Today’s depressed wages can be attributed to a variety of economic trends - from globalization and sending jobs offshore to new technologies and immigrant labor - but economists and scholars also point to the dramatic decline in U.S. union membership in the past 60 years, which has left rank-and-file workers without a powerful public advocate.
Labor unions were a dominant force in the economy in the 1950s, when they represented more than a third of American workers. Today, unionized workers represent about 12 percent of the workforce, and only 7 percent of private workers. Even in the most heavily unionized sector - the government, at 37 percent - they are under attack.
Voters in Wisconsin turned back an effort to oust Republican Gov. Scott Walker’s because of his drive to curb collective bargaining rights of state workers, while two California cities easily passed referendums to trim unionized city workers pension benefits.
And Republican opponents of organized labor also scored a victory in Virginia this week by forcing the coalition of governments building Metro’s Silver Line into Loudoun County to drop incentives to use union labor in the $6 billion project.
While labor unions may not be as popular or powerful as they once were, economists say their presence remains an important influence in boosting wages and benefits for workers.
“In terms of wages, belonging to a union is roughly equal to having a college degree,” said sociologist Bruce Western of the Council on Foreign Relations. “Research shows that union membership in the private sector increases a workers’ compensation by 10 percent to 20 percent.”
The benefits of collective bargaining go well beyond unionized plants and affect nonunionized industries, studies show.
“One hallmark of the first 30 years after World War II was the countervailing power of labor unions, and their ability to raise wages and working standards for members and nonmembers alike,” said Colin Gordon, a history professor at the University of Iowa.
Unions not only were successful at boosting the share of corporate profits devoted to wage gains for average workers, he said, but they also were effective at keeping a lid on growth in executive salaries as they served as watchdogs against the kind of explosive growth in executive compensation seen today.
Labor unions worked to ensure prosperity was shared more broadly, Mr. Gordon said. But as labor unions have declined, an increasing share of income has gone to shareholders and workers at the top who already are well-to-do.
That has led to an income gap larger than any seen in more than a century, when - like today - only about 10 percent of the workforce was unionized, he said.
Today, even though the number of unionized workers is dwindling, they continue to be paid more than nonunionized workers for similar jobs. The premium enjoyed by unionized workers is particularly big for those with the least job skills, such as janitors, Mr. Gordon said.
The heavily unionized government sector also is the only sector where workers today routinely still get cost-of-living increases. But as the employees in Wisconsin, Ohio, Florida and other states found out, the Great Recession may be changing that.
The public revolt against government pay raises seen in recent years suggests that the table has turned. The lower pay of nonunionized workers is now the prevailing standard that is influencing the pay of unionized government employees.
“The Wisconsin recall election may be the swan song of Big Labor,” said Americans for Limited Government President Bill Wilson, noting that unions spent millions of dollars in their unsuccessful campaign to unseat the Republican governor.
“The people of Wisconsin sent a shock wave to elected officials across the nation in favor of putting the taxpayer back in charge of the government budget process and wresting control from those unions who are driving our nation’s local, state and federal governments into bankruptcy,” he said.