Unions Impact Wages, But How Much?

While unions have a significant impact on wages as well as overall compensation and benefit levels, the size of the impact is influenced by occupation, industry, employer size, and geographic region. The 2010 annual report on Union Members prepared by the Bureau of Labor Statistics (BLS) shows current union membership rate at about 12% (14.7 million members), but there is a huge difference in the degree of organization by type of employer. Public sector workers are over 36% organized, while only about 7% of private sector workers are represented by unions (note that there are five times as many employees in the private sector).

  • Geography: New York had the highest union membership rate (24%), while North Carolina had the lowest (3%).
  • Occupation: Education, training, and library occupations (37%) and protective service occupations (almost 36%) had the highest unionization rates, while farming, fishing, and forestry and sales occupations had the lowest (about 3%).
  • Industry: Highest unionization rates were in transportation and utilities (22%), telecommunications (16%), and construction (13%), with lowest rates in agriculture and finance (about 2%).
  • The BLS data also calculated median wages for union and non union-workers. The median weekly earnings for full-time wage and salary workers for union members were $917, compared to $717 for those not represented by unions. But this average 28% differential varies dramatically when analyzed by factors such as occupation, industry, firm size, and geographic region. Further details are found in the report. The presence of a union affects much more than just wages -- the basic pay structure, pay premiums, and, of course, medical benefits, paid and unpaid leave, hours of work and work rules, and many other working conditions are often covered by collective bargaining. Research shows that unionized workers are 19% more likely to have health insurance than non-union workers and about 24% more likely to have retirement plans, after controlling for age, gender, education, and industry.

    So unions bring higher wages and a higher probability of health and pension coverage, but the actual differences for any individual are very dependent on occupation, industry, and geography.

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