There is power in the union

The Economic Policy Institute (EPI) noted recently that productivity rose by nearly 65% between 1979 and 2013, while pay rose by only 8.2%. Workers been working harder, it seems, while receiving no commensurate wage gains?  The median weekly salary hasn't budged since this time last year – while the Consumer Price Index rose by 2.1%.

Pay levels for most working folks have been treading water since the late 1970s, even as more wealth has migrated to the top 1% of the population. High earners increased their take of all income from 7.9% in 1979 to 12.9% in 2010, and recovered wages lost during the recent recession much more quickly during the economic recovery of 2009 to 2012. From the years 2000 to 2012, college graduates saw a rise in pay of only 1%. For those with a high school diploma or only a smattering of college, wages actually fell during that time span.

Something else happened.

Labor union unionization rate of 35% in the 1950s fell to around 25% in the 1970s and now, private-sector unionization is only 6.6%. The EPI estimates that the erosion of unions accounts for one-fifth to one-third of wage and income inequality since the 1970s.

 Union members make more money – 13.6% more. In addition to the union wage premium, workers covered by a union contract usually have more employer-based benefits, such as health care. But other, non-unionized workers benefit, too, since collective bargaining has historically been responsible for setting the wage scale in a particular industry, regardless of the presence of a union.

Without unions to enforce the sharing of corporate profits, those at the top have made the most gains, while all others see little or no improvement in their compensation levels. In 2012, the manufacturing sector took in record profits of nearly $290 billion, even as it wrested more concessions from unions. General Electric, for example, now pays new union workers $14 per hour, compared to the hourly rate of $22 it was paying prior to 2005.

From here