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Unions good for American wages, too, study reveals

Date Posted: May 30 2008

WASHINGTON - "Economic data have long demonstrated a substantial wage premium for unionized workers" - on the order of 10 to 20 percent - for average U.S. workers, said a new study by the progressive Center for Economic and Policy Research.

The report said for the typical U.S. worker - the earner right in the middle of the national pay scale - unionization raises wages about 13.7 percent. For high wage earners, in the top 10 percent, unionization raises incomes by 6.1 percent.

But the focus of their study was on the affects of unionization on low-wage workers, where the news is even better.

"Unionization raises wages for all workers, but unions have by far the biggest impact on the wages of the lowest-paid workers," said John Schmitt, a Senior Economist at CEPR and the author of the study. The report, "The Union Advantage for Low-Wage Workers," finds that unionization raises the wages of the typical low-wage worker by 20.6 percent.

"Unions give the biggest boost to low-wage workers because these are the workers that have the least bargaining power in the labor market," Schmitt said. "Unionization has a large and measurable impact on the bargaining power, and therefore the wages, of low-wage workers."

Over the period covered in the report, 13.8 percent of American workers were either members of a union or covered by a union contract at their workplace. Over the same period, the unionization rate varied widely across the United States, from 3.9 percent in North Carolina to 26.4 percent in New York.

Michigan's 21.8 percent unionization rate brought a union premium of 13.9 percent for the lowest paid workers, and 4.1 percent for the highest paid.

Commenting on the study, AFL-CIO President John Sweeney said "For millions of workers who work hard and take home less to show for it, being part of a union that provides a say on the job is all the more important. This study proves that for workers on the bottom rungs of the pay scale, bargaining power is the best, and often only, means to gain a leg up to the middle class."