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Saturday, Nov. 14, 2020

Has a decline in union membership coincided with greater income inequality in the US?

Esther Tsvayg, Gigafact Foundry
yes

According to the pro-labor Economic Policy Institute, as union membership has declined since the late 1970s, the income share going to the middle 60% of wage earners has decreased, while the income share going to the richest 10% of Americans has increased.

Some economists (including Richard Freeman and James Medoff in their book "What Do Unions Do?") have demonstrated that unions raise the wage floor for both unionized and non-unionized workers—and thus, that weakened unions contribute to greater income inequality. A 2011 American Sociological Review paper found "the decline of organized labor explains a fifth to a third of the growth in inequality" from 1973 to 2007. A 2017 paper from the National Bureau of Economic Research found the union wage premium was larger for low-earners, Black workers and workers with less education.

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