Unionization Leads To Big Jump In Pay And Benefits For Low-Wage Workers
Among workers in traditionally low-paying occupations, union members earn higher wages and are significantly more likely to have access to health and pension benefits than their non-unionized counterparts, according to a study published by the Center for Economic and Policy Research (CEPR).
Using data drawn from the Current Population Survey, the study looked at the differences in the wages and benefits earned by unionized and non-unionized employees working in 15 of the lowest-paying occupations in the United States, including laborers, cashiers, food preparation workers, janitors, security guards, child care workers, and nursing and home-health aides.
Recent reports by the National Bureau of Economic Research indicate that over 40 million jobs in the United States pay low wages, roughly translating to one of every three jobs held by American workers. Approaches to combat the effects of low pay on the quality of life of workers include enhancing existing labor standards, such as the minimum wage, and establishing stricter basic labor standards, such as guarantees of vacation and other leave. The CEPR study explores the strategy of greater unionization to improve pay, benefits, and working conditions, by promoting the bargaining power of low-wage workers. The CEPR estimates that about 13.6% of U.S. workers are unionized.
The analysis showed that, for non-union workers, the median hourly wage in 2006 was $9.03, with food preparation workers earning the least ($7.80), and security guards, the most ($10.94) per hour. In contrast, unionized food preparation workers earned $10.32 per hour and unionized security guards earned $14.86 per hour. The median hourly wage in 2006 for unionized workers across these 15 low-paying occupations was $12.39, with home care aides earning the lowest ($9.87), and grounds maintenance workers, the highest ($15.35) hourly wage.
Because union workers may be more likely to have characteristics associated with higher wages, such as being older or having more formal education, researchers created a second set of results using standard regression techniques to control for potential differences between the unionized and non-unionized workforces. Yet, even after controlling for these effects, researchers said, the union wage premium for workers in low-wage occupations amounted to 16.4%, or about $1.75 an hour.
The study also found that unionized workers in low-wage occupations are far more likely to receive health care and retirement benefits than non-unionized workers in similar positions. Among the unionized workers in these 15 occupations, 63.3% have employer-provided health insurance, and 59.8% have pension benefits. By contrast, just 27.6% of non-unionized employees in these occupations have health care coverage, and only 21.2% have a pension, according to the study.
“Our findings contradict the widespread belief that low-wage jobs are incapable of providing decent pay and benefits,” said John Schmitt, a senior economist at the CEPR and one of the study’s authors. “When workers have a voice at work, they can dramatically increase their wages and benefits, even in what are traditionally badly paying jobs.”
