Princeton economists find that unions had historical role in helping address income inequality

The rise in income inequality between skilled and unskilled workers since the 1970s might be due, at least in part, to a decline in union membership, Princeton University researchers have found.

…The researchers examined a new source of union membership data dating to the 1930s: monthly Gallup opinion polls that collected a variety of information about Americans, including their race, gender, income and political opinions. The pollsters also asked interviewees whether a member of their household belonged to a union.

Among the study’s findings were that unions consistently have provided workers with a 10- to 20-percent wage boost over their non-union counterparts over the past eight decades. The researchers also discovered that when unions have expanded, whether at the national or state level, they tended to draw in more unskilled workers and raise their relative wages, with significant impacts on inequality.

…Herbst oversaw the team of research assistants that combed through Gallup archives from 1936 to 1986. The data was indexed primarily in documents handwritten by pollsters who called people’s homes for interviews, which made it a challenge to collect and standardize the information for study. Reporting categories changed over the years, as did the methods of collecting information. In all, the team assessed 980,000 data points across 500 surveys. 

They then filled in union membership numbers from 1986 to the present using the Current Population Survey from the Census Bureau. Doing so gave the researchers a big-picture view of how unions grew to their height in the 1950s and 1960s, then began to recede. Through access to data over a longer time frame, the researchers were able to see certain patterns emerge.

…Disadvantaged groups — those that are non-white, less educated or both — not only were enrolled in unions in higher numbers in the 1950s, but generally, their wage premium was even larger relative to their non-union counterparts than that of white and/or more-educated union workers.

Some economists see changes in technology and a demand for more-skilled workers as leading to lower union numbers and driving inequality in the late 20th century. But the new data suggests there might be more to the story, Herbst said.

“Those theories often predict that as more-skilled workers leave unions, the average union member should be less skilled and less advantaged, and what we’re finding is the opposite,” Herbst said. 

In fact, union members are more skilled than ever, even if smaller in their numbers.

Princeton economists find that unions had historical role in helping address income inequality



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