that can be considered. The general principle might be to find the best mix of sticks and carrots that produce the same dynamic adjustment strategies as the union shock effect did in an era of strong unions.

• TECHNOLOGY AND THE FUTURE OF WORK

All of these options deserve consideration, but perhaps the single biggest challenge, and perhaps opportunity, for policy innovations lies in harnessing anticipated changes in technologies to improve job quality and to build a new social contract at work. How to do this is a topic of widespread debate and discussion today yet to date no consensus has been reached on the mix of policies best suited to this task. Our suggestions here are thus designed more as inputs to these debates and to encourage actions that might test the ability to build a new social contract than to provide final answers.

Most discussions about technology and the future of work focus on the need for additional training for workers most at risk of displacement from technological changes. The displacement effects of robots could be substantial (Borjas and Freeman 2019 ; Acemoglu and Restrepo 2017 ). The need for training is also a sensible idea given the evidence of growing demand for advanced technical and social skills and evidence that technical skills have a relatively high rate of depreciation (Deming 2017 ). However, training is likely to have limited success in terms of take up or positive returns when workers are already at risk of or facing displacement. But if done in anticipation of technological changes and before the changes appear at the workplace, workers will be better prepared to adapt to new technologies. Again, this could be encouraged in a variety of ways, such as through tax credits or other incentives for broad-based human capital investments, joint worker and union management training programs funded as a part of the overall wage bill, or individual training accounts that move with workers across jobs and employers.

Although increased investments in training are clearly warranted, too often training or upskilling the workforce is viewed as the only policy lever for addressing changing technologies. We see training investments as a necessary but not a sufficient policy action. It is equally important to provide workers, whether through unions, works councils, or informal methods, the right and ability to participate in the earliest stages of the technology design decisions in order to integrate changes in work processes and tasks with the design of new technologies. There is both long-standing (MacDuffie and Krafcik 1992 ) and more recent (Brynjolfsson and Milgrom 2013 ; Hitt and Tambe 2016 ; Litwin 2011 ) evidence that effective integration of technology and work design strategies generate higher productivity than when technologies are designed and implemented in isolation. Yet evidence is scant that industry practice or government policies that subsidize development of new technologies have taken this evidence into account (Bonvillian and Singer 2017 ). We are encouraged to see that this issue is now getting attention in some settings. The 2018 contracts negotiated between a number of large hotels in various cities and UNITE-HERE, for example, provide for a comprehensive provisions including advance notice of major technological changes, union participation in early stage technology decision processes, enhanced training in anticipation of coming technologies, and adjustment and income supports for workers displaced by technological changes (Johnston 2018 ). These might serve as the generic elements for a national technology and work policy that, appropriately adapted to fit different circumstances, should be made available to all workers.

The wide-ranging discussions of technology and the future of work could serve as a focal point for bringing business, labor, government, and educators together to forge the starting principles for a new social contract at work.

↵ 1. Using National Labor Relations Board election report data ( 2019 ), we see little change to the number of employee-initiated elections held, the share of elections won, or the number of employees eligible to vote between the years of 2011 and 2018.

↵ 2. For each survey, we restrict the sample to those employed who are eighteen or older, work twenty hours or more per week, and are not self-employed. Both the 1995 and 2017 samples exclude those in upper management or who are owners or related to the owners. The 1995 sample also excluded public-sector workers and those at small firms (twenty-four or fewer employees).

↵ 3. We estimate this number by assuming that every non-union worker who would want to join a union can join a union. This is calculated as the product of the 48 percent of non-union workers who would vote for a union in our sample by the total number of non-union workers in the 2017 Current Population Survey Outgoing Rotation Group (CPS ORG) microdata. We employ most of the same sample restrictions in the CPS ORG as in our sample: workers who are currently employed, working for pay, are eighteen years or older, and do not belong to a union or professional association. We are not able to exclude upper-level management or ownership in the CPS ORG as we did in the Worker Voice Survey (WVS). If instead we exclude all workers in management occupations in the CPS ORG, the estimate for potential new union members drops to fifty million workers.

↵ 4. The law requires a minimum of 30 percent support but most unions will not file a petition for an election unless a majority of potential voters have signed cards indicating they want to be represented.

• © 2019 Russell Sage Foundation. Kochan, Thomas A., and William T. Kimball. 2019. “Unions, Worker Voice, and Management Practices: Implications for a High-Productivity, High-Wage Economy.” RSF: The Russell Sage Foundation Journal of the Social Sciences 5(5): 88–108. DOI: 10.7758/RSF.2019.5.5.05. Funding for this research was provided by the MIT Good Companies-Good Jobs Initiative. All views expressed are solely those of the authors. Direct correspondence to: Thomas A. Kochan at tkochan{at}mit.edu , Office 388, MIT Sloan School of Management, 100 Main St., Cambridge, MA 02142.

Open Access Policy: RSF: The Russell Sage Foundation Journal of the Social Sciences is an open access journal. This article is published under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Unported License.

• Acemoglu , Daron , and
• Pascual Restrepo
• Albers Mohrman , Susan ,
• Ramkrishnan V. Tenkasi ,
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• Gerald E. Ledford
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• Arvins , Jeremy ,
• Megan Larcom , and
• Jenny Weissbourd
• Azfar , Omar , and
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• Belman , Dale
• Benderly , Beryl Lieff
• Black , Sandra E., and
• Lisa M. Lynch
• Blanchflower , David G. , and
• Alex Bryson
• Bloch , Farrell E. , and
• Mark S. Kuskin
• Bonvillian , William , and
• Peter L. Singer
• Borjas , George J. , and
• Richard B. Freeman
• Bratsberg , Bernt , and
• James F. Ragan
• Brown , Charles C. , and
• Daniel S. Hamermesh
• James Medoff
• Robert Gibbons and
• John Roberts
• Brynjolfsson , Erik , and
• Paul Milgrom
• Budd , John W
• Card , David
• Card , David ,
• Thomas Lemieux , and
• W. Craig Riddell
• Cengiz , Doruk ,
• Arindrajit Dube ,
• Attila Lindner , and
• Ben Zipperer
• Chamberlain , Neil W. , and
• James W. Kuhn
• Clark , Kim B
• Cutcher-Gershenfeld , Joel
• Deming , David J
• DiNardo , John ,
• Nicole M. Fortin , and
• Thomas Lemieux
• Doran , Elizabeth L. ,
• Ann P. Bartel , and
• Jane Waldfogel
• Economic Policy Institute
• Estlund , Cynthia
• Farber , Henry S. ,
• Daniel Herbst ,
• Ilyana Kuziemko , and
• Suresh Naidu
• Ferguson , John-Paul
• Freeman , Richard B
• Freeman , Richard B. , and
• James L. Medoff
• Joel Rogers
• Gould , Elise
• James T. Bennett and
• Bruce E. Kaufman
• Hirsch , Barry T
• Hirsch , Barry T. ,
• Bruce E. Kaufman , and
• Tetyana Zelenska
• Hitt , Lorin M. , and
• Prasanna Tambe
• Ichniowski , Casey ,
• Kathryn Shaw , and
• Giovanna Prennushi
• Johnson , George E. , and
• Kenwood C. Youmans
• Johnston , Katie
• Katz , Harry C. ,
• Thomas A. Kochan , and
• Alexander James Colvin
• Kenneth R. Gobeille
• Mark R. Weber
• Kochan , Thomas A
• Kochan , Thomas A. ,
• Harry C. Katz , and
• Robert B. McKersie
• Robert McKersie , and
• John Chalykoff
• Kochan , Thomas A. , and
• Paul Osterman
• Christine A. Riordan
• Duanyi Yang ,
• William T. Kimball , and
• Erin L. Kelly
• Krafcik , John F
• Levinson , Harold M
• Lewis , H. Gregg
• Orley Ashenfelter and
• Lichtenstein , Nelson
• Litwin , Adam Seth
• MacDuffie , John Paul
• Thomas A. Kochan and
• Michael Useem
• MacDuffie , John Paul , and
• John F. Krafcik
• Madland , David
• Masters , Marick F. , and
• Raymond F. Gibney
• Milano , Brett
• Milgrom , Paul , and
• National Labor Relations Board
• National War Labor Board
• Osterman , Paul
• Quinn , Robert , and
• Graham Staines
• Rees , Albert
• Rolf , David
• Schmidt , Peter
• Slichter , Sumner H. ,
• James J. Healy , and
• E. Robert Livernash
• U.S. Department of Labor
• Webb , Beatrice , and
• Sidney Webb
• Weil , David
• Western , Bruce , and
• Jake Rosenfeld

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Annual Review of Political Science

Volume 20, 2017, review article, labor unions, political representation, and economic inequality.

• John S. Ahlquist 1
• View Affiliations Hide Affiliations Affiliations: School of Global Policy and Strategy, University of California San Diego, La Jolla, California 92093; email: [email protected]
• Vol. 20:409-432 (Volume publication date May 2017) https://doi.org/10.1146/annurev-polisci-051215-023225
• First published as a Review in Advance on March 09, 2017
• © Annual Reviews

Decades of research across several disciplines have produced substantial evidence that labor unions, on balance, reduce economic disparities. But unions are complicated, multifaceted organizations straddling markets and politics. Much of their equality-promoting influence occurs through their ability to reduce class-based inequity in politics and public policy. Declining unionization across much of the developed world is eroding workers’ bargaining power. Reduced economic leverage puts pressure on union solidarity and weakens labor-based political movements. Important research design problems and significant heterogeneity across unions, regions, countries, and time imply a continued need for more work.

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New Report Shows Greater Interest in Labor Unions, Especially Among Young Workers

UC San Diego School of Global Policy and Strategy findings reveal there is a rise in “union-curious” employees in the U.S.

By Christine Clarke | UC San Diego Today

Anew report from the University of California San Diego School of Global Policy and Strategy reveals significant changes in support for labor unions among U.S. workers.

The  report , published by the Economics Policy Institute, delves into the evolving attitudes toward unions and identifies three major shifts are occurring in U.S. workers: a recent, marked decline in opposition to labor unions, a rise of workers who are interested in—but unsure about—unions and an emerging generation gap in attitudes toward unionization between younger and older workers.

“While we compared levels of support for workplace unionization across workers in different industries and demographic subgroups, the biggest trend we see is that a large generational divide is emerging that was not apparent even a few years ago,” said  John Ahlquist , professor at the School of Global Policy and Strategy and coauthor of the report. “Workers 30 and under are far more likely than older workers to report both support for and uncertainty about unionization.”

He added that the research shows a remarkable shift in public opinion toward unions. A significant and growing share of workers express ambivalence, indicating they are unsure whether they would vote for union representation. This group, dubbed the “union curious,” represents a pivotal demographic in the future of labor movements.

“The rise of the ‘union curious’ highlights both the challenges and opportunities facing unions today, as they seek to convert ambivalence into active support and organization,” Ahlquist said. “Unions need to engage and educate workers, especially the younger generation, to harness this newfound interest.”

“Essential workers,” especially younger ones, largely express dissatisfaction with their careers

The report is based on a 2022 survey from the Worker Empowerment Research Network (WERN), focusing on about 2,500 frontline workers in five specific low-wage industries post-COVID-19: health care, hospitality, retail, telecommunications and warehousing. These workers’ opinions on unions are important because these sectors experienced the most upheaval during COVID and there has been major union activity within these industries.  

Unlike other surveys with broad national samples, this survey zeroes in on job satisfaction, workplace issues (e.g., wage theft, harassment, scheduling instability) and workers’ attitudes toward unionization.

The results of this survey were compared to other similar surveys conducted recently and in prior decades to present a comprehensive analysis of public attitudes toward labor unions.

Comparisons reveal that outright opposition to unionization has dramatically declined. This is especially true for workers surveyed in five specific low-wage industries.

“Bad jobs increase the likelihood of voting for the union and reduce both uncertainty and resistance to unionization,” the authors write. “A worker who experienced four different problems at work has double the expected probability of voting for a union compared with a worker who reported no major problems at work.”

Recent union activity does not equate to a rise in union membership

The report also contextualizes these findings within broader trends, including the recent surge in strikes and significant collective bargaining agreements that have achieved notable wage increases and nonwage breakthroughs in various industries.

“While there has been more union activity and some successes, such as writers’ strike in Hollywood as well as recent wins for the United Automobile Workers and Teamsters unions, the actual number of workers who are members of labor unions, are represented by labor union, or working in their union contracts has continued to decline,” Ahlquist said.

He added the report has interesting implications for the future of work.

“When you look at what young people are saying now and how that will project that into the future, they show they have some demands and presumably a level of dissatisfaction with what they’re seeing in their careers in these five industries,” he said. “What that turns into over time is dependent on how humans react and how employers and the economy evolve.”

Coauthors of the report include Jake Grumbach of the Goldman School of Public Policy at the University of California, Berkeley and Thomas Kochan of the MIT Sloan School of Management.

Read the full report Rise of the ‘union curious:’ Support for unionization among America’s frontline workers.”

Christine Clark

About author, related posts, extreme heat in india: a crisis on the rise, new $42m grid-tech sandbox will help get more renewables on electric grids, 7 ways heat impacts health.

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U.S. Department of the Treasury

Labor unions and the u.s. economy.

By Laura Feiveson, Deputy Assistant Secretary for Microeconomics

Today, the Treasury Department released a first-of-its-kind report on labor unions, highlighting the evidence that unions serve to strengthen the middle class and grow the economy at large. Over the last half century, middle-class households have experienced stagnating wages, rising income volatility, and reduced intergenerational mobility, even as the economy as a whole has prospered. Unions can improve the well-being of middle-class workers in ways that directly combat these negative trends. Pro-union policy can make a real difference to middle-class households by raising their incomes, improving their work environments, and boosting their job satisfaction. In doing so, unions can help to make the economy more equitable and robust.

Over the last century, union membership rates and income inequality have diverged, as shown in Figure 1. Union membership peaked in the 1950s at one-third of the workforce.  At that time, despite pervasive racial and gender discrimination, overall income inequality was close to its lowest level since its peak before the Great Depression, and was continuing to fall.  Over the subsequent decades, union membership steadily declined, while income inequality began to steadily rise after a trough in the 1970s. In 2022, union membership plateaued at 10 percent of workers while the top one percent of income earners earned almost 20 percent of total income.

Figure 1: Union Membership and Inequality

While the overall U.S. economy has grown over the past few decades, the rise in inequality can be a proxy for the experience of many middle-class households. The income of the median family rose only 0.6 percent per year, in contrast to average personal income per household which rose 1.1 percent per year, as seen in Figure 2.  And, notably, other markers of middle-class stability have deteriorated since the 1970s. Income has become more volatile, [1] the amount of time spent on vacation has fallen, [2] and middle-class Americans are less prepared for retirement. [3] Intergenerational mobility has declined—90 percent of children born in the 1940s earned more than their parents did at age 30, while only half of children born in the mid-1980s did the same. [4]  

Figure 2: Income and Wage Growth since the 1960s

So, how could unions help? Treasury’s report shows that unions have the potential to address some of these negative trends by raising middle-class wages, improving work environments, and promoting demographic equality. Of course, unions should not be the only solution to these structural trends. But the evidence below and in the report suggests that unions can be useful in building the economy from the middle out.

Wages 

One of the most oft-cited benefits of unions is the so-called “union wage premium”—the amount that union members make above and beyond non-members.  While simple comparisons of the wages of union workers and nonunion workers find that union workers typically make about 20 percent more than nonunion workers, [5] economists turn to other types of analysis to capture causal effects of unions on wages. The first approach controls for many worker and occupation characteristics with the goal of comparing the wages earned by two similar workers that differ only in their union status. The other empirical approach is “regression discontinuity analysis,” which compares the wages in workplaces which just barely passed a vote to unionize against wages in workplaces that barely failed to pass the unionization vote. All in all, the evidence from these two approaches points to a union wage premium of around 10 to 15 percent, with larger effects for longer-tenured workers. [6]

Work environments

Worker wellbeing is greatly affected by non-wage benefits. Some benefits, such as healthcare benefits and retirement benefits, are a part of the compensation package and have substantial monetary value. Other features of the work environment, like flexible scheduling or workplace safety regulations, may not have direct monetary value but could still be highly valued by workers. For example, one study estimated that the average worker is willing to give up 20 percent of wages to avoid having their schedule frequently changed by their employer on short notice. [7] Another study, co-authored by Secretary Yellen, found that 80 percent of people who like their jobs cite a non-wage reason as the primary cause of their satisfaction and, conversely, 80 percent of people who dislike  their jobs cite non-wage reasons to explain their dissatisfaction. [8]

There is strong evidence that unions improve both fringe benefits and non-wage features of the workplace. Figure 3 shows how much more likely it is for a union worker to be offered certain amenities than a nonunion worker. While these simple comparisons reflect correlations only, studies that use more robust empirical approaches find the same: unions have had a large hand in improving work environments on many dimensions and, in doing so, raise the wellbeing of workers and their families. [9]

Figure 3: Fringe Benefits and Amenities

Workplace Equality

The diverse demographics of modern union membership mean that the benefits of any policy that strengthens today’s unions would be felt across the population.Union membership is now roughly equal across men and women. In 2021, Black men had a particularly high union representation rate at 13 percent, as compared to the population average of 10 percent. [10]  

Unions promote within-firm equality by adopting explicit anti-discrimination measures, supporting anti-discrimination legislation and enforcement, and promoting wage-setting practices that are less susceptible to implicit bias. As an example of egalitarian wage-setting practices, single rate or automatic progression wage structures contribute to lower within-firm income inequality compared to firms that make individual determinations. [11] These types of practices, and others like publicly available pay schedules, benefit women and vulnerable workers who can be less likely to negotiate aggressively for pay raises. 

Empirical studies have confirmed that unions have, indeed, closed race and gender gaps within firms. For example, one study finds that the wage gap between Black and white women was significantly reduced due to union measures. [12] Another study provides evidence of how collective bargaining has reduced gender wage gaps amongst teachers. [13]

The positive effects of unions are not limited to union workers. Nonunionized firms in competition with unionized workplaces may choose to raise wages, change hiring practices, or improve their workplace environment to attract workers. [14] Unions can also affect workplace norms by, say, lobbying for workplace safety improvements, or advocating for changes in minimum wage laws. [15] The empirical evidence finds that these positive spillovers exist. Each 1 percentage point increase in private-sector union membership rates translates to about a 0.3 percent increase in nonunion wages. These estimates are larger for workers without a college degree, the majority of America’s workforce. [16]  

Unions may also produce benefits for communities that extend beyond individual workers and employers by enhancing social capital and civic engagement. Union members vote 12 percentage points more often than nonunion members, and nonunion members in union households vote 3 percentage points more often than individuals in nonunion households. [17] In addition, union members are more likely to donate to charity, attend community meetings, participate in a neighborhood project, and volunteer for an organization. [18]

Increased unionization has the potential to contribute to the reversal of the stark increase in inequality seen over the last half century. In turn, increased financial stability to those in the middle or bottom of the income distribution could alleviate borrowing constraints, allowing workers to start businesses, build human capital, and exploit investment opportunities. [19]  Reducing inequality can also promote economic resilience by reducing the financial fragility of the bottom 95 percent of the income distribution, making these Americans less sensitive to negative income shocks and thus lessening economic volatility. [20] In short, unions can promote economy-wide growth and resilience.

All in all, the evidence presented in Treasury’s report challenges the view that worker empowerment holds back economic prosperity. In addition to their effect on the economy through more equality, unions can have a positive effect on productivity through employee engagement and union voice effects, providing a road map for the type of union campaigns that could lead to additional growth. [21] One such example found that patient outcomes improved in hospitals where registered nurses unionized. [22]

The Biden-Harris Administration recognizes the benefits of unions to the middle class and the broader economy and has taken actions, outlined in Treasury’s report, to empower workers. There have been promising signs: union petitions in 2022 rose to their highest level since 2015, [23] and public opinion in support of unions is at its highest level in over 50 years. [24] The evidence summarized here and in Treasury’s report suggest these burgeoning signs of strengthening worker power are good news for the middle class and the economy as a whole. 

[1] Dynan, Karen, Douglas Elmendorf, and Daniel Sichel. 2012. “The Evolution of Household Income Volatility.” The B.E. Journal of Economic Analysis & Policy 12 (2).

[2] Van Dam, Andrew. 2023. “The mystery of the disappearing vacation day.” The Washington Post, February 10, 2023.

[3] Johnson, Richard W., and Karen E. Smith. 2022. “How Might Millennials Fare in Retirement?” Urban Institute , September 2022.

[4] Chetty, et al. (2017).

[5] U.S. Bureau of Labor Statistics. 2023. Table 2.: Median weekly earnings of full-time wage and salary workers by union affiliation and selected characteristics. Last modified January 19, 2023.

[6] For example: Gittleman, Maury, and Morris M. Kleiner. 2016. "Wage effects of unionization and occupational licensing coverage in the United States."  ILR Review  69 (1): 142–172; Kleiner, Morris M., and Alan B. Krueger. 2013. “Analyzing the Extent and Influence of Occupational Licensing on the Labor Market.” Journal of Labor Economics 31 (2): S173–S202; DiNardo, John, and David S. Lee. 2004. “Economic Impacts of New Unionization on Private Sector Employers: 1984–2001.” The Quarterly Journal of Economics 119 (4): 1383–1441; Frandsen, Brigham R. 2021. “The Surprising Impacts of Unionization: Evidence from Matched Employer-Employee Data.” Journal of Labor Economics 39 (4): 861–894.

[7] Mas, Alexandre, and Amanda Pallais. 2017. "Valuing alternative work arrangements."  American Economic Review  107 (12): 3722–59.

[8] Akerlof, George A., Andrew K. Rose, and Janet L. Yellen. 1988. "Job switching and job satisfaction in the US labor market."  Brookings Papers on Economic Activity  1988 (2): 495–594.

[9] Knepper, Matthew. 2020. “From the Fringe to the Fore: Labor Unions and Employee Compensation.” The Review of Economics and Statistics  102 (1): 98–112.

[10] Bureau of Labor Statistics (BLS) and author’s calculations using BLS data, accessed through IPUMS. Data reflect 2022 values. Sample is employed 16+ year olds. Excludes workers represented by, but not a member of, unions.

[11] See, e.g., Card (1996) and Freeman (1982). Freeman, Richard B. 1982. "Union wage practices and wage dispersion within establishments." ILR Review 36 (1): 3–21.

[12] Rosenfeld, Jake, and Meredith Kleykamp. 2012. “Organized Labor and Racial Wage Inequality in the United States.” American Journal of Sociology 117 (5): 1460–1502.

[13] Biasi, Barbara, and Heather Sarsons. 2022. "Flexible wages, bargaining, and the gender gap."  The Quarterly Journal of Economics  137 (1): 215–266.

[14] Fortin, Nicole M., Thomas Lemieux, and Neil Lloyd. 2021. "Labor market institutions and the distribution of wages: The role of spillover effects."  Journal of Labor Economics  39 (S2): S369–S412; Taschereau-Dumouchel, Mathieu. 2020. "The Union Threat."  The Review of Economic Studies  87 (6): 2859–2892.

[15] The impact of changes in government policy arising out of union advocacy is not the focus of this paper; however, Ahlquist (2017) suggests that advocacy plays an important role in unions’ impacts on the labor market. Spillovers and “threat effects” within the labor market, however, are discussed in this paper. Ahlquist, John S. 2017. “Labor Unions, Political Representation, and Economic Inequality.” Annual Review of Political Science 20 (1): 409–432. 

[16] Note: Rosenfeld, Denice, and Laird (2016) do not interpret their estimates causally. Their approach suffers from many of the CPS’s sample size limitations. Although the CPS ostensibly reports quite detailed occupational codes, Rosenfeld, Denice, and Laird estimate regressions with only four occupational codes and 18 industry codes. This data limitation greatly increases the risks that the regression-adjusted approach cannot control for selection effects into unionization. 

[17] This 12-percentage-point union voting premium largely reflects socioeconomic factors associated with individuals who join a union. However, when comparing members with non-members who exhibit similar characteristics, there remains a union voting premium of 4 percentage points. Freeman, Richard B. 2003. “What Do Unions Do…to Voting?” National Bureau of Economic Research , working paper no. 9992.

[18] Zullo, Roland. 2011. “Labor Unions and Charity.” Industrial and Labor Relations Review 64 (4): 699–711. 

[19]  Aghion, P., E. Caroli, and C. Garcia-Penalosa. 1999. “Inequality and Economic Growth: The Perspective of the New Growth Theories.” Journal of Economic Literature 37 (4): 1615–60.

[20]  Kumhof, Michael, Romain Rancière, and Pablo Winant. 2015. “Inequality, Leverage, and Crises.” American Economic Review 105 (3): 1217–45.

[21] Doucouliagos, Christos, Richard B. Freeman, and Patrice Laroche. 2017. The Economics of Trade Unions: A study of a Research Field and Its Findings . London: Routledge.

[22] Dube, Arindrajit, Ethan Kaplan, and Owen Thompson. 2016. “Nurse unions and patient outcomes.”  ILR Review  69 (4): 803–833.

[23] National Labor Relations Board. 2022. “Election Petitions Up 53%, Board Continues to Reduce Case Processing Time in FY22.” Press release. October 6, 2022.  https://www.nlrb.gov/news-outreach/news-story/election-petitions-up-53-board-continues-to-reduce-case-processing-time-in .

[24] McCarthy, Justin. 2022. “U.S. Approval of Labor Unions at Highest Point Since 1965.” Gallup , August 30, 202 2.

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RESEARCH December 13, 2022

The latest research on unions demonstrates that they reduce the spread of COVID-19 for workers and the broader public

• The experience of of workers amid the COVID-19 pandemic shows that U.S. workers need labor unions because neither government regulations nor market forces are sufficient to protect workers.
• The U.S. Occupational Safety and Health Administration has improved workplace safety since its founding in 1971, yet thousands of workers are killed and millions are maimed at work each year in the United States.
• Relying on market forces alone to help address worker safety problems is unlikely to meaningfully improve workplace safety because many U.S. workers find it difficult to quit even when facing poor working conditions.
• U.S. workers also may be deterred from moving themselves and their families to new job opportunities because of important family and community ties in their present location, which in turn can lead to local labor markets that are riddled with market failures, such as unsafe working conditions.
• This report demonstrates that labor unions in one key sector of the care economy—nursing homes—can mitigate these market failures by providing workers with a voice in the workplace and enabling them to bargain collectively with their employers.
• This report details why safe worksites are often won through union-led struggles, not automatically generated by market competition, focusing on nursing homes and the broader U.S. economy.
• The benefits of unionization may be especially large for Black workers, who are often exposed to the most dangerous workplace hazards, in nursing homes and writ large in U.S. workplaces.
• The findings in this report suggest that unionization improves health outcomes for workers and reduces racial health inequalities—dynamics consistent with broader research that links public health and racial equality to stronger economic growth.

Ros Reggans was overjoyed when she learned that her employer, a Chicago-area nursing home chain, had received more than $12 million in COVID-19 relief funds through the 2020 Coronavirus Aid, Relief, and Economic Security, or CARES, Act. But when she learned that the nursing home was not planning on using these funds to provide staff with more personal protective equipment, higher wages, and paid sick time, she organized her co-workers to go on strike.

“Our patients were dying, our co-workers were dying, and you’re gonna tell me there’s no support for our work? That didn’t feel right to me,” Reggans said. 1 For more than a week, 700 nurses, certified nursing assistants, dietary workers, and other support staff walked picket lines, undeterred by heavy snow and an intransigent boss. Reggans, a Black certified nursing assistant, is also a union steward for the Service Employees International Union. She saw the strike as the best way to advocate for what the staff and patients needed.

Eventually, they went back to work after receiving a modest raise, better access to the needed personal protective equipment, and bonus COVID-19 pay, a sum that allowed workers at the nursing home to stop moonlighting at multiple homes for extra money. They knew that they were at high risk of bringing COVID-19 from nursing home to nursing home and infecting patients in the process, but rent and grocery bills add up quickly on low wages. “That extra money we got wasn’t just for our pockets,” Reggans explained. “It’s pretty simple—the safer we are, the safer they are.” 2

The experience of Reggans and her union illustrates broader themes about labor unions and workplace safety that are important for understanding the past and future of public health crises.  Workers need labor unions because neither government regulations nor market forces are sufficient to protect workers. Although the U.S. Occupational Safety and Health Administration has improved workplace safety since its founding in 1971, thousands of workers are killed and millions are maimed at work each year in the United States. 3

Some economists and policymakers argue that market forces alone can help address worker safety problems. Specifically, they believe that those workers who are unhappy with working conditions can simply quit, thus incentivizing employers to improve workplace safety to retain workers. Relying on market mechanisms alone, however, is unlikely to meaningfully improve workplace safety because many workers find it difficult to quit even when facing poor working conditions.

There are many reasons why this is the case. These include market frictions, such as high unemployment, employers’ monopsony power—some firms’ monopoly-like control of labor market conditons in their industries or local labor markets—fear of losing health insurance tied to employment, and incomplete information about workplace safety hazards. All of these conditions make changing jobs burdensome. 4

In addition, workers may be deterred from moving themselves and their families to new job opportunities because of important family and community ties in their present location. 5 Under such circumstances, firms no longer need to compete to retain workers, and local labor markets become riddled with market failures, such as unsafe working conditions.

Our research shows that labor unions in one key sector of the care economy—nursing homes—can mitigate these market failures by providing workers with a voice in the workplace and enabling them to bargain collectively with their employers. Viewing workplace safety as a contingent and contested outcome allows us to identify different labor market institutions, such as unions, that contribute to better and safer jobs—not just in nursing homes, but across the U.S. economy as well.

This report details why safe worksites are often won through union-led struggles, not automatically generated by market competition, focusing on nursing homes and the broader U.S. economy. As we demonstrate below, the benefits of unionization may be especially large for Black workers, who are often exposed to the most dangerous workplace hazards, in nursing homes and writ large in U.S. workplaces. Our findings suggest that unionization improves health outcomes for workers and reduces racial health inequalities. These dynamics are consistent with broader research that links public health and racial equality to stronger economic growth. 6

Unions and workplace safety

Labor unions in the United States have long helped to improve U.S. workers’ safety and guarantee safe worksites. First, unionized workforces enjoy, on average, more comprehensive health insurance coverage, which can improve the overall health of workers and allow them to see doctors more regularly without worrying as much about out-of-pocket costs. 7

Second, unionized workers tend to report workplace safety hazards more frequently to the U.S. Occupational Safety and Health Administration because they have fewer fears of management reprisals for speaking up. Third, collective bargaining agreements frequently restrict excessive hours, mediate the pace of work, and enforce the use of personal protective equipment.

In the best-case scenario, workers can use such agreements to insert occupation-specific safety measures that can become permanent features of company policy. Research on unions in healthcare industries, for example, shows that unions improve workplace safety—and even patient outcomes—by securing safe nurse-to-patient staffing ratios, more paid sick leave, and reducing worker turnover. 8 Similarly, new research finds that the presence of a union made it more likely that OSHA investigators would conduct an inspection of an alleged violation. 9

The reverse is true, too. Research shows that policies that lead to de-unionization, such as so-called right-to-work legislation that is popular in Southern and Midwestern states, have significantly increased occupational fatalities. 10

Why unions made a difference in workplace safety amid the pandemic

The union difference was illuminated by the dangers of the pandemic workplace. COVID-19 is, among many things, an occupational disease because essential workers were disproportionately exposed and died at higher rates. During the first year of the pandemic, researchers find that 68 percent of COVID-induced fatalities among working-age adults were among low-wage workers in retail and service industry jobs. 11 A similar study finds that workers in essential industries were roughly twice as likely to die from COVID-19 than were workers in nonessential industries. 12

Through strikes, walkouts, and protests, essential workers registered their discontent with the pandemic workplace. 13 Yet those complaints rarely translated to lasting changes unless they were backed up by a union. Unions were able to mitigate some of the most hazardous working conditions. During the pandemic, unionized workers across essential industries had greater access to paid sick leave and personal protective equipment, and were tested for COVID-19 more frequently. 14

Research also shows that unionized workers may be less likely to work multiple jobs and to live in settings associated with high COVID-19 transmission. 15 When COVID-19 first hit New York City in the spring of 2020, labor unions representing hospital workers worked closely with administrators and government agencies to rapidly expand hospital capacity while minimizing risk for workers. Unions helped secure access to necessary PPE supplies and ensured that all workers and volunteers were properly trained before being reassigned to new roles in the areas of greatest need. 16

Our own research shows that unions also worked to improve workplace safety in public schools. 17 We find that the average teachers union was associated with a 33 percent relative increase in the probability of a school district adopting a mask mandate. Our study focused on Iowa during the fall of 2020 because it was one of only 12 states that left the masking decision up to school districts at that time. Iowa was also an ideal state to study because its right-to-work law generates much higher district-level variation in unionization than is seen in states with more labor-friendly legislative environments.

We find that the leaders in Iowa’s teachers’ unions advocated for mask mandates through local school boards, a strategy that filled the policy vacuum in a state without a sweeping mask mandate. The following school year, when very few governors mandated masks in schools, this same strategy was pursued by teachers’ unions throughout the country. 18

Unions reduced the spread of COVID-19

To examine the relationship between unions and COVID-19 outcomes, our recent research focused on nursing homes, the epicenter of the pandemic in the United States. The number of deaths from COVID-19 among nursing home residents and staff are greatly overrepresented in the U.S. pandemic death toll, accounting for one-fifth of all COVID-19 deaths to date. Yet this industry is also a dramatic example of the power of labor to safeguard public health.

First, we studied nursing homes in New York state during the first few months of the pandemic. Even after accounting for potential confounding factors, we find that the presence of a labor union was associated with 30 percent lower COVID-19 mortality rates for nursing home residents. 19 We also discovered that unionized nursing homes were more likely to provide workers with N95 respirators.

These safer working conditions were secured by unions negotiating with employers, organizing protests, and raising public awareness about PPE shortages. 20 These findings suggest that more PPE translated to differences between life and death among unionized and nonunionized long-term care homes during the early phase of the pandemic, when PPE shortages were more widespread.

We then extended this study to the continental United States, assessing whether the benefits of unionization continued from June 2020 through March 2021, the first full year of the pandemic. We find robust evidence that unions were associated with 10.8 percent lower COVID-19 mortality rates among nursing home residents across the country, as well as 6.8 percent lower COVID-19 infection rates among nursing home staff. 21 With more than 75,000 COVID-19 deaths among residents in nonunionized nursing homes during the period of our study, the results suggest that there would have been approximately 8,000 fewer resident deaths in less than 10 months if all nursing home facilities had been unionized.

These findings also suggest that the mechanisms by which unions reduced COVID-19 mortality rates extended well beyond providing personal protective equipment, which increasingly became easier to access over the study period we examined. While data limitations did not allow us to pin down these mechanisms, a variety of other factors may play a role in driving the union effect, including offering paid sick leave, limiting the number of workers employed at multiple facilities, or encouraging vaccination against COVID-19.

Our regression analysis focused on variation across individual nursing homes and controlled for numerous covariates, but the basic relationship between unions and lower worker COVID-19 infection rates can be seen in the county-level maps displayed in Figure 1. A comparison of these two maps reveals that regions with lower levels of nursing home unionization had higher worker COVID-19 infection rates, just as regions with higher levels of unionization had lower worker infection rates. (See Figure 1.)

Figure 1 shows that the South, for example, had very few unionized nursing homes and high worker COVID-19 infection rates over that period of time. In contrast, the tristate area—made up of New York, New Jersey, and Connecticut—had high unionization rates and some of the country’s lowest worker infection rates. Figure 1 also clearly shows the geographical concentration of nursing home unionization rates, with the highest union density rates in a small number of counties in the Northeast, Midwest, and Northwest of the country.

Our research suggests that labor unions improved workplace safety in nursing homes during the COVID-19 pandemic. Workers in other essential industries have been coming to a similar conclusion and have been requesting union elections at a record pace. 22  The recent union victory at an Amazon.com Inc. warehouse in Staten Island, NY, for example, grew out of worker protests demanding that the company do more to reduce the workplace spread of COVID-19.

Similarly, workers at Starbucks retail stores were often motivated to unionize by similar concerns about workplace safety, winning union elections in more than 200 stores nationwide in just the past 6 months. 23 And in the gig economy, a 2022 study of ride-hail drivers during the pandemic found that workers with greater exposure to COVID-19 were more likely to express interest in joining a labor union. 24

Labor unions provide additional health premiums for Black workers

Our research findings about labor unions and COVID-19 in nursing homes have particularly important implications for racial health equity. First, the nursing home workforce is disproportionately made up of Black and Hispanic women, demographic groups that have faced higher COVID-19 infection and mortality rates throughout the pandemic, as well as greater rates of economic precarity and poor health preceding it. 25 Nursing home unions therefore help to protect some of the country’s most vulnerable workers.

Second, the health benefits of unionization may be especially large for Black workers, as discriminatory managerial practices can expose them to the most dangerous workplace tasks. 26 And third, even before the pandemic, Black workers were less likely to work in jobs with employer-sponsored health insurance, a trend that was likely exacerbated by job losses in 2020. 27 Taken together, these racial disparities help us understand how discrimination and structural racism are entwined with employment in low-wage healthcare occupations.

“Black people are put in harm’s way in nursing homes,” explains Gloria Duquette, a Black Jamaican immigrant who works in three different nursing homes in Bloomfield, CT. “The bosses are White, the supervisors are White, but most of us direct caregivers are Black. Unions have rules in place for fairness, for balance. So, it makes it harder for supervisors to play favors with White workers or discriminate against Black workers.” 28

Similar to Duquette’s explanation, scholars have identified numerous ways in which labor unions may help Black workers address workplace discrimination. First, unions educate workers about their employment rights and help them identify illegal racial discrimination. 29 Second, unions reduce workers’ fear of retaliation for voicing dissatisfaction with such discrimination. 30 Third, many unionized workplaces have formal grievance procedures that enable workers to challenge discriminatory managerial practices. 31 Moreover, research shows that unions have the effect of reducing racial resentment among their White co-workers. 32

Labor unions secure especially large wage increases for workers of color. Economists Henry Farber and Ilyana Kuziemko at Princeton Universty, Daniel Herbst at the University of Arizona, and Suresh Naidu at Columbia University analyze data from 1936 through 2019 and find that the union wage premium was larger for non-White workers than White workers. 33 Similarly, sociologists Jasmine Kerrissey and Nathan Meyers at the University of Massachusetts Amherst examine public-sector wages and find that the benefits of union membership were largest for Black and women workers. 34 Shifting focus from wages to wealth, Christian Weller at U-Mass Boston and David Madland at the Center for American Progress find that the union premium is largest for Black union households. 35

In short, there are good reasons to believe that the benefits of unionization are especially large for Black workers—which, in turn, helps reduce U.S. wage inequality and boost more equitable economic growth.

While a rich empirical literature demonstrates that the union wage premium is larger for Black workers, few studies examine how the workplace safety benefits of unionization vary across worker demographics. We therefore conducted additional analysis of COVID-19 infection rates among workers in U.S. nursing homes to see whether this union “health premium” was larger in workplaces with higher proportions of Black workers.

To do so, we gathered new data at both the county and nursing home levels. For county-level worker data by race, we use the U.S. Census Bureau’s Quarterly Workforce Indicators, which contains data on the county-level percentage of healthcare workers who are Black. For nursing-home-level worker data by race, we use recently developed estimates based on the characteristics of neighborhoods where nursing home staff reside. 36

To examine whether and how the union health premium varies across workers’ racial demographics, we built on our recent Health Affairs study of more than 13,000 U.S. nursing homes by assessing heterogeneity in the association between nursing home unions and worker COVID-19 infection rates. 37 We find that the union health premium is significantly larger for nursing homes with higher percentages of Black workers. 38

More specifically, we find that when the county-level percentage of healthcare workers who are Black is at its mean (15.7 percent), unions are associated with 6 percent lower worker COVID-19 infection rates. When the county-level percentage of workers who are Black is one standard deviation above the mean (29.4 percent), unions are associated with 14.3 percent lower worker COVID-19 infection rates. 39 (See Figure 2.)

Figure 2 demonstrates that the difference in worker COVID-19 infection rates in union and nonunion nursing homes grows more negative as the percentage of Black workers increases. In other words, the workplace health benefits of union membership during the pandemic were especially large in nursing homes with higher percentages of Black workers. 40

Conclusion and policy implications

Our research suggests that public health and well-being are linked to workers organizing into unions and thus ensuring higher labor standards. This overarching finding strengthens the case for policies that would bolster the power of U.S. workers to unionize and thereby improve workplace safety. The findings that unions provide especially large health premiums for all workers, but especially Black workers, should inform policy debates about how to alleviate the pandemic’s disproportionate impact on these workers.

Most importantly, our research provides strong evidence for the need to pass the Protecting the Right to Organize, or PRO, Act, which cleared the U.S. House of Representatives in 2021 and now awaits a vote in the U.S. Senate. The legislation would update the Wagner Act, passed almost nine decades ago, and would restore workers’ right to organize without management interference by vastly reducing the obstacles that employers throw in their way.

There are a multitude of reasons to make it easier for workers to form unions. Recent research from the Washington Center for Equitable Growth, for example, demonstrates that if the PRO Act were to facilitate unionization, it would increase workers’ wages and decrease income inequality. 41 Our research further bolsters the case for the PRO Act by demonstrating how unions improve workplace safety, highlighting the often-overlooked public health benefits of widespread unionization, especially for workers of color.

U.S. labor history—and the recent upsurges in union activity at corporations such as Amazon and Starbucks—shows that fair labor laws are not an absolute prerequisite for labor organizing. But the pandemic provided the context for a groundswell of interest in unions among the general public and U.S. workers themselves. 42 The PRO Act would make it easier for average workers to improve their jobs, a compelling rationale given lax workplace safety enforcement and the failure of labor markets to consistently deliver safe jobs.

While our research demonstrates the power of unions to improve health and safety, workers still need strong policy measures to ensure an adequate level of safety on the job. Less than 10 percent of all U.S. workers are union members, which means that ensuring greater workplace safety requires large-scale policymaking beyond the right to organize. Despite pressure from Congress and a lawsuit by the American Federation of Labor and the Congress of Industrial Organizations, the U.S. Occupational Safety and Health Administration refuses to make any permanent protocols specific to occupational exposure to COVID-19 or regulations about airborne infectious diseases. Instead, it issued voluntary guidance with loopholes large enough for the biggest U.S. companies to easily slide through.

In June 2021, the agency finally issued an Emergency Temporary Standard on airborne infectious diseases. But that regulation was hobbled soon after by the U.S. Supreme Court’s subsequent rejection of the OSHA “vaccine or test” mandate at certain workplaces. 43 A permanent standard on airborne infectious diseases—akin to the 2000 bloodborne pathogen standard that improved worker safety in the wake of the AIDS epidemic in the 1980s and the 2014 Ebola outbreak—would create enforceable legal protections for workers in industries that face significant health risks to infectious disease such as COVID-19.

Workplace safety is a crucial component of a healthy and productive economy that generates sustainable and equitable growth. But neither labor market competition nor our current underresourced regulatory framework guarantees safe workplaces. Instead, our research stresses the need for specific policy interventions that can help workers build power from the bottom up. The right to unionize and the right to a safe workplace have been eroded. Public health and safety require that workers win them back.

About the authors

Adam Dean is an assistant professor of political science at George Washington University. His research focuses on international trade and labor politics, as well as the socioeconomic determinants of public health. He received his Ph.D. from the University of Chicago, his M.Sc. from the London School of Economics, and his B.A. from the University of Pennsylvania. His second book, Opening Up By Cracking Down , was published by Cambridge University Press in October 2020.

Jamie McCallum  is an associate professor of sociology at Middlebury College. His research focuses on work and labor issues in the United States and the Global South. His third book,  Essential: How the Pandemic Transformed the Long Fight for Worker Justice , was published by Basic Books in November 2022.

Atheendar Venkataramani is an assistant professor of medical ethics and health policy at the University of Pennasylvania’s Perelman School of Medicine and the director of the Opportunity for Health Lab at Perelman. His research focuses on health and socioeconomic inequality—specifically, the effects of economic opportunities on health behaviors and outcomes, the effects of early life interventions on adult health and well-being, and the role of social policies and structural factors in shaping population health. Venkataramani received his Ph.D. in health policy and economics from Yale University in 2009 and his M.D. from Washington University in St. Louis in 2011.

Acknowledgments

We thank the Service Employees International Union for sharing data with us on the union status of U.S. nursing homes.

1. Jamie McCallum, Essential: How the Pandemic Transformed the Long Struggle for Worker Justice (New York: Basic Books, forthcoming.)

3. David Michaels and Jordan Barab, “The Occupational Safety and Health Administration at 50: Protecting Workers in a Changing Economy,” American Journal of Public Health 110 (5) (2020): 631–635, available at https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7144438/ .

4. Ann Rosenthal, “Death by inequality: How workers’ lack of power harms their health and safety” (Washington: Economic Policy Institute, 2021), available at https://www.epi.org/unequalpower/publications/death-by-inequality-how-workers-lack-of-power-harms-their-health-and-safety/ .

5. Rebecca Diamond, “The Determinants and Welfare Implications of US Workers’ Diverging Location Choices by Skill: 1980-2000,” American Economic Review 106 (3) (2016): 479–524.

6. David E. Bloom and others, “Health and economic growth: reconciling the micro and macro evidence.” Working Paper No. w26003 (National Bureau of Economic Research, 2019); Dora Costa and Richard H. Steckel, “Long-term trends in health, welfare, and economic growth in the United States.” In Richard H. Steckel and Roderick Floud, eds., Health and welfare during industrialization (Chicago: University of Chicago Press, 1997), pp. 47–90; Gopi Shah Goda, and Evan J. Soltas, “The Impacts of Covid-19 Illnesses on Workers.” Working Paper No. 30435 (National Bureau of Economic Research, 2022); Robert Lynch, “The economic benefits of equal opportunity in the United States by ending racial, ethnic, and gender disparities” (Washington: Washington Center for Equitable Growth, 2022).

7. Thomas C. Buchmueller, John DiNardo, and Robert G. Valletta, “Union effects on health insurance provision and coverage in the United States,” ILR Review 55 (4) (2002): 610–627; Jacob Goldin, Ithai Z. Lurie, and Janet McCubbin, “Health insurance and mortality: Experimental evidence from taxpayer outreach,” The Quarterly Journal of Economics 136 (1) (2021): 1–49.

8. Michael Ash and Jean Ann Seago, “The Effect of Registered Nurses’ Unions on Heart-Attack Mortality,” ILR Review 57 (3) (2004): 422–42, available at https://doi.org/10.1177/001979390405700306 ; Arindrajit Dube, Ethan Kaplan, and Owen Thompson, “Nurse Unions and Patient Outcomes,” ILR Review 69 (4) (2016): 803–33, available at https://doi.org/10.1177/0019793916644251 ; Linda H. Aiken and others, “Hospital nurse staffing and patient mortality, nurse burnout, and job dissatisfaction,” JAMA 288 (16) (2002): 1987–93, available at https://jamanetwork.com/journals/jama/fullarticle/195438 ; J. Spetz, “ Nursing wage premiums in large hospitals: what explains the size-wage effect” AHSR FHSR Annu Meet Abstr 13 (1996): 100–1.

9. Aaron Sojourner and Jooyoung Yang, “Effects of Union Certification on Workplace-Safety Enforcement: Regression-Discontinuity Evidence,” ILR Review 75 (2) (2022): 373–401, available at https://doi.org/10.1177/0019793920953089 .

10. Michael Zoorob, “Does ‘Right to Work’ Imperil the Right to Health? The Effect of Labour Unions on Workplace Fatalities,” Occupational and Environmental Medicine 75 (10) (2018): 736–738, available at https://pubmed.ncbi.nlm.nih.gov/29898957/ .

11. Elizabeth B. Pathak and others, “Joint Effects of Socioeconomic Position, Race/Ethnicity, and Gender on COVID-19 Mortality among Working-Age Adults in the United States,” International Journal of Environmental Research and Public Health 19 (9) (2022): 5479, available at https://doi.org/10.3390/ijerph19095479 .

12. Chen, Yea-Hung and others, “COVID-19 mortality among working-age Americans in 46 states, by industry and occupation,” medRxiv (2022).

13. McCallum, Essential: How the Pandemic Transformed the Long Fight for Worker Justice .

14. Alexander Hertel-Fernandez and others, “Understanding the COVID-19 Workplace: Evidence from a Survey of Essential Workforce” (New York: Roosevelt Institute, 2020), available at https://rooseveltinstitute.org/wp-content/uploads/2020/07/RI_SurveryofEssentialWorkers_IssueBrief_202006-1.pdf .

15. M. Keith Chen, Judith A. Chevalier, and Elisa F. Long, “Nursing Home Staff Networks and COVID-19,” Proceedings of the National Academy of Sciences 118 (1) (2020), available at https://doi.org/10.1073/pnas.2015455118 ; Hertel-Fernandez and others, “Understanding the COVID-19 Workplace: Evidence from a Survey of Essential Workforce”; Monita Karmakar, Paula M. Lantz, and Renuka Tipirneni, “Association of Social and Demographic Factors with COVID-19 Incidence and Death Rates in the US,” JAMA Network Open 4 (1) (2021): e2036462, available at https://doi.org/10.1001/jamanetworkopen.2020.36462 .

16. Chris Keeley and others, “Staffing Up For The Surge: Expanding The New York City Public Hospital Workforce During The COVID-19 Pandemic,” Health Affairs 39 (8) (2020): 1426–1430.

17. Adam Dean and others, “Iowa school districts were more likely to adopt COVID-19 mask mandates where teachers were unionized,” Health Affairs 40 (8) (2021):1270–6.

18. Adam Dean and Jamie McCallum, “Strong teachers unions and school mask mandates go together,” The Monkey Cage Blog, The Washington Post , August 20, 2021, available at https://www.washingtonpost.com/politics/2021/08/20/strong-teachers-unions-school-mask-mandates-go-together-our-research-finds/ .

19. Our regression model adjusts for county-level population and COVID-19 infections per capita. At the nursing home level, we adjust for the average age and acuity of residents, the percentage of residents whose primary support comes from Medicaid or Medicare, whether a nursing home is part of a chain or run for-profit, the percentage of residents who are White, the occupancy rate, and the staff-to-resident ratios for registered nurses, licensed practical nurses, and certified nursing assistants.

20. Audrey McNamara, “Nurses across the country protest lack of protective equipment,” CBS News, March 28, 2020, available at https://www.cbsnews.com/news/health-care-workers-protest-lack-of-protective-equipment-2020-03-28/ .

21. Our regression model adjusted for the same covariates as the New York study discussed above.

22. National Labor Relations Board Office of Public Affairs, “Correction: First Three Quarters’ Union Election Petitions Up 58%, Exceeding All FY21 Petitions Filed,” Press release, July 15, 2022, available at https://www.nlrb.gov/news-outreach/news-story/correction-first-three-quarters-union-election-petitions-up-58-exceeding .

23. “Current Starbucks Statistics,” available at https://unionelections.org/data/starbucks/ (last accessed September 20, 2022).

24. Michael David Maffie, “The global ‘hot shop’: COVID‐19 as a union organising catalyst,” Industrial Relations Journal (2022), available at https://doi.org/10.1111/irj.12367 .

25. David P. Bui and others, “Racial and ethnic disparities among COVID-19 cases in workplace outbreaks by industry sector—Utah, March 6–June 5, 2020,” Morbidity and Mortality Weekly Report 69 (33) (2020): 1133, available at https://www.cdc.gov/mmwr/volumes/69/wr/mm6933e3.htm ; Kathryn E. W. Himmelstein and Atheendar S. Venkataramani, “Economic vulnerability among US female health care workers: potential impact of a $15-per-hour minimum wage,” American Journal of Public Health 109 (2) (2019): 198–205, available at https://ajph.aphapublications.org/doi/10.2105/AJPH.2018.304801 .

26. Elizabeth A. Deitch and others, “Subtle yet significant: The existence and impact of everyday racial discrimination in the workplace,” Human Relations 56 (11) (2003): 1299–1324, available at https://doi.org/10.1177/00187267035611002 ; Desta Fekedulegn and others, “Prevalence of workplace discrimination and mistreatment in a national sample of older US workers: The REGARDS cohort study,” SSM-Population Health 8 (2019): 100444, available at https://doi.org/10.1016/j.ssmph.2019.100444 .

27. Marsha Lillie-Blanton and Catherine Hoffman, “The role of health insurance coverage in reducing racial/ethnic disparities in health care,” Health Affairs 24 (2) (2005): 398–408.

28. Interview conducted by Jamie McCallum.

29. Elizabeth Hirsh and Christopher J. Lyons, “Perceiving discrimination on the job: Legal consciousness, workplace context, and the construction of race discrimination,” Law & Society Review 44 (2) (2010): 269–298, available at http://www.jstor.org/stable/40783656 .

30. Richard B. Freeman, “Individual mobility and union voice in the labor market,” The American Economic Review 66 (2) (1976): 361–368, available at http://www.jstor.org/stable/1817248 .

31. Frank Dobbin, Daniel Schrage, and Alexandra Kalev, “Rage against the iron cage: The varied effects of bureaucratic personnel reforms on diversity,” American Sociological Review 80 (5) (2015): 1014–1044, available at https://doi.org/10.1177/0003122415596416 .

32. Paul Frymer and Jacob M. Grumbach, “Labor Unions and White Racial Politics,” American Journal of Political Science 65 (1) (2021): 225–240, available at https://scholar.princeton.edu/sites/default/files/pfrymer/files/ajps12537_rev.pdf .

33. Henry S. Farber and others, “Unions and inequality over the twentieth century: New evidence from survey data,” The Quarterly Journal of Economics 136 (3) (2021): 1325–1385, available at https://doi.org/10.1093/qje/qjab012 .

34. Jasmine Kerrissey and Nathan Meyers, “Public-Sector Unions as Equalizing Institutions: Race, Gender, and Earnings,” ILR Review (2021), available at https://doi.org/10.1177/00197939211056914 .

35. Christian E. Weller and David Madland, “Unions, Race, Ethnicity, and Wealth: Is There a Union Wealth Premium for People of Color?” Journal of Economics, Race, and Policy 5 (1) (2022): 25–40, available at https://doi.org/10.1007/s41996-020-00078-7 .

36. Karen Shen, “Relationship between nursing home COVID-19 outbreaks and staff neighborhood characteristics,” PLOS ONE 17 (4) (2022): e0267377, available at https://doi.org/10.1101/2020.09.10.20192203 . This data is only available for 18 U.S. states.

37. We estimate a cross-sectional negative binomial regression model. Our results are similar when we include additional interaction terms between the percentage of nursing home workers who are Black and each of our nursing-home-level covariates, as well as when we include interactions between unionization and all other covariates.

38. We find that the coefficient for the interaction between the presence of a union and the percentage of workers who are Black is negative and statistically significant.

39. These estimates are based on the county-level QWI measure of worker race. When using our nursing-home-level measure of worker race, which is only available for 18 U.S. states, we find similar results. When the percentage of workers who are Black is at its mean (18.3 percent), unions are associated with 4.4 percent lower worker COVID-19 infection rates. When the percentage of workers who are Black is one standard deviation above the mean (34 percent), unions are associated with 10.5 percent lower worker COVID-19 infection rates.

40. We also find that the union health premium is larger for Hispanic workers than White workers, but the difference is not statistically significant. This null effect may be driven by a lack of statistical power, as the mean and standard deviation for Hispanic workers (5.11 percent and 6.76 percent, respectively) are considerably smaller than those for Black workers (15.77 percent and 13.75 percent, respectively).

41. Kate Bahn and Corey Husak, “The PRO Act addresses income inequality by boosting the organizing power of U.S. workers” (Washington: The Washington Center for Equitable Growth, 2020); Farber and others, “Unions and inequality over the twentieth century: New evidence from survey data.”

42. McCallum, Essential: How the Pandemic Transformed the Long Fight for Worker Justice ; Maffie, “The global ‘hot shop’: COVID‐19 as a union organising catalyst.”

43. U.S. Occupational Safety and Health Administration, “Occupational Exposure to COVID-19; Emergency Temporary Standard” (Washington: U.S. Department of Labor, 2021), available at https://www.federalregister.gov/documents/2021/06/21/2021-12428/occupational-exposure-to-covid-19-emergency-temporary-standard/ ; Bruce Rolfsen and Robert Iafolla, “Biden’s Shot-or-Test Rule Abandoned After Supreme Court Loss (2),” Bloomberg Law , January 25, 2022, available at https://news.bloomberglaw.com/safety/covid-19-shot-or-test-regulation-to-be-withdrawn-by-bidens-osha .

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Labor Unions Research Paper

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Labor unions are organizations formed by employees for the purpose of using their collective ‘strength to improve compensation, benefits, and working conditions through bargaining; to bring fairness to the workplace through the provision of due process mechanisms; and to represent the interests of workers in the political process. Economists have traditionally viewed unions as functioning as labor market monopolies. Because they raise wages above the competitive levels set by the market, economists argue that labor unions create inefficiencies resulting in the loss of jobs and in greater income inequality in the workforce. For this reason, economists view unions as an undesirable interference in the operation of the market (Booth, 1995; Friedman & Friedman, 1980; Simons, 1948). However, some economists argue that in addition to their negative monopoly face, unions have a second, positive collective voice face. They further argue that, on balance, the positive impact of unions outweighs the negative (Bok & Dunlop, 1970; Freeman & Medoff, 1984; Reynolds & Taft, 1956).

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This discussion focuses on the role unions play—and the impact they have—in contemporary society and in the labor market. The research paper first examines the historical development of American unions. Next, it discusses the structure and government of modern unions and membership trends. The industrial relations process through which unions advocate for their members is outlined. Finally, the research paper examines the impact of unions and evaluates the two faces of unionism.

Why Do Unions Exist?

Unions are formed by employees who desire to improve their compensation, benefits, and working conditions and to bring greater fairness and due process to their workplace. Employees recognize that unless they have unusual or unique skills or talents, individuals have very little influence with their employers and very little power to improve the conditions under which they work. However, by banding together, workers are able to exert collective pressure that is more likely to force an employer to make specific improvements in the workplace. This collective power can also be used to obtain improvements through the political and legislative processes.

What Do Unions Do?

Economists generally assert that when employees are dissatisfied with their jobs, the only rational option available to them is to exit or quit their job and reenter the labor market to seek a better situation. However, some economists recognize that employees have a second alternative. Rather than exit their workplace, they can engage in voice. Engaging in voice involves trying to convince an employer to make changes in the workplace that will address employee dissatisfaction.

Employees readily understand that if they engage in voice behavior as individuals, they will probably have little success in convincing their employers to make significant changes. Even if an employee threatens to quit, an employer can, in most cases, easily replace one worker. Employees also recognize that if they combine their individual voices with those of the other employees in their workplace, they will be significantly more likely to persuade an employer to make changes. Unions are the mechanisms employees form in order to use their collective power.

Over time, employees have come to use the collective power of unions in three different ways. First, they engage in collective bargaining with employers in an effort to establish a legally binding contract that details the compensation, benefits, and working conditions in their workplaces. The goal of such a process is to negotiate terms that are better than those set by the labor market. Unions use the threat of a strike (a work stoppage that puts economic pressure on an employer by halting the production of a product or the provision of a service) to push employers to make improvements in these areas.

Second, unions establish processes and mechanisms through which employees can have a greater say in decisions that affect them. These processes can take many forms, including the establishment of grievance procedures that give employees due process when disciplined and employee involvement programs, such as labor management committees and quality-improvement plans. All of these processes are established through negotiations between the employer and the union and ultimately give employees an opportunity to voice concerns and participate in decisions about how work will be organized.

Third, the collective power of unions can be used to shape the legal and political environment in which they operate. Unions have long understood that forces beyond the employer and union relationship affect the union’s ability to represent its members’ interests. To varying degrees, unions have actively worked within the legal and political realms to mold this environment, as well as to obtain workplace improvements through the political and legislative processes. The local, statewide, and national membership of a union represents a significant voting bloc. Unions are able to provide campaign support for local, state, and federal politicians. In addition, unions help register people to vote, provide information to members and the public regarding politicians’ stance and record on employment-related issues, raise funds for candidates, and engage in get-out-the-vote initiatives. Using these financial and organizational resources, unions work “to reward labor’s [political] friends, and punish its [political] enemies” (Gould, 2004, p. 2). They also actively lobby for legislation that will benefit their members and against legislation they believe will be detrimental to their interests.

Historical Development of Unions

Most labor historians generally agree that the first real union in the United States was formed by shoemakers (then called cordwainers) in Philadelphia in 1792. By 1806, the courts banned the cordwainers, and all other unions, as conspiracies in restraint of trade. When this decision was overturned in 1842, the government found other ways to discourage the formation of unions, including issuing injunctions and the use of police and militia to put down strikes, demonstrations, and other forms of collective action. Meanwhile, most employers used a variety of strategies to fight the unionization of their workforce, including firing union activists and blacklisting them so they could not find other employment, evicting pro-union employees and their families from company-owned housing, and engaging in violence against workers who tried to organize.

These efforts on the part of employers did not entirely prevent workers from forming local, and even national, unions, but they did succeed in keeping unions relatively weak and on the defensive. However, legislation passed in the midst of the Great Depression as part of the New Deal changed the legal status of unions and ensured their existence as a central part of the U.S. economy. The National Labor Relations Act (NLRA), passed in 1935 as part of President Franklin Roosevelt’s New Deal, changed public policy toward unions in a dramatic, even radical, way. After more than a century in which government often assisted employers in the suppression of unions, the NLRA now granted most American workers in the private sector a legal right to organize, bargain collectively, and engage in strikes, if they choose to do so. Employers vehemently opposed the legislation, but it was declared constitutional by a 5-4 vote of the Supreme Court. The passage, and confirmation of the constitutionality of the NLRA by the Supreme Court in 1937, meant that the federal government would no longer side with employers against unions; rather, it would actively protect workers’ rights to organize, bargain, and strike. The NLRA included a set of rules that would dictate how employers and unions would deal with one another in the future. The violence and chaos that characterized union-employer relations for more than a century was replaced by a systematic process of industrial relations that is still in use today. And while the relationship between unions and management is still adversarial, the inherent conflict between the two parties is worked out under the rule of law, with strikes by unions and lockouts by employers used minimally and as a last resort.

One other major historical development that played a significant role in the formation of the contemporary American labor movement was the rise of public sector unions in the 1960s and 1970s. While the NLRA granted the right to organize, bargain, and strike to millions of American workers, it did not extend those rights to employees working for federal, state, or local government. These public employees did not begin to gain such rights until more than 25 years after the act’s passage.

Federal workers were the first government employees to gain the right to organize and bargain collectively. However, the bargaining rights extended to them under Executive Order 10988 in 1962 were (and are) limited. For example, federal employees were not granted the legal right to strike.

The rights of state and local government employees to form unions and bargain are granted on a state-by-state basis. A majority of states grant public employees the right to organize a union. Most also extend some rights to bargain collectively to those who organize a union (although some states, mostly in the South, do not). But only 11 states allow even some of their state and local government employees the right to strike. And while many states grant public safety employees (i.e., police, firefighters, and prison guards) some bargaining rights, none grant these workers the right to strike.

Contemporary American Unions

Unions are part of the economic framework of most developed, and many developing, nations. This is particularly the case in Western industrialized countries. However, the unions that have developed and operate in the United States over the last two centuries are somewhat unique compared to their counterparts in other nations. One of the most significant ways that U.S. unions have differed historically from unions in other countries is their acceptance of capitalism and rejection of socialism. Socialism has long been an integral part of the labor movements that developed in the United Kingdom and Ireland, western Europe, and Australia and New Zealand over the past 200 years. Even Canadian unions have had a tradition of supporting socialist principles. This uniqueness is sometimes referred to by historians as American exceptionalism and is a function of the American labor movement’s acceptance of capitalism (Lipset, 1997).

At various points in America’s history, there have been labor organizations that have promoted a socialist ideology. In the late 1800s, the leaders of the Knights of Labor led a quasi-socialist movement that attempted to organize workers on a massive scale. Initially, American workers flocked to the organization, and by 1886, the Knights had grown to 700,000 members. However, the membership quickly became disillusioned by the organization’s lack of tangible gains, and by the late 1890s, the Knights of Labor had largely disappeared.

In the early 1900s, another socialist union, the Industrial Workers of the World (IWW, also known as the Wobblies) was founded. The Wobblies were even more committed to socialism than the Knights of Labor and much more militant. Their union was based on the principle that “the working class and the employing class have nothing in common” and their stated goals were the “overthrow of capitalism” and the “seizure of the means of production” (Dubofsky, 2000).

While the IWW did attract over 100,000 members by 1917, American workers were fundamentally uncomfortable with their brand of revolutionary, socialist unionism. This, combined with heavy-handed attacks on the organization from federal, state, and local governments, led to the demise of the Wobblies as a labor union of significance (Dubofsky, 2000).

Historians suggest that the collectivism promoted by these two particular groups did not win the hearts and minds of the vast majority of American workers because of the uniquely American culture and worldview that were emerging in the late 1800s and the early 1900s. This culture emphasized individualism, egalitarianism, and a general suspicion of government, all of which were consistent with capitalism and at odds with socialism. If American workers had not embraced these capitalistic principles, the American labor movement could have taken a very different shape (Lipset, 1997).

Union Membership and Density

As U.S. unions developed during the twentieth century, both the number of union members and union density (the percentage of the labor force that belongs to a union) in the United States fluctuated over time. Figure 1 depicts the changes in union density.

From a high of 35.5% in 1945, union density fell over the next six decades to a low of 12.1% in 2007. Among the factors cited for this decline are structural changes in the economy (particularly the shift from an industrial-based to a service-based economy that occurred in the last 20 years), increasingly aggressive efforts by employers to fight unionization, weakening labor laws, and changes in the public’s attitudes toward unions. The overall union density rate includes employees in both the private and the public or government sectors. However, the trends in these two sectors have been very different over the last 40 years. Although private and public sector union density rates were both around 25% of the labor force in the mid-1970s, in the decades that followed, public sector union density rose to nearly 40%, while private sector union density rates fell below 10% (see Figure 2). The higher union density rate in the government sector is partly explained by differences in labor law that make it easier for public sector employees to organize unions. A second commonly cited reason for the difference is the relative mobility of jobs in the private sector versus the immobility of public or go eminent jobs (i.e., private sector jobs are far more likely to move within the United States or overseas to avoid unionization than are public sector jobs).

In addition to varying over time and across the public and private sectors, union density rates also vary geographically and by industry. States with relatively high union density are located in the Northeast, the Midwest, and the West Coast. In 2008, New York had the highest union density of any state at 24.9%, followed by Hawaii (24.3%) and Alaska (23.5%). Low rates are the norm across the South and in the southwestern states. North Carolina (3.5%), South Carolina (3.7%), and Georgia (3.9%) had the lowest rate of union density in 2008 (Bureau of National Affairs [BNA], 2009). Among industries with high rates of union density in 2008 were utilities (electric power, natural gas, water supply, etc.) at 26.9%, transportation and warehousing (transportation of passengers and cargo, warehousing and storage of goods, etc.) at 21.3%, and telecommunications (telephone service, cable and satellite television, Internet access, etc.) at 19.3%. Industries with low union density included insurance at 1.0%, finance (banks, savings and loans, brokerages, etc.) at 1.3%, agriculture at 2.8%, food service (restaurants, fast food, caterers, etc.) at 3.1%, and retail trade (stores, catalog sales, etc.) at 5.2% (BNA, 2009a).

Figure 1 Percentage of Employees That Are Members of a Labor Union in the United States From 1930 to 2008

While union membership has historically been drawn from the ranks of blue-collar workers in the manufacturing, coal, utilities, transportation, and construction industries, the proportion of the contemporary labor movement’s membership made up of white-collar and professional employees has been increasing (although union density for these workers still remains relatively low). Actors, writers, athletes, nurses, teachers, sales representatives, school principals, musicians, and software engineers have joined unions in greater and greater numbers in recent years. The potential for growth in this area presents a great opportunity for American unions.

The degree to which they can take advantage of this opportunity may determine how relevant the American labor movement will be in the years ahead.

Labor unions are not by any means solely an American phenomenon. In fact, unions are a significantly more important part of the economies of most industrialized nations than in the United States. In 2006, the United States ranked 22nd of 24 nations, with only France (8.3%) and the Republic of Korea (11.2%) having labor movements that represented a lower percentage of the labor force. Countries with the highest union density rates were Sweden (78%), Finland (74%), and Denmark (70%). It is important to note that union density rates have been declining in most developed countries, although the decline appears to be slower for most other nations than for the United States (Chang & Sorrentino, 1991; Visser, 2006).

Union Structure and Government

To understand how unions function as organizations, it is necessary to understand how they are structured and governed. The structure and government of most unions is similar to the structure of American government in that it has three levels—local, state or regional, and national. The basic structural unit of a labor organization is the local union (in some unions the local might be referred to as a lodge or a branch). A local union often consists of the employees in a single workplace (a factory, an office, a warehouse, etc.), although sometimes a local can represent more than one workplace, and in very large workplaces, there can be more than one local union (e.g., one local might represent production and maintenance employees, while a second local represents the office workers). One of the most significant things about a local union is that it is the main point at which members interact with, or experience, the union. The local union is governed based on a local constitution or bylaws that establish how the local will operate. Typically, the local union constitution outlines how officers are elected, what their terms of office will be, what their duties are, as well as how decisions regarding the administration of the local, the bargaining of contracts, and the calling of strikes will be made. The exact structure of a local union will depend in part on its size and on the industry within which it operates. Because most local unions are affiliated with a national or an international union, the local union structure will also be influenced by the practices of the parent organization.

Figure 2   Union Density in the Public and Private Sectors

The second level of union structure is the regional or state level. This is an intermediate level of the union that serves as a link between the national and local levels. The regional or state level brings locals belonging to the same national or international union in a given geographic region together for their mutual benefit. This level also often provides professional union representatives to assist the local unions. These individuals usually have significant experience and expertise in organizing, contract negotiations, and grievance handling/arbitration and provide advice and assistance to the local unions.

The national or international union represents the third level of union structure. A national union brings together its local unions within the United States. An international union is similar to a national union except that it has local unions and members in Canada (and sometimes in U.S. territories such as Puerto Rico and Guam). National and international unions perform numerous functions. They bring locals together to use their collective power in negotiations with larger national and multinational employers. National and international unions also provide the formal structure and mechanisms for their members’ interests to be voiced and heard in national politics and in addressing other important issues. Additionally, national and international unions support regional/state and local union initiatives and needs by providing services (e.g., legal, research, education) to these levels of the union.

It is important to note that unions—at the local, regional or state, and national/international levels— are mandated by federal law to operate democratically. The Taft-Hartley Act of 1947 (a series of amendments to the NLRA) and the Labor-Management Reporting and Disclosure Act (LMRDA) of 1959, also known as the Landrum-Griffin Act, established basic or minimum requirements for how elections are to be held, who can hold an elected position, and what the terms of office will be. These laws also mandate that all levels of all unions must file detailed reports accounting for every cent that is collected and spent and listing the salaries and expenses of all employees.

There is a fourth level of union structure and government called the federation. Unlike the other three levels discussed previously, a labor federation is not a union, nor is it a part of a union. It is a body that brings together many different unions into a loose alliance. This alliance helps the individual unions pursue their common interests by sharing information and bringing the collective authority and resources of the individual unions together. In some ways, a labor federation is analogous to the U.S. Chamber of Commerce in the business community. In the same way that a labor federation is not a union, the Chamber is not a business. Rather, it is a federation of businesses.

There are currently two labor federations in the United States. The first, the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO), was founded in 1955. The second, Change to Win (CTW), was formed in 2005 by unions that disaffiliated from the AFL-CIO. The CTW unions split with the AFL-CIO over a number of policy differences, including CTW’s perception that the AFL-CIO was not placing sufficient emphasis on organizing new union members.

In 2009, the AFL-CIO consisted of 56 national and international unions with a total membership of 11 million, while CTW had 7 affiliates totaling 6 million members. While most U.S.-based national and international unions belong to one of these two federations, not all national or international unions are affiliated with a labor federation. In fact, the largest American union, the National Education Association (NEA), does not belong to either the AFL-CIO or CTW. However, other than the NEA, the unions that not affiliated have relatively small memberships and little influence nationally (Sloane & Whitney, 2010).

The Industrial Relations Process

The three steps.

To understand the role that unions play in labor markets, it is helpful to understand the process by which employees form unions and, once formed, how unions negotiate contracts and resolve day-to-day differences with employers.

The industrial relations, or union-management relations, process consists of three steps. For most private sector workers, these steps are spelled out in the NLRA. For railroad and airline workers, they are spelled out in the Railway Labor Act. For public sector employees who have been granted the rights to organize and bargain and in a few cases to strike, these steps are addressed in various federal and state laws. The processes differ from law to law but generally have much in common.

The first step in the process involves the organization of a union. Under the NLRA, this occurs in one of two ways. If a majority of employees in a workplace sign representation cards, the employees can request that their employer voluntarily recognize the union. If the employer refuses, the employees can then present these cards to the National Labor Relations Board (NLRB) and ask for a certification election (note, while it is necessary to have a majority of employees sign cards to ask for voluntary recognition, only 30% are required to request an election). Once the cards are verified, the NLRB will order that an election be held within 45 to 60 days.

In the time between the filing of cards and the election, the union and the employer will both conduct campaigns to convince the employees to vote for or against unionization. At the end of the campaign, a secret ballot election is typically held. Most employers do not opt to voluntarily recognize a labor union, despite having evidence from a third party that a majority of those workers want to form a union. For the union to be certified, a majority of employees voting in the election must vote for the union. Once a union is certified or voted in, the employer is obliged to engage in bargaining with that union.

The second step in the industrial relations process is collective bargaining. Collective bargaining involves the employer and representatives of the union meeting to negotiate over compensation, benefits, hours, and working conditions for unionized employees. In the bargaining process, the union usually presents proposals for improved wages and benefits, and the employer responds with counterproposals for less generous improvements (or during downturns, reductions in compensation and benefits).

In the small percentage of cases where the parties cannot reach an agreement on the terms of the new collective bargaining contract, one side or the other might engage in strategies to force the other side to change its position. For unions, this would normally take the form of a strike, a tactic in which the union’s members refuse to work in an effort to put economic pressure on the employer by disrupting its ability to operate. As a counterbalance to a strike, private sector employers, under certain conditions, can lockout, or voluntarily close, their businesses in an effort to deprive employees of their income.

It is important to note that a very, very small proportion of negotiations involve either a strike or a lockout. The vast majority of collective bargaining negotiations conclude with the two sides agreeing to a contract without any disruption of work. The end result of collective bargaining is a contract (also known as a labor agreement). Contracts are for fixed periods of time, normally 3 to 4 years, although they can be of shorter or longer duration.

Once the parties agree to a contract of a fixed duration, they enter the third step of the industrial relations process. This step is sometimes called the contract administration step. It involves the implementation of a mechanism called a grievance procedure for systematically resolving disputes that arise during the term of the contract. While both parties to the contract may intend to abide by the agreement, there may be incidences when the employer or the union may misinterpret or misunderstand the intent of a specific section in the contract. Disputes might also arise over union concerns that the employer is not following the contract (e.g., an employer does not follow the provisions relating to promotion in choosing a person for a vacated position).

Prior to the passage of the NLRA, unions would sometimes strike over such issues, but today they are settled peacefully through the grievance procedure. This is a quasi-judicial process in which disputes are worked out during a series of meetings involving employer and union representatives. If the issue is not resolved at the first-step meeting, the union can appeal to a second and third step. Each meeting involves different union and management representatives with increasing authority and expertise in addressing the dispute resolution. Most disputes are successfully resolved within the first three steps of the grievance process. However, if no resolution is reached between the parties, the case goes to arbitration, a quasi-judicial process that involves a hearing before an arbitrator (a sort of judge). The arbitrator is usually empowered by both parties to issue a final and binding decision.

A relatively high percentage of cases taken to arbitration involve disciplinary charges against employees (demotions, discharges, etc.). The grievance procedure provides disciplined workers with due process, including an opportunity to present their sides of the story and have their day in court. From the union members’ point of view, this is one of the most important benefits a union provides its members—a voice in resolving disputes between an employee and a manager.

 Distinctive Features of the U.S. Industrial Relations System

Just as American unions are somewhat different from their counterparts in other parts of the world, so is the system of industrial relations in the United States. The system is distinctive in four major ways.

Decentralization

The focal point for collective bargaining in the United States is the individual workplace or bargaining unit (a factory, an office, etc.). This is the unit in which employees organize to form a union. While these bargaining units can be combined into multi-unit structures for the purpose of negotiating a uniform contract across multiple workplaces operated by one employer (as in large corporations like General Motors, U.S. Steel, etc.), the vast majority of collective bargaining in the United States involves a single local union and a single employer negotiating a labor agreement for a single workplace.

While industry-wide collective bargaining is rare in the United States, national labor agreements covering entire industries are much more common in the United Kingdom, western Europe, and Australia. In some U.S. industries, large employers do negotiate company-wide contracts that can cover hundreds of workplaces (this is the case in the auto industry and its three majors employers, General Motors, Ford, and Chrysler), but again, this is the exception and not the rule.

Exclusive Representation

A second practice that differentiates the U.S. collective bargaining system from others in the world is exclusive representation. The NLRA provides that only one union can represent the employees in a bargaining unit. If workers in a unit decide to organize and are successful in convincing a majority of those employees who vote in the election to support the union, that union becomes the exclusive representative for those employees. No other union can represent any of the workers in that unit. In addition, the union that wins the election acquires the responsibility to represent all employees in that unit, not just the employees who voted for the union.

In many other countries, unions represent only that part of a bargaining unit that chooses to be represented by a particular union. This proportional representation can result in multiple unions representing different percentages of the employees in a given unit (i.e., Union A might represent 40% of the unit; Union B, 30%; Union C, 20%; etc.). Employers are forced to deal simultaneously with multiple unions in that unit, a situation that can be chaotic, confusing, and disruptive.

The Role of Labor Contracts

In the U.S. system, the heart of any union-management relationship is the contract. These contracts are the end product of bargaining and spell out, with precise language and great detail, what the compensation, benefits, hours, working conditions, local practices, disciplinary processes, and grievance procedures will be. These contracts are often long and complex (the General Motors-United Auto Workers’ contract is an almost 1-inch-thick booklet of very small print). This contrasts with the United Kingdom’s and western Europe’s approach in which negotiations focus on only a handful of issues (wages, some benefits, etc.). The resulting contract is much more limited in scope. Issues not addressed are resolved as they arise, in a more informal process by the parties.

The Role of Government

A fourth difference between the U.S. system of collective bargaining and the system in most countries is the larger role that the U.S. government plays in determining, regulating, and enforcing the bargaining process. Legislation like the NLRA, the Railway Labor Act, and federal and state public sector labor laws detail how a union is formed, who can be included in that union, the obligations the parties have to bargain with each other, when bargaining occurs, and more.

U.S. labor laws also specify in great detail what the parties must bargain over (mandatory issues); what they cannot bargain over (prohibited issues); and what they may, but are not required to, bargain over (voluntary issues). Again, in the United Kingdom and western Europe, the government does not get involved to as great a degree in either the process or the substance of negotiations. These issues are largely left to the parties.

The Impact of Unions on Labor Markets

As suggested earlier, economists have traditionally viewed unions as monopolies that interfere with the efficient operation of labor markets. They do so in three main ways.

First, unions raise wages above the competitive levels set by the market. In doing so, they cause employers to hire fewer workers than they would otherwise. The evidence does, in fact, indicate that unions increase wages. In 2008, the BLS (2009c) reported that the median weekly earnings of union members employed full time was $886, while full-time nonunion workers earned $691, a difference of 28% (see Figure 3).

A comparison of earnings by occupation indicates that this earnings premium is present in most occupations (see Table 1).

The impact of unions on wages is even greater than indicated by the union-nonunion wage differential. This is because nonunion employers often raise the wages of their employees above what they would otherwise pay to reduce the likelihood that their employees will organize a union. The phenomenon of unions indirectly causing an increase in the wages of nonunion employees is called the union threat effect (Filer, Hamermesh, & Rees, 1996).

Figure 3 Comparison of Union and Nonunion Median Weekly Earnings 2008 SOURCE: BLS (2009c).

Economic theory suggests that artificially raising wages results in a reduction in the number of jobs because employers buy less labor as the price increases. And as those employees who have lost their jobs search for work in the nonunion sector, they bid down wages there. In essence then, some of the wage increases won by unions come at the expense of lower-paid or unemployed workers. For this reason, many economists argue that the interference of unions in the operation of the market causes inefficiencies. This leads to the conclusion that, on balance, unions play a harmful role in the market.

Many economists believe that unions contribute to inefficiency in a second way by engaging in strikes. When unions call strikes in an effort to increase their bargaining power, productivity falls. At the firm level, this ultimately lowers profitability; at the national level, it reduces gross national product (GNP) (Freeman & Medoff, 1984).

Third, economists believe that unions reduce efficiency through the imposition of work rules and work restrictions with which nonunion employers are not saddled. One often-cited example is work jurisdiction rules in which employees have strictly observed job descriptions that prevent them from doing even the simplest of tasks that are not a part of their jobs. Where work jurisdiction rules exist, some economists argue that these provisions have a negative impact on individual and firm-level productivity (Filer et al., 1996).

However, other economists question this view of unions. They believe that “markets are competitive enough to give unions little or no power to extract monopoly wages” (Freeman & Medoff, 1984, p. 7). They reason that unions really acquire monopoly power only when they organize an entire market or are present in a noncompetitive market (Filer et al., 1996). They also point out that strikes involving 1,000 workers or more have fallen steadily in this country from a modern high of 470 in 1952 to 44 in 1990 to 15 in 2008 and that the percentage of estimated working time lost for those same years fell from 0.14 to 0.02 to 0.01 (BNA, 2009). They also note that strikes occur in other industrialized countries and usually at higher rates that more than offset the cost of strikes in the United States. Last, they argue that restrictive work rules may have been a problem in the past but that many unions have worked closely with employers to eliminate these practices and to find ways to more efficiently produce goods or provide services.

Over the last 25 years, another perspective on unions, based on the writings of Hirschman (2007), but most effectively articulated by Freeman and Medoff (1984), has gotten significant attention and has influenced economists’ views of unions in important ways. This collective voice/institutional response perspective suggests an alternative to the classic market mechanism of exit and entry. Economic theory posits that exit occurs in a perfectly competitive market in which “no individual can be made better off without making someone worse off ” (Freeman & Medoff, p. 8). The freedom that dissatisfied employees have to leave bad employers and go to work for good ones contributes to the efficiency of the market. If this system works as assumed, unions can interfere only with the free operation of the market and create inefficiencies (Bennett & Kaufman, 2007).

Freeman and Medoff (1984) contend that employees can deal with workplace problems in two ways. They can exit (quit—the only option available to workers according to classical economic theory) or they can engage in voice by speaking up and trying to change the conditions with which they are dissatisfied. Regarding the exit option for dissatisfied workers, Freeman and Medoff argue that these self-regulating mechanisms of markets are not perfect because actors do not have complete information and there are significant mobility costs for employees who choose to exit. And should employees consistently exit the firm when dissatisfied, the result is high turnover in the workforce, which is costly to employers. Voice can, in fact, reduce costs to both employers and employees by drawing attention to bad employment practices and resolving them. Freeman and Medoff point out that voice expressed by an individual is much less likely to be effective in resolving problems, particularly in a large workforce, than is voice expressed by a group. And because the most effective way to express collective voice is through a union, they conclude that unions can have a positive impact on efficiency in a workplace.

Table 1   Earnings by Occupation, 2008 Full-Time Wage and Salary Workers’ Median Weekly Earnings in Dollars

The view that unions interfere with the efficient operation of the market continues to be the prevailing opinion in the field of economics. But the case made by Freeman and Medoff (1984) that, in addition to their negative monopoly face, unions also have a positive voice face has forced the economics profession to reconsider the conventional wisdom about unions.

By any account, labor unions have played a significant role in American society for most of the nation’s history. And while their influence has declined over the last 25 years, the modern American labor movement represents millions of employees in thousands of large and small workplaces across the country.

Most economists have viewed unions through the lens of neoclassical economic theory, concluding that they act as monopolies that create inefficiencies in the labor market, resulting in the loss of jobs and greater income inequality in the workforce. In their view, unions have also had a negative impact on efficiency through the conduct of strikes and by the institution of cumbersome work rules and work restrictions.

This assessment of unions has been challenged in recent years by a minority of economists who downplay the monopoly face of unions. These scholars argue that strikes no longer cause significant disruption to the economy and that unions have greatly loosened restrictions on work rules. And they argue that unions have a second voice face that plays a positive role in the workplace by allowing employees to address problems that would otherwise cause them to exit or quit. This side of unions benefits both employees and employers by reducing turnover, improving productivity, and bringing fair treatment and due process, two of the core values of American democracy, to the workplace.

It remains to be seen whether this minority view of unions can make inroads into the traditional view that has prevailed in the field of economics for a very long time.

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Report | Unions and Labor Standards

How unions help all workers

Report • By Matthew Walters and Lawrence Mishel • August 26, 2003

Briefing Paper #143

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Unions have a substantial impact on the compensation and work lives of both unionized and non-unionized workers. This report presents current data on unions’ effect on wages, fringe benefits, total compensation, pay inequality, and workplace protections.

Some of the conclusions are:

• Unions raise wages of unionized workers by roughly 20% and raise compensation, including both wages and benefits, by about 28%.
• Unions reduce wage inequality because they raise wages more for low- and middle-wage workers than for higher-wage workers, more for blue-collar than for white-collar workers, and more for workers who do not have a college degree.
• Strong unions set a pay standard that nonunion employers follow. For example, a high school graduate whose workplace is not unionized but whose industry is 25% unionized is paid 5% more than similar workers in less unionized industries.
• The impact of unions on total nonunion wages is almost as large as the impact on total union wages.
• The most sweeping advantage for unionized workers is in fringe benefits. Unionized workers are more likely than their nonunionized counterparts to receive paid leave, are approximately 18% to 28% more likely to have employer-provided health insurance, and are 23% to 54% more likely to be in employer-provided pension plans.
• Unionized workers receive more generous health benefits than nonunionized workers. They also pay 18% lower health care deductibles and a smaller share of the costs for family coverage. In retirement, unionized workers are 24% more likely to be covered by health insurance paid for by their employer.
• Unionized workers receive better pension plans. Not only are they more likely to have a guaranteed benefit in retirement, their employers contribute 28% more toward pensions.
• Unionized workers receive 26% more vacation time and 14% more total paid leave (vacations and holidays).

Unions play a pivotal role both in securing legislated labor protections and rights such as safety and health, overtime, and family/medical leave and in enforcing those rights on the job. Because unionized workers are more informed, they are more likely to benefit from social insurance programs such as unemployment insurance and workers compensation. Unions are thus an intermediary institution that provides a necessary complement to legislated benefits and protections.

The union wage premium

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 (for example, the work of Alfred Marshall). This section presents evidence from the 1990s that unions raise the wages of unionized workers by roughly 20% and raise total compensation by about 28%.

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.

Table 1 provides several estimates of the union hourly wage premium based on household and employer data from the mid- to late 1990s. All of these estimates are based on statistical analyses that control for worker and employer characteristics such as occupation, education, race, industry, and size of firm. Therefore, these estimates show how much collective bargaining raises the wages of unionized workers compared to comparable nonunionized workers.

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. The CPS reports the wages and demographic characteristics (age, gender, education, race, marital status) of workers, including whether workers are union members or covered by a collective bargaining contract, and employment information (e.g., industry, occupation). Using these data, Hirsch and Macpherson (2003) found a union wage premium of 17.8% in 1997. Using data from a different, but also commonly used, household survey—the Census Bureau’s Survey of Income and Program Participation (SIPP)—Gundersen (2003) found a union premium of 24.5%. So, estimates from household surveys that allow for detailed controls of worker characteristics find a union wage premium ranging from 15% to 25% in the 1990s.

Another important source of workplace information, employer surveys, has advantages and disadvantages. On the plus side, wages, occupation, and employer characteristics—including the identification of union status—are considered more accurate in employer-based data. The disadvantage is that data from employers do not include detailed information about the characteristics of the workers (e.g. education, gender, race/ethnicity). However, the detailed occupational information and the skill ratings of jobs (education requirements, complexity, supervisory responsibilities) used in these studies are most likely adequate controls for “human capital,” or worker characteristics, making the surveys reliable for estimating the union wage premium.

Pierce (1999a) used the new Bureau of Labor Statistics survey of employers, the National Compensation Survey, to study wage determination and found a union wage premium of 17.4% in 1997. Pierce’s study was based on observations of 145,054 nonagricultural jobs from 17,246 different establishments, excluding the federal government.

In another study, Pierce (1999b) used a different employer survey—the Employment Cost Index (ECI), a precursor to the National Compensation Survey—and found a union wage premium of 20.3%. This estimate is for all nonagricultural employers except the federal government, the same sector employed in Pierce’s NCS study (though for an earlier year—1994).

These two estimates of the union wage premium from employer surveys provide a range of 17% to 20%, consistent with the range identified by the household surveys. Thus, a variety of sources show a union wage premium of between 15% and 20%.

Since unions have a greater impact on benefits than wages (see Freeman 1981), estimates of the union premium for wages alone are less than estimates of the union premium for all compensation (wages and benefits combined). That is, estimates of just the wage premium understate the full impact of unions on workers’ pay. A 1999 study by Pierce estimates the union premium for wages at 20.3% and compensation at 27.5% in the private sector (see Table 1). Thus, the union impact on total compensation is about 35% greater than the impact on wages alone. (A later section reviews the union impact on specific fringe benefits such as paid leave, health insurance, and pensions.)

Many “measurement issues” have been raised about estimates of the union wage premium. Some researchers have argued that union wage premiums are significantly underestimated by some measurements. Hirsch (2003), in particular, raises an important question regardi ng the rising use of “imputations” in the CPS. Information is “allocated,” or “imputed,” to a respondent in the CPS when they either refuse to report their earnings or a proxy respondent is unable to report earnings. Hirsch reports that earnings were imputed for fewer than 15% of the CPS in the 1980s but 31% in 2001. The method of imputing earnings to workers for whom earnings aren’t reported does not take account of their union status, thus reducing the estimates of the union wage premium. The increase in imputations has, Hirsch says, created an increasing underestimate of the union wage premium. Table 1 shows Hirsch’s estimates for the union premium in the private sector using traditional methods (18.4%) and using a correction for imputation bias (23.2%). Hirsch’s results imply that imputations depress estimates of the union wage premium for 1997 by 20%, and that the union wage premium is actually one-fourth higher than conventional estimates show.

Union wage premiums and inequality

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:

The standard explanation for this result is that unions standardize wages by decreasing differentials across and within job positions (Freeman 1980) so that low-skilled workers receive a larger premium relative to their alternative nonunion wage.

The larger union wage premium for those with low wages, in lower-paid occupations and with less education is shown in Table 2 . For instance, the union wage premium for blue-collar workers in 1997, 23.3%, was far larger than the 2.2% union wage premium for white-collar workers. Likewise, the 1997 union wage premium for high school graduates, 20.8%, was much higher than the 5.1% premium for college graduates. Gundersen (2003) estimated the union wage premium for those with a high school degree or less at 35.5%, significantly greater than the 24.5% premium for all workers.

Card’s (1991) research provides a comprehensive picture of the impact of unions on employees by estimating the union wage premiums by “wage fifth,” where the sample is split into five equal groups of workers from the lowest wage up to the highest wage workers. As Table 2 shows, the union wage premium was far greater among low-wage workers (27.9%) than among middle-wage (18.0%) or the highest-wage workers (10.5%).

Unions reduce wage inequalities because they raise wages more at the bottom and in the middle of the wage scale than at the top. Lower-wage, middle-wage, blue-collar, and high school educated workers are also more likely than high-wage, white-collar, and college-educated workers to be represented by unions (see Table 2). These two factors—the greater union representation and the larger union wage impact for low- and mid-wage workers—are key to unionization’s role as a major factor in reducing wage inequalities (see Freeman 1980, 1982; and Freeman and Medoff 1984).

That unionization lessens wage inequality is also evident in the numerous studies that attribute a sizable share of the growth of wage inequality since 1979 to the erosion of union coverage (Freeman 1991; Card 1991; Dinardo et al. 1996; Blackburn et al. 1991; Card et al. 2003; Blanchflower and Bryson 2002). Several studies have shown that deunionization is responsible for at least 20% of the large increase in wage inequality (Mishel et al. 2003). This is especially the case among men, where steep declines in unionization among blue-collar and non-college-educated men has led to a rise in education and occupational wage gaps. Farber’s (2002) estimate shows that deunionization can explain as much as 50% of the growth in the wage gap between workers with a college education and those with a high school education.

Unions and fringe benefits

In and earlier era, non-wage compensation was referred to as “fringe benefits.” However, items such as adequate health insurance, a secure retirement pension, and sufficient and flexible paid leave to manage work and family life are no longer considered “fringe” components of pay packages. Thus, the union impact on benefits is even more critical to the lives of workers now than in the past. This section presents evidence that unionized workers are given employer-provided health and pension benefits far more frequently than comparable nonunion workers. Moreover, unionized workers are provided better paid leave and better health and pension plans.

The previous section reviewed data that showed that unions have had a greater impact in raising benefits than in raising wages. This section examines the union effect on particular benefits, primarily paid leave, health insurance, and pensions. Unions improve benefits for nonunionized workers because workers are more likely to be provided particular benefits and because the specific benefits received are better.

Table 3 provides information from the employer survey (the ECI) about the impact of unions on the likelihood that a worker will receive benefits. The table shows that unionized workers are 3.2% more likely to have paid leave, a relatively small impact, explained by the fact that nearly all workers (86%) already receive this benefit. Unions have a much greater impact on the incidence of pensions and health insurance benefits, with union workers 22.5% and 18.3% more likely to receive, respectively, employer-provided pension and health benefits.

Table 3 also shows the union impact on the financial value of benefits, including a breakdown of how much the greater value is due to greater incidence (i.e., unionized firms are more likely to offer the benefit) or to a more generous benefit that is provided.

Union workers’ paid leave benefits are 11.4% higher in dollar terms, largely because of the higher value of the benefits provided (8.0% of the total 11.4% impact). Unions have a far larger impact on pensions and health insurance, raising the value of these benefits by 56% and 77.4%, respectively. For pensions, the higher value reflects both that unionized workers are more likely to receive this benefit in the first place and that the pension plan they receive is generally a “richer” one. For health benefits, the value added by unions mostly comes from the fact that union workers receive a far more generous health plan than nonunionized workers. This factor accounts for 52.7% of the total 77.4% greater value that organized workers receive.

Table 4 provides further information on the union premium for health insurance, pensions, and paid leave benefits, drawn from a different data source (a series of supplements to the CPS) than for Table 3.1 The first two columns compare the compensation characteristics in union and nonunion settings. The difference between the union and nonunion compensation packages are presented in two ways: unadjusted (the difference between the first two columns) and adjusted (differences in characteristics other than union status such as industry, occupation, and established size). The last column presents the union premium, the percentage difference between union and nonunion compensation, calculated using the adjusted difference.

These data confirm that a union premium exists in every element of the compensation package. While 83.5% of unionized workers have employer-provided health insurance, only 62% of nonunionized workers have such a benefit. Unionized workers are 28.2% more likely than comparable nonunion workers to be covered by employer-provided health insurance. Employers with unionized workforces also provide better health insurance—they pay an 11.1% larger share of single worker coverage and a 15.6% greater share of family coverage. Moreover, deductibles are $54, or 18%, less for unionized workers. Finally, unionized workers are 24.4% more likely to receive health insurance coverage in their retirement.

Similarly, 71.9% of unionized workers have pensions provided by their employers, while only 43.8% of nonunion workers do. Thus, unionized workers are 53.9% more likely to have pension coverage. Union employers spend 36.1% more on defined benefit plans but 17.7% less on defined contribution plans. As defined benefit plans are preferable—they provide a guaranteed benefit in retirement—these data indicate that union workers are more likely to have better pension plans.

Union workers also get more paid time off. This includes having 26.6% more vacation (or 0.63 weeks—three days) than nonunion workers. Another estimate, which includes vacations and holidays, indicates that union workers enjoy 14.3% more paid time off.

Union wages, nonunion wages, and total wages

There are several ways that unionization’s impact on wages goes beyond the workers covered by collective bargaining to affect nonunion wages and labor practices. For example, in industries and occupations where a strong core of workplaces are unionized, nonunion employers will frequently meet union standards or, at least, improve their compensation and labor practices beyond what they would have provided if there were no union presence. This dynamic is sometimes called the “union threat effect,” the degree to which nonunion workers get paid more because their employers are trying to forestall unionization.

There is a more general mechanism (without any specific “threat”) in which unions have affected nonunion pay and practices: unions have set norms and established practices that become more generalized throughout the economy, thereby improving pay and working conditions for the entire workforce. This has been especially true for the 75% of workers who are not college educated. Many “fringe” benefits, such as pensions and health insurance, were first provided in the union sector and then became more generalized—though, as we have seen, not universal. Union grievance procedures, which provide “due process” in the workplace, have been mimicked in many nonunion workplaces. Union wage-setting, which has gained exposure through media coverage, has frequently established standards of what workers generally, including many nonunion workers, expect from their employers. Until, the mid-1980s, in fact, many sectors of the economy followed the “pattern” set in collective bargaining agreements. As unions weakened, especially in the manufacturing sector, their ability to set broader patterns has diminished. However, unions remain a source of innovation in work practices (e.g., training, worker participation) and in benefits (e.g., child care, work-time flexibility, sick leave).

The impact of unions on wage dynamics and the overall wage structure is not easily measurable. The only dimension that has been subject to quantification is the “threat effect,” though measuring this phenomenon is a difficult task for several reasons. First, the union presence will likely be felt most in the markets where unions are seeking to organize—the nonunion employers affected are those in competition with unionized employers. These markets vary in nature. Some of these markets are national, such as many manufacturing industries, while others are local—janitors and hotel and supermarket workers. Some markets are defined by the product—what employers sell, such as autos, tires and so on—while other markets are occupational, such as music, carpentry, and acting. Therefore, studies that compare industries cannot accurately capture the economic landscape on which unions operate and do not adequately measure the “threat effect.”

A second difficulty in examining the impact of the “threat effect” on nonunion wages is identifying a measure, or proxy, for the union presence. In practice, economists have used union density, the percentage of an industry that is unionized, as their proxy. The assumption here is that employers in highly organized settings face a higher threat of union organization than a nonunion employer in a mostly unorganized industry. In broad strokes, this is a reasonable assumption. However, taken too literally and simply, union density can be misleading. First, it is not reasonable to consider that small changes in union density—say, from 37% to 35%, or vice-versa—will produce observable changes in nonunion wages. Any measurement of the “threat effect” that relies on small changes in union density will almost surely—and erroneously—yield little or no effect. Second, the relationship between union density and nonunion wages is not linear. Union density is not likely to produce any threat effect until some threshold level of unionization is reached, as much as 30% to 40%. That is, unionization of 20% in a particular industry may have no impact but 40% unionization may be sufficient to make employers aware of union organizing and union pay and practices. Empirically, this means a 20 percentage point change in unionization density from zero to 20 may have no effect, but a change from 20 to 40 will have an effect. Likewise, a union presence of 60% to 70% may provide as strong a threat, or ability to set standards, as unionization of 80% or more. Therefore, the relationship between union density and nonunion wages depends on the level of density: significant effects after a threshold level of density (e.g., 30% to 40%), a greater effect when density is higher, but no continued increase of impact at the highest densities.

The sensitivity of the results to the specification—a linear or nonlinear specification of union density—is seen in studies of the union threat effect. A linear specification assumes that small changes at any level have the same impact, while a nonlinear specification allows the union effect to differ at different levels of unionization—perhaps less at low levels and more at medium or high levels. In an important early study of the “threat effect,” Freeman and Medoff (1981) examined the relationship between union density and nonunion wages and compensation in manufacturing. They found that union density had no association with higher nonunion pay (the relationship was positive but not statistically significant). Mishel (1982) replicated those results (p. 138) but also employed a nonlinear, qualitative specification (Table 4) that found large threat effects: nonunion establishments in industries with union density from 40% to 60% and from 60% to 80% paid 6.5% and 7.3% more, respectively, than nonunion establishments with low union density (0% to 40%).

Farber (2002, 2003) has conducted the most recent analysis of union threat effects, the relationship between union density and nonunion wages across industries, in the private sector. Farber’s analysis, which uses a linear specification of union density (i.e., assumes small changes at any level have an impact), combines sectors where threat effects, if any, are geographic (hotel, construction, and janitorial work) and national (manufacturing). In one analysis, Farber finds a positive threat effect for the 1970s, 1980s, and mid-1990s. For example, the average nonunion worker in an industry with 25% union density had wages 7.5% higher because of unionization’s presence. Farber’s results show a lower, but still significant, threat effect in later years, though the effect on the average nonunion wage has diminished because of the erosion of union density. Farber also shows, not surprisingly, that the threat effect is greater for workers with no more than high school degree but minimal for those with a college degree.

Farber pursues much more stringent tests of the threat effect in models that use “industry fixed effects” in order to ensure that the effect of other industry characteristics are not wrongly being attributed to union density. Farber’s results in this further analysis show a threat effect among all workers in the 1970s and 1980s but not in the 1990s. Nevertheless, threat effects still prevailed across decades for those without high school degrees and for those with high school degrees, and in the 1980s for those with some college education. For example, nonunionized high school graduates (the largest category of workers in the United States) earned 2.0% to 5.5% higher wages in industries with 25% unionization than they did in completely nonunionized industries.

The union effect on total nonunion wages is nearly comparable to the effect of unions on total union wages. Table 5 illustrates the union impact on union, nonunion, and average wages among workers with a high school education. Farber’s stringent model from 1983 estimates that, for high school workers in a 25% unionized industry, the “threat effect” raises the average nonunion wage by 5.0%, thereby lifting the average wage by 3.8%. Assuming that unions have raised the wages of union workers by 20%, this raises the average high school wage by 5% (25% of 20%). The total effect of unions on the average high school wage in this example is an 8.8% wage increase, 3.8 percentage points of which are due to the higher wages earned by nonunion workers and 5.0 percentage points of which are due to the union wage premium enjoyed by nonunionized workers.

Two conclusions can be reached based on these studies. First, unions have a positive impact on the wages of nonunion workers in industries and markets where unions have a strong presence. Second, because the nonunion sector is large, the union effect on the overall aggregate wage comes almost as much from the impact of unions on nonunion workers as on union workers.

Unions and workplace protections

An extensive array of labor laws and regulations protects workers in the labor market and the workplace. From the National Labor Relations Act and Social Security Act of 1935 to the Occupational Safety and Health Act of 1970 and the Family Medical Leave Act of 1993, labor unions have been instrumental in securing labor legislation and standards. However, beyond their role in initiating and advocating enactment of these laws and regulations, unions have also played an important role in enforcing workplace regulations. Unions have provided labor protections for their members in three important ways: 1) they have been a voice for workers in identifying where laws and regulations are needed, and have been influential in getting these laws enacted; 2) they have provided information to members about workers’ rights and available programs; and 3) they have encouraged their members to exercise workplace rights and participate in programs by reducing fear of employer retribution, helping members navigate the necessary procedures, and facilitating the handling of workers’ rights disputes (Weil 2003; Freeman and Medoff 1984; Freeman and Rogers 1999).

Unions have played a prominent role in the enactment of a broad range of labor laws and regulations covering areas as diverse as overtime pay, minimum wage, the treatment of immigrant workers, health and retirement coverage, civil rights, unemployment insurance and workers’ compensation, and leave for care of newborns and sick family members. Common to all of these rules is a desire to provide protections for workers either by regulating the behavior of employers or by giving workers access to certain benefits in times of need (Weil 2003; Davis 1986; Amberg 1998). Over the years, these rules have become mainstays of the American workplace experience, constituting expressions of cherished public values (Gottesman 1991; Freeman and Medoff 1984).

Less well recognized perhaps, is the important role that unions play in ensuring that labor protections are not just “paper promises” at the workplace. Government agencies charged with the enforcement of regulations cannot monitor every workplace nor automate the issuance of insurance claims resulting from unemployment or injury. In practice, the effectiveness of the implementation of labor protections depends on the worker’s decision to act. This is done either by reporting an abuse or filing a claim. Unions have been crucial in this aspect by giving workers the relevant information about their rights and the necessary procedures, but also by facilitating action by limiting employer reprisals, correcting disinformation, aggregating multiple claims, providing resources to make a claim, and negotiating solutions to disputes on behalf of workers (Freeman and Rogers 1999; Weil 2003; Hirsch, et al. 1997).

Evidence of the vital role of unions in implementing labor protections can be found in the research on various programs and benefits. Union membership significantly increases the likelihood that a worker will file a claim or report an abuse. Examples of this research can be found in such areas as unemployment insurance, worker’s compensation, the Occupational Safety and Health Act, the Family Medical Leave Act, pensions, and the Fair Labor Standards Act’s overtime provision.

Unemployment insurance

Unemployment insurance (UI) is a joint federal and state program that was created in the Social Security Act of 1935 to provide some income replacement to workers who lose their job through no fault of their own. Budd and McCall (1997) offer a cost-benefit decision-making analysis to explain the costs facing the unemployed worker in filing a UI claim. In a system with complex eligibility rules and benefit calculations and a lack of uniformity among states regarding these rules, the difficulty, or “cost,” of obtaining information is formidable. In fact, the main reason that many unemployed workers never file a claim is because they thought they were not eligible (Wandner and Stettner 2000). The threat of an employer retaliating by not rehiring a laid-off worker might be another cost weighing on the decision to file a claim. Unions can help offset the costs of workers who are laid off.

Primarily, unions provide information to workers about benefit expectations, rules, and procedures, and dispel stigmas that might be attached to receiving a social benefit. Unions also can negotiate in their contracts layoff recall procedures based on seniority and protection against firing for other than a just cause, as well as help workers build files in the case of a disputed claim (Budd and McHall 1997). Additionally, the union-wage differential reduces the likelihood that unemployed workers will be ineligible for benefits because their pay is too low (Wenger 1999).

Budd and McHall (1997) have estimated that union representation increases the likelihood of an unemployed worker in a blue-collar occupation receiving UI benefits by approximately 23%. At the peak of UI coverage in 1975, one in every two unemployed workers received UI benefits. By the mid-1980s, the ratio of claims to unemployed workers (the recipiency rate) had fallen to almost 30%. Blank and Card (1991) found that the decline in unionization explained one-third of the decline in UI recipiency over this period. These findings underscore the difference unions make in ensuring that the unemployment insurance system works. Considering that UI acts as a stabilizer for the economy during times of recession, the role of unions in this program is pivotal (Wandner and Stettner 2000).

Worker’s compensation

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.

As with unemployment insurance, unions provide information to workers through their representatives, and they often negotiate procedures to handle indemnity claims. Through grievance procedures and negotiated contracts, unions protect workers from employer retaliation and, furthermore, act to dispel the notion among workers that employer retaliation is commonplace (Hirsch et al. 1997).

Hirsch et al. (1997) found that, after controlling for a number of demographic and occupational factors, union members are 60% more likely to file an indemnity claim than nonunion workers. Employers and the private insurance companies that sell worker’s compensation insurance policies have mutual interests in denying claims to limit costs (Biddle 2001). According to Biddle, higher denial rates lead to lower claim rates. The robust finding of Hirsch et al. demonstrates that unions provide a needed counterbalance to this interest.

Occupational Safety and Health Act (OSHA)

The Occupation Safety and Health Act of 1970 (OSHA) provided the foundation for the Occupation Safety and Health Administration, which enforces safety and health standards at places of work. The administration’s purpose is to limit work-related injury, illness, and death due to known unsafe working conditions. They currently have only 2,100 inspectors to monitor over seven million establishments. Enforcement of OSHA regulations presents an obvious challenge; OSHA implementation requires worker action to initiate complaints.

In two studies of OSHA and unions in the manufacturing and construction industries (1991a and 1991b), Weil found unions greatly improve OSHA enforcement. In the manufacturing industry, for example, the probability that OSHA inspections would be initiated by worker complaints was as much as 45% higher in unionized workplaces than in nonunion ones. Unionized establishments were also as much as 15% more likely to be the focus of programmed or targeted inspections in the manufacturing industry. In addition, Weil found that in unionized settings workers were much more likely to exercise their “walkaround” rights (accompanying an OSHA inspector to point out potential violations), inspections lasted longer, and penalties for noncompliance were greater. In the construction industry, Weil estimated that unions raise the probability of OSHA inspections by 10%.

In addition to the findings above, Weil notes that the union differential could be even larger if OSHA’s resources were not so limited. He claims, “Implementation of OSHA seems highly dependent upon the presence of a union at the workplace” (Weil 1991a). Following the trend of declining unionization, OSHA claims have dropped from their peak in 1985 of over 71,500 and are currently at close to 37,500 (Siskind 2002; OSHA 2003).

Family Medical Leave Act (FMLA)

Passed in 1993, the FMLA grants workers 12 weeks of unpaid leave in a 12-month period to care for newborn or newly adopted children, or in case of a personal or family member’s health condition. The leave taker is guaranteed the same or equivalent position upon return. One of the most striking characteristics of the act is that less than an estimated 60% of employees covered by the FMLA are not even aware that it exists. There is also widespread misunderstanding on the part of the employer about whom the act covers and when it applies. There is evidence that this leads employers to reject legally entitled leaves (Budd and Brey 2000).

According to Budd and Brey (2000), union members were about 10% more likely to have heard of the FMLA and understand whether or not they were eligible. Union members were found to have significantly less anxiety about losing their job or suffering other employer-imposed penalties for taking leave. And although the authors did not find union membership significantly increases the likelihood that a worker would take leave, they did find that union members were far more likely to receive full pay for leave taken.

The biggest obstacle to workers exercising their rights under the FMLA—besides the fact that the leave is unpaid rather than paid—is information, since only a very slim majority has even heard of the act. With the exception of a $100 fine for failing to post a notice, employers have little incentive to inform employees of their rights. Unions are one of the few institutions to create awareness about FMLA’s existence and regulations.

Fair Labor Standards Act (FLSA)

This act, passed in 1938, had two main features: first, it established a federal minimum wage. Second, it established the 40-hour work week for hourly wage earners, with an overtime provision of time and a half the hourly wage for work done beyond 40 hours. Trejo (1991) examined the union effect on compliance of the latter part of the FLSA, finding that employer compliance with the overtime pay regulation rose sharply with the presence of a union. He hypothesizes that this result reflects the policing function of unions because unions often report violations to enforcement agencies.

Summary: union impact on workplace protections

The research evidence clearly shows that the labor protections enjoyed by the entire U.S. workforce can be attributed in large part to unions. The workplace laws and regulations, which unions helped to pass, constitute the majority of the labor and industrial relations policies of the United States. However, these laws in and of themselves are insufficient to change employer behavior and/or to regulate labor practices and policies. Research has shown convincingly that unions have played a significant role in enforcing these laws and ensuring that workers are protected and have access to benefits to which they are legally entitled. Unions make a substantial and measurable difference in the implementation of labor laws.

Legislated labor protections are sometimes considered alternatives to collective bargaining in the workplace, but the fact of the matter is that a top-down strategy of legislating protections may not be influential unless there is also an effective voice and intermediary for workers at the workplace—unions. In all of the research surveyed, no institutional factor appears as capable as unions of acting in workers’ interests (Weil 2003). Labor legislation and unionization are best thought of as complements, not substitutes.

This paper has presented evidence on some of the advantages that unionized workers enjoy as the result of union organization and collective bargaining: higher wages; more and better benefits; more effective utilization of social insurance programs; and more effective enforcement of legislated labor protections such as safety, health, and overtime regulations. Unions also set pay standards and practices that raise the wages of nonunionized workers in occupations and industries where there is a strong union presence. Collective bargaining fuels innovations in wages, benefits, and work practices that affect both unionized and nonunionized workers.

However, this review does not paint a full picture of the role of unions in workers lives, as unions enable due process in the workplace and facilitate a strong worker voice in the broader community and in politics. Many observers have stated, correctly, that a strong labor movement is essential to a thriving democracy.

Nor does this review address how unionism and collective bargaining affect individual firms and the economy more generally. Analyses of the union effect on firms and the economy have generally found unions to be a positive force, improving the performance of firms and contributing to economic growth (Freeman and Medoff 1984; Mishel and Voos 1992; Belman 1992; Belman and Block 2002; Stiglitz 2000; Freeman and Kleiner 1999; Hristus and Laroche 2003; with a dissenting view in Hirsch 1997). There is nothing in the extensive economic analysis of unions to suggest that there are economic costs that offset the positive union impact on the wages, benefits, and labor protections of unionized and nonunionized workers. Unions not only improve workers’ benefits, they also contribute to due process and provide a democratic voice for workers at the workplace and in the larger society.

— August 2003

1. The ECI data and the March CPS supplements show different benefit coverage rates with a union differential in coverage lower in the ECI than the CPS. This may reflect that the CPS reports individuals’ coverage while the ECI reports the coverage of occupational groups in establishments. The ECI overstates nonunion benefit coverage to the extent that uncovered nonunion workers are present in unionized occupation groups.

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Majorities of Americans say unions have a positive effect on U.S. and that decline in union membership is bad

As Labor Day approaches, a narrow majority of Americans continue to say labor unions have a positive effect on the way things are going in the United States. Most Americans also say the long-term decrease in the percentage of workers represented by unions is bad for working people in the U.S., and for the country as a whole, according to recent Pew Research Center surveys.

As of July, 55% of U.S. adults say labor unions have a positive effect on the way things are going in the country, unchanged from August 2019, the last time the Center asked this question. While the overall figure has remained the same, Democrats have become more likely – and Republicans less likely – to say unions have a positive effect.

Around three-quarters of Democrats and independents who lean to the Democratic Party (74%) now say labor unions have a positive effect on the way things are going in the country, up from 66% in August 2019. The share of Republicans and GOP leaners who say unions have a positive effect has fallen from 44% to 34% during that span. Democrats and Republicans have diverged in their views of several other institutions since 2019, too.

This analysis relies on data from Pew Research Center surveys conducted in July 2021 and April 2021. The July survey examines unions’ perceived effect on the way things are going in the United States today; it was conducted July 8-18, 2021, among 10,221 U.S. adults. The April survey – conducted April 5-11, 2021, among 5,109 U.S. adults – examines attitudes about the declining share of American workers who are represented by unions. For the exact questions in both surveys, as well as more information about their methodology, see the links above.

Everyone who took part in both surveys is a member of the Center’s American Trends Panel (ATP), an online survey panel that is recruited through national, random sampling of residential addresses. This way nearly all U.S. adults have a chance of selection. The survey is weighted to be representative of the U.S. adult population by gender, race, ethnicity, partisan affiliation, education and other categories. Read more about the ATP’s methodology .

Liberal Democrats are especially likely to see labor unions in a positive light, while conservative Republicans are especially likely to view them negatively. More than eight-in-ten liberal Democrats (83%) say unions have a positive effect on the way things are going in the U.S., but only around a quarter (27%) of conservative Republicans agree. Seven-in-ten conservative Republicans say unions have a negative effect on the way things are going in the country today.

Around two-thirds of Black adults (68%) and 64% of Hispanic adults say unions have a positive effect on the way things are going, compared with smaller shares of White and Asian adults (51% and 50%, respectively).

Younger adults see unions more positively than older Americans. For example, while 69% of those ages 18 to 29 say unions have a positive effect, fewer than half (44%) of Americans ages 65 and older say the same.

The percentage of American workers who belong to a labor union has declined in recent decades, despite a slight uptick last year amid the COVID-19 pandemic . In 2020, 10.8% of wage and salary workers ages 16 and older belonged to a labor union, down from 13.4% in 2000, according to the Bureau of Labor Statistics.

Six-in-ten U.S. adults say the large reduction in the percentage of workers represented by unions over the past several decades has been very or somewhat bad for working people, while a similar share (56%) say it has been very or somewhat bad for the country, according to an April 2021 Pew Research Center survey .

On these questions, too, Democrats and Republicans hold very different views. Around three-quarters of Democrats and Democratic leaners (76%) say the long-term decline in union representation has been very or somewhat bad for working people, while a similar share (72%) say it has been bad for the country. By contrast, most Republicans and GOP leaners say the decrease has been very or somewhat good for working people (55%) and for the broader nation (57%).

Among Republicans, attitudes about the long-term decline in unionization in the U.S. differ by demographic factors including age, education and income. While 72% of Republicans with higher incomes say the decline in unionization has been very or somewhat good for working people, fewer middle-income Republicans (55%) and Republicans with lower incomes (45%) share this view.

John Gramlich is an associate director at Pew Research Center .

Majorities of adults see decline of union membership as bad for the U.S. and working people

From businesses and banks to colleges and churches: americans’ views of u.s. institutions, 2023 saw some of the biggest, hardest-fought labor disputes in recent decades, about one-in-six u.s. journalists at news outlets are part of a union; many more would join one if they could, amazon vote comes amid recent uptick in u.s. unionization rate, most popular.

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The state of AI in early 2024: Gen AI adoption spikes and starts to generate value

If 2023 was the year the world discovered generative AI (gen AI) , 2024 is the year organizations truly began using—and deriving business value from—this new technology. In the latest McKinsey Global Survey  on AI, 65 percent of respondents report that their organizations are regularly using gen AI, nearly double the percentage from our previous survey just ten months ago. Respondents’ expectations for gen AI’s impact remain as high as they were last year , with three-quarters predicting that gen AI will lead to significant or disruptive change in their industries in the years ahead.

About the authors

This article is a collaborative effort by Alex Singla , Alexander Sukharevsky , Lareina Yee , and Michael Chui , with Bryce Hall , representing views from QuantumBlack, AI by McKinsey, and McKinsey Digital.

Organizations are already seeing material benefits from gen AI use, reporting both cost decreases and revenue jumps in the business units deploying the technology. The survey also provides insights into the kinds of risks presented by gen AI—most notably, inaccuracy—as well as the emerging practices of top performers to mitigate those challenges and capture value.

AI adoption surges

Interest in generative AI has also brightened the spotlight on a broader set of AI capabilities. For the past six years, AI adoption by respondents’ organizations has hovered at about 50 percent. This year, the survey finds that adoption has jumped to 72 percent (Exhibit 1). And the interest is truly global in scope. Our 2023 survey found that AI adoption did not reach 66 percent in any region; however, this year more than two-thirds of respondents in nearly every region say their organizations are using AI. 1 Organizations based in Central and South America are the exception, with 58 percent of respondents working for organizations based in Central and South America reporting AI adoption. Looking by industry, the biggest increase in adoption can be found in professional services. 2 Includes respondents working for organizations focused on human resources, legal services, management consulting, market research, R&D, tax preparation, and training.

Also, responses suggest that companies are now using AI in more parts of the business. Half of respondents say their organizations have adopted AI in two or more business functions, up from less than a third of respondents in 2023 (Exhibit 2).

Gen AI adoption is most common in the functions where it can create the most value

Most respondents now report that their organizations—and they as individuals—are using gen AI. Sixty-five percent of respondents say their organizations are regularly using gen AI in at least one business function, up from one-third last year. The average organization using gen AI is doing so in two functions, most often in marketing and sales and in product and service development—two functions in which previous research  determined that gen AI adoption could generate the most value 3 “ The economic potential of generative AI: The next productivity frontier ,” McKinsey, June 14, 2023. —as well as in IT (Exhibit 3). The biggest increase from 2023 is found in marketing and sales, where reported adoption has more than doubled. Yet across functions, only two use cases, both within marketing and sales, are reported by 15 percent or more of respondents.

Gen AI also is weaving its way into respondents’ personal lives. Compared with 2023, respondents are much more likely to be using gen AI at work and even more likely to be using gen AI both at work and in their personal lives (Exhibit 4). The survey finds upticks in gen AI use across all regions, with the largest increases in Asia–Pacific and Greater China. Respondents at the highest seniority levels, meanwhile, show larger jumps in the use of gen Al tools for work and outside of work compared with their midlevel-management peers. Looking at specific industries, respondents working in energy and materials and in professional services report the largest increase in gen AI use.

Investments in gen AI and analytical AI are beginning to create value

The latest survey also shows how different industries are budgeting for gen AI. Responses suggest that, in many industries, organizations are about equally as likely to be investing more than 5 percent of their digital budgets in gen AI as they are in nongenerative, analytical-AI solutions (Exhibit 5). Yet in most industries, larger shares of respondents report that their organizations spend more than 20 percent on analytical AI than on gen AI. Looking ahead, most respondents—67 percent—expect their organizations to invest more in AI over the next three years.

Where are those investments paying off? For the first time, our latest survey explored the value created by gen AI use by business function. The function in which the largest share of respondents report seeing cost decreases is human resources. Respondents most commonly report meaningful revenue increases (of more than 5 percent) in supply chain and inventory management (Exhibit 6). For analytical AI, respondents most often report seeing cost benefits in service operations—in line with what we found last year —as well as meaningful revenue increases from AI use in marketing and sales.

Inaccuracy: The most recognized and experienced risk of gen AI use

As businesses begin to see the benefits of gen AI, they’re also recognizing the diverse risks associated with the technology. These can range from data management risks such as data privacy, bias, or intellectual property (IP) infringement to model management risks, which tend to focus on inaccurate output or lack of explainability. A third big risk category is security and incorrect use.

Respondents to the latest survey are more likely than they were last year to say their organizations consider inaccuracy and IP infringement to be relevant to their use of gen AI, and about half continue to view cybersecurity as a risk (Exhibit 7).

Conversely, respondents are less likely than they were last year to say their organizations consider workforce and labor displacement to be relevant risks and are not increasing efforts to mitigate them.

In fact, inaccuracy— which can affect use cases across the gen AI value chain , ranging from customer journeys and summarization to coding and creative content—is the only risk that respondents are significantly more likely than last year to say their organizations are actively working to mitigate.

Some organizations have already experienced negative consequences from the use of gen AI, with 44 percent of respondents saying their organizations have experienced at least one consequence (Exhibit 8). Respondents most often report inaccuracy as a risk that has affected their organizations, followed by cybersecurity and explainability.

Our previous research has found that there are several elements of governance that can help in scaling gen AI use responsibly, yet few respondents report having these risk-related practices in place. 4 “ Implementing generative AI with speed and safety ,” McKinsey Quarterly , March 13, 2024. For example, just 18 percent say their organizations have an enterprise-wide council or board with the authority to make decisions involving responsible AI governance, and only one-third say gen AI risk awareness and risk mitigation controls are required skill sets for technical talent.

Bringing gen AI capabilities to bear

The latest survey also sought to understand how, and how quickly, organizations are deploying these new gen AI tools. We have found three archetypes for implementing gen AI solutions : takers use off-the-shelf, publicly available solutions; shapers customize those tools with proprietary data and systems; and makers develop their own foundation models from scratch. 5 “ Technology’s generational moment with generative AI: A CIO and CTO guide ,” McKinsey, July 11, 2023. Across most industries, the survey results suggest that organizations are finding off-the-shelf offerings applicable to their business needs—though many are pursuing opportunities to customize models or even develop their own (Exhibit 9). About half of reported gen AI uses within respondents’ business functions are utilizing off-the-shelf, publicly available models or tools, with little or no customization. Respondents in energy and materials, technology, and media and telecommunications are more likely to report significant customization or tuning of publicly available models or developing their own proprietary models to address specific business needs.

Respondents most often report that their organizations required one to four months from the start of a project to put gen AI into production, though the time it takes varies by business function (Exhibit 10). It also depends upon the approach for acquiring those capabilities. Not surprisingly, reported uses of highly customized or proprietary models are 1.5 times more likely than off-the-shelf, publicly available models to take five months or more to implement.

Gen AI high performers are excelling despite facing challenges

Gen AI is a new technology, and organizations are still early in the journey of pursuing its opportunities and scaling it across functions. So it’s little surprise that only a small subset of respondents (46 out of 876) report that a meaningful share of their organizations’ EBIT can be attributed to their deployment of gen AI. Still, these gen AI leaders are worth examining closely. These, after all, are the early movers, who already attribute more than 10 percent of their organizations’ EBIT to their use of gen AI. Forty-two percent of these high performers say more than 20 percent of their EBIT is attributable to their use of nongenerative, analytical AI, and they span industries and regions—though most are at organizations with less than $1 billion in annual revenue. The AI-related practices at these organizations can offer guidance to those looking to create value from gen AI adoption at their own organizations.

To start, gen AI high performers are using gen AI in more business functions—an average of three functions, while others average two. They, like other organizations, are most likely to use gen AI in marketing and sales and product or service development, but they’re much more likely than others to use gen AI solutions in risk, legal, and compliance; in strategy and corporate finance; and in supply chain and inventory management. They’re more than three times as likely as others to be using gen AI in activities ranging from processing of accounting documents and risk assessment to R&D testing and pricing and promotions. While, overall, about half of reported gen AI applications within business functions are utilizing publicly available models or tools, gen AI high performers are less likely to use those off-the-shelf options than to either implement significantly customized versions of those tools or to develop their own proprietary foundation models.

What else are these high performers doing differently? For one thing, they are paying more attention to gen-AI-related risks. Perhaps because they are further along on their journeys, they are more likely than others to say their organizations have experienced every negative consequence from gen AI we asked about, from cybersecurity and personal privacy to explainability and IP infringement. Given that, they are more likely than others to report that their organizations consider those risks, as well as regulatory compliance, environmental impacts, and political stability, to be relevant to their gen AI use, and they say they take steps to mitigate more risks than others do.

Gen AI high performers are also much more likely to say their organizations follow a set of risk-related best practices (Exhibit 11). For example, they are nearly twice as likely as others to involve the legal function and embed risk reviews early on in the development of gen AI solutions—that is, to “ shift left .” They’re also much more likely than others to employ a wide range of other best practices, from strategy-related practices to those related to scaling.

In addition to experiencing the risks of gen AI adoption, high performers have encountered other challenges that can serve as warnings to others (Exhibit 12). Seventy percent say they have experienced difficulties with data, including defining processes for data governance, developing the ability to quickly integrate data into AI models, and an insufficient amount of training data, highlighting the essential role that data play in capturing value. High performers are also more likely than others to report experiencing challenges with their operating models, such as implementing agile ways of working and effective sprint performance management.

About the research

The online survey was in the field from February 22 to March 5, 2024, and garnered responses from 1,363 participants representing the full range of regions, industries, company sizes, functional specialties, and tenures. Of those respondents, 981 said their organizations had adopted AI in at least one business function, and 878 said their organizations were regularly using gen AI in at least one function. To adjust for differences in response rates, the data are weighted by the contribution of each respondent’s nation to global GDP.

Alex Singla and Alexander Sukharevsky  are global coleaders of QuantumBlack, AI by McKinsey, and senior partners in McKinsey’s Chicago and London offices, respectively; Lareina Yee  is a senior partner in the Bay Area office, where Michael Chui , a McKinsey Global Institute partner, is a partner; and Bryce Hall  is an associate partner in the Washington, DC, office.

They wish to thank Kaitlin Noe, Larry Kanter, Mallika Jhamb, and Shinjini Srivastava for their contributions to this work.

This article was edited by Heather Hanselman, a senior editor in McKinsey’s Atlanta office.

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