How unions help all workers | Economic Policy Institute
The labor movement in the United States grew out of the need to of pure-and- simple unionism meant an arm's-length relationship to the state. The relationship between labor unions and firms is described as . union social responsibility has a positive relationship with union job. All business is essentially labor and management, whether or not formal unions are involved. In small businesses, lines get blurred because the owner or.
But most craft unions either refused or, as in iron and steel and in meat packing, failed to organize the less skilled.
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And since skill lines tended to conform to racial, ethnic, and gender divisions, the trade union movement took on a racist and sexist coloration as well. For a short period, the afl resisted that tendency. Formally or informally, the color bar thereafter spread throughout the trade union movement. Inblacks made up scarcely 3 percent of total membership, most of them segregated in Jim Crow locals. In the case of women and eastern European immigrants, a similar devolution occurred—welcomed as equals in theory, excluded or segregated in practice.
Only the fate of Asian workers was unproblematic; their rights had never been asserted by the afl in the first place. But the organizational dynamism of the labor movement was in fact located in the national unions.
Only as they experienced inner change might the labor movement expand beyond the narrow limits—roughly 10 percent of the labor force—at which it stabilized before World War I.
Partly because of the lure of progressive labor legislation, even more in response to increasingly damaging court attacks on the trade unions, political activity quickened after Henceforth it would campaign for its friends and seek the defeat of its enemies. This nonpartisan entry into electoral politics, paradoxically, undercut the left-wing advocates of an independent working-class politics. That question had been repeatedly debated within the afl, first in over Socialist Labor party representation, then in over an alliance with the Populist party, and after over affiliation with the Socialist party of America.
Although Gompers prevailed each time, he never found it easy. In response, the trade unions abandoned the Progressive party, retreated to nonpartisanship, and, as their power waned, lapsed into inactivity. It took the Great Depression to knock the labor movement off dead center. The discontent of industrial workers, combined with New Deal collective bargaining legislation, at last brought the great mass production industries within striking distance.
Lewis of the United Mine Workers and his followers broke away in and formed the Committee for Industrial Organization ciowhich crucially aided the emerging unions in auto, rubber, steel, and other basic industries. In the cio was formally established as the Congress of Industrial Organizations. By the end of World War IImore than 12 million workers belonged to unions, and collective bargaining had taken hold throughout the industrial economy.
In politics, its enhanced power led the union movement not to a new departure but to a variant on the policy of nonpartisanship. Not only did the cio oppose the Progressive party ofbut it expelled the left-wing unions that broke ranks and supported Henry Wallace for the presidency that year. The formation of the afl—cio in visibly testified to the powerful continuities persisting through the age of industrial unionism.
Above all, the central purpose remained what it had always been—to advance the economic and job interests of the union membership. Collective bargaining performed impressively after World War II, more than tripling weekly earnings in manufacturing between andgaining for union workers an unprecedented measure of security against old age, illness, and unemployment, and, through contractual protections, greatly strengthening their right to fair treatment at the workplace.
But if the benefits were greater and if they went to more people, the basic job-conscious thrust remained intact. Nothing better captures the uneasy amalgam of old and new in the postwar labor movement than the treatment of minorities and women who flocked in, initially from the mass production industries, but after from the public and service sectors as well. Thus the leadership structure remained largely closed to minorities—as did the skilled jobs that were historically the preserve of white male workers—notoriously so in the construction trades but in the industrial unions as well.
Yet the afl—cio played a crucial role in the battle for civil rights legislation in That this legislation might be directed against discriminatory trade union practices was anticipated and quietly welcomed by the more progressive labor leaders.
But more significant was the meaning they found in championing this kind of reform: The table shows that unionized workers are 3. Unions have a much greater impact on the incidence of pensions and health insurance benefits, with union workers Table 3 also shows the union impact on the financial value of benefits, including a breakdown of how much the greater value is due to greater incidence i.
For health benefits, the value added by unions mostly comes from the fact that union workers receive a far more generous health plan than nonunionized workers.
This factor accounts for Table 4 provides further information on the union premium for health insurance, pensions, and paid leave benefits, drawn from a different data source a series of supplements to the CPS than for Table 3. The difference between the union and nonunion compensation packages are presented in two ways: The last column presents the union premium, the percentage difference between union and nonunion compensation, calculated using the adjusted difference.
These data confirm that a union premium exists in every element of the compensation package. Unionized workers are Employers with unionized workforces also provide better health insurance—they pay an Finally, unionized workers are Thus, unionized workers are Union employers spend As defined benefit plans are preferable—they provide a guaranteed benefit in retirement—these data indicate that union workers are more likely to have better pension plans. Union workers also get more paid time off.
This includes having Another estimate, which includes vacations and holidays, indicates that union workers enjoy For example, in industries and occupations where a strong core of workplaces are unionized, nonunion employers will frequently meet union standards or, at least, improve their compensation and labor practices beyond what they would have provided if there were no union presence.
Union wage-setting, which has gained exposure through media coverage, has frequently established standards of what workers generally, including many nonunion workers, expect from their employers.
As unions weakened, especially in the manufacturing sector, their ability to set broader patterns has diminished. However, unions remain a source of innovation in work practices e. The impact of unions on wage dynamics and the overall wage structure is not easily measurable.
First, the union presence will likely be felt most in the markets where unions are seeking to organize—the nonunion employers affected are those in competition with unionized employers. These markets vary in nature. Some of these markets are national, such as many manufacturing industries, while others are local—janitors and hotel and supermarket workers.
Some markets are defined by the product—what employers sell, such as autos, tires and so on—while other markets are occupational, such as music, carpentry, and acting.
In practice, economists have used union density, the percentage of an industry that is unionized, as their proxy. The assumption here is that employers in highly organized settings face a higher threat of union organization than a nonunion employer in a mostly unorganized industry. In broad strokes, this is a reasonable assumption. However, taken too literally and simply, union density can be misleading. Second, the relationship between union density and nonunion wages is not linear.
Empirically, this means a 20 percentage point change in unionization density from zero to 20 may have no effect, but a change from 20 to 40 will have an effect. Therefore, the relationship between union density and nonunion wages depends on the level of density: The sensitivity of the results to the specification—a linear or nonlinear specification of union density—is seen in studies of the union threat effect.
A linear specification assumes that small changes at any level have the same impact, while a nonlinear specification allows the union effect to differ at different levels of unionization—perhaps less at low levels and more at medium or high levels. They found that union density had no association with higher nonunion pay the relationship was positive but not statistically significant. Mishel replicated those results p.
Farberhas conducted the most recent analysis of union threat effects, the relationship between union density and nonunion wages across industries, in the private sector. In one analysis, Farber finds a positive threat effect for the s, s, and mids. Farber also shows, not surprisingly, that the threat effect is greater for workers with no more than high school degree but minimal for those with a college degree. Nevertheless, threat effects still prevailed across decades for those without high school degrees and for those with high school degrees, and in the s for those with some college education.
For example, nonunionized high school graduates the largest category of workers in the United States earned 2. The union effect on total nonunion wages is nearly comparable to the effect of unions on total union wages. Table 5 illustrates the union impact on union, nonunion, and average wages among workers with a high school education. The total effect of unions on the average high school wage in this example is an 8. Two conclusions can be reached based on these studies. First, unions have a positive impact on the wages of nonunion workers in industries and markets where unions have a strong presence.
Second, because the nonunion sector is large, the union effect on the overall aggregate wage comes almost as much from the impact of unions on nonunion workers as on union workers. Unions and workplace protections An extensive array of labor laws and regulations protects workers in the labor market and the workplace.
However, beyond their role in initiating and advocating enactment of these laws and regulations, unions have also played an important role in enforcing workplace regulations. Unions have provided labor protections for their members in three important ways: Common to all of these rules is a desire to provide protections for workers either by regulating the behavior of employers or by giving workers access to certain benefits in times of need Weil ; Davis ; Amberg Over the years, these rules have become mainstays of the American workplace experience, constituting expressions of cherished public values Gottesman ; Freeman and Medoff Government agencies charged with the enforcement of regulations cannot monitor every workplace nor automate the issuance of insurance claims resulting from unemployment or injury.
This is done either by reporting an abuse or filing a claim. Unions have been crucial in this aspect by giving workers the relevant information about their rights and the necessary procedures, but also by facilitating action by limiting employer reprisals, correcting disinformation, aggregating multiple claims, providing resources to make a claim, and negotiating solutions to disputes on behalf of workers Freeman and Rogers ; Weil ; Hirsch, et al.
Evidence of the vital role of unions in implementing labor protections can be found in the research on various programs and benefits. Union membership significantly increases the likelihood that a worker will file a claim or report an abuse. Unemployment insurance Unemployment insurance UI is a joint federal and state program that was created in the Social Security Act of to provide some income replacement to workers who lose their job through no fault of their own.
Budd and McCall offer a cost-benefit decision-making analysis to explain the costs facing the unemployed worker in filing a UI claim.
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In fact, the main reason that many unemployed workers never file a claim is because they thought they were not eligible Wandner and Stettner The threat of an employer retaliating by not rehiring a laid-off worker might be another cost weighing on the decision to file a claim.
Unions can help offset the costs of workers who are laid off. Primarily, unions provide information to workers about benefit expectations, rules, and procedures, and dispel stigmas that might be attached to receiving a social benefit.
Unions also can negotiate in their contracts layoff recall procedures based on seniority and protection against firing for other than a just cause, as well as help workers build files in the case of a disputed claim Budd and McHall Additionally, the union-wage differential reduces the likelihood that unemployed workers will be ineligible for benefits because their pay is too low Wenger At the peak of UI coverage inone in every two unemployed workers received UI benefits.
Blank and Card found that the decline in unionization explained one-third of the decline in UI recipiency over this period.
How unions help all workers
These findings underscore the difference unions make in ensuring that the unemployment insurance system works. Considering that UI acts as a stabilizer for the economy during times of recession, the role of unions in this program is pivotal Wandner and Stettner The employer is liable in the system, regardless of fault, and in return they are protected from lawsuits and further liability. Once again, lack of information about eligibility and the necessary procedures for filing a claim forms the greatest obstacle to receipt of benefits.
Fear of employer-imposed penalties and employer disinformation are important other factors weighed by workers deciding whether to act. As with unemployment insurance, unions provide information to workers through their representatives, and they often negotiate procedures to handle indemnity claims. Through grievance procedures and negotiated contracts, unions protect workers from employer retaliation and, furthermore, act to dispel the notion among workers that employer retaliation is commonplace Hirsch et al.
According to Biddle, higher denial rates lead to lower claim rates. The robust finding of Hirsch et al. They currently have only 2, inspectors to monitor over seven million establishments. Following the trend of declining unionization, OSHA claims have dropped from their peak in of over 71, and are currently at close to 37, Siskind ; OSHA The leave taker is guaranteed the same or equivalent position upon return.
There is also widespread misunderstanding on the part of the employer about whom the act covers and when it applies. There is evidence that this leads employers to reject legally entitled leaves Budd and Brey Union members were found to have significantly less anxiety about losing their job or suffering other employer-imposed penalties for taking leave. And although the authors did not find union membership significantly increases the likelihood that a worker would take leave, they did find that union members were far more likely to receive full pay for leave taken.
The biggest obstacle to workers exercising their rights under the FMLA—besides the fact that the leave is unpaid rather than paid—is information, since only a very slim majority has even heard of the act.
Second, it established the hour work week for hourly wage earners, with an overtime provision of time and a half the hourly wage for work done beyond 40 hours. Trejo examined the union effect on compliance of the latter part of the FLSA, finding that employer compliance with the overtime pay regulation rose sharply with the presence of a union.
He hypothesizes that this result reflects the policing function of unions because unions often report violations to enforcement agencies. The workplace laws and regulations, which unions helped to pass, constitute the majority of the labor and industrial relations policies of the United States. Research has shown convincingly that unions have played a significant role in enforcing these laws and ensuring that workers are protected and have access to benefits to which they are legally entitled.
Unions make a substantial and measurable difference in the implementation of labor laws. Legislated labor protections are sometimes considered alternatives to collective bargaining in the workplace, but the fact of the matter is that a top-down strategy of legislating protections may not be influential unless there is also an effective voice and intermediary for workers at the workplace—unions.
Labor legislation and unionization are best thought of as complements, not substitutes.
Conclusion This paper has presented evidence on some of the advantages that unionized workers enjoy as the result of union organization and collective bargaining: Unions also set pay standards and practices that raise the wages of nonunionized workers in occupations and industries where there is a strong union presence. Collective bargaining fuels innovations in wages, benefits, and work practices that affect both unionized and nonunionized workers.
However, this review does not paint a full picture of the role of unions in workers lives, as unions enable due process in the workplace and facilitate a strong worker voice in the broader community and in politics. Many observers have stated, correctly, that a strong labor movement is essential to a thriving democracy.
Nor does this review address how unionism and collective bargaining affect individual firms and the economy more generally.
Analyses of the union effect on firms and the economy have generally found unions to be a positive force, improving the performance of firms and contributing to economic growth Freeman and Medoff ; Mishel and Voos ; Belman ; Belman and Block ; Stiglitz ; Freeman and Kleiner ; Hristus and Laroche ; with a dissenting view in Hirsch There is nothing in the extensive economic analysis of unions to suggest that there are economic costs that offset the positive union impact on the wages, benefits, and labor protections of unionized and nonunionized workers.
The ECI overstates nonunion benefit coverage to the extent that uncovered nonunion workers are present in unionized occupation groups. Some recent evidence for U. Belman, Dale and Richard Block. Upjohn Institute for Employment Research.
Do high claim-denial rates discourage claiming?