Unionization Improves Pay and Benefits of African Americans
April 8, 2008 - 6:49pm ET
The increasing wealth gap between the rich, the middle class, and the poor has become too obvious too ignore. The top 10% of income earners in the United States now own 70% of the wealth, and the wealthiest 1% own more than the bottom 95%, according to the Federal Reserve. In 2005, the top 300,000 Americans enjoyed about the same share of the nation's income - 21.8% - as the bottom 150 million.
A study released on March 31, 2008, by the Center for Economic and Policy Research (CEPR) demonstrates how unions can provide a key counterweight to this phenomenon, especially for African Americans, who remain in many ways at the bottom of this country’s economic food chain. This report shows that unionized African Americans make substantially more money and have substantially better benefits than their non-union counterparts.
The report, "Unions and Upward Mobility for African-American Workers," found that unionized black workers earned, on average, 12 percent more than their non-union peers. In addition, black workers in unions were much more likely to have health-insurance benefits and a pension plan.
"The data demonstrate that unions raise wages and increase access to health insurance and pensions," said John Schmitt, a Senior Economist at CEPR and the author of the study. "Unions continue to be a central element of any plan to improve economic equality in this country."
The report, which analyzed data from the Census Bureau's Current Population Survey (CPS), found that unionization raises the pay of African-American workers by about $2.00 per hour. According to the report, black workers in unions were also 16 percentage points more likely to have employer-provided health insurance and 19 percentage points more likely to have an employer-provided pension plan than black workers who were not in unions.
According to the study, unionization has an even more dramatic effect on black workers in low-wage jobs. Among African-American workers in the 15 lowest-paying occupations, union members earned 14 percent more than those workers who were not in unions. In the same low-wage occupations, unionized black workers were 20 percentage points more likely to have employer-provided health insurance and 28 percentage points more likely to have a pension plan than their non-union counterparts.
Union membership in the United States is now hovering at around 12 percent of the workforce, down from 35 percent in the 1950's, with unionization in the private sector now at 7.4 percent, the lowest in a century. An April 2007 study by the Campaign for America’s Future, estimated that an increase in union membership of just 10 percent would provide an additional 3.5 million people with health insurance and nearly 2.8 million more people with pensions.
Just such an increase in unionization was anticipated as a result of passage of the Employee Free Choice Act (EFCA), which passed the House of Representatives in March of 2007 on a 241-185 vote, only to be defeated in the Senate. EFCA would allow workers to form unions through so-called "majority signup" elections, mandate binding arbitration for first contracts where the parties cannot agree, and impose financial penalties on employers for firing pro-union employees.
Unionization is still a major driving force – perhaps the driving force – in the creation and maintenance of a true “middle class” in this country. Nothing else on the progressive agenda comes close to promising this type of reduction in the disparity of wealth that is a constant presence in our society.
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Views expressed on this page are those of the authors and not necessarily those of Campaign for America's Future or Institute for America's Future