On the Benefits of Labor Unions

Introduction

The American labor movement has been in a steady decline over the last several decades. Despite the fact that most Americans have a positive view of labor unions, membership has fallen dramatically since its peak in 1954 (when it stood at about 34.8% of the workforce), reaching a dismal low of 10.7% in 2017. With the topic of unionization (along with labor issues more broadly) re-entering the public discourse over the past few years, it is worth taking a look at the extensive and well-documented benefits of unions, in order to remind people of why they think fondly of these institutions, and hopefully inspire them to put their favorable views into practice by becoming members.

Economic and Social Benefits of Unions

Firstly, unions have a positive impact at the workplace, with benefits ranging from higher wages and better job safety, to higher productivity and output. A 2020 study in The Economic Journal found that “increasing union density at the firm level leads to a substantial increase in both productivity and wages,” while a 2017 study in The British Medical Journal (conducted at Harvard University) found that reduced union membership (caused primarily by the proliferation of so-called “right to work” laws) has led to a 14.2% increase in workplace fatalities since 1992.

Unions play a crucial role in protecting the rights of workers. A 2021 paper from the National Bureau of Economic Research found that an “increased union coverage rate” is associated with “reductions in labor violations.”

Even in times of relative weakness for the labor movement, unions continue to have a positive effect; a 2017 study in the journal Social Forces found that “unions use non-market sources of power to pressure companies into raising wages… even in a period of labor weakness unions still play a role in setting wages for their members.”

Unions also produce social benefits; according to a 2019 study in the American Journal of Industrial Medicine, “a 10% increase in union density was associated with a 17% relative decrease in overdose/suicide mortality.” In an era of ever-escalating mental health and substance abuse epidemics, this is important to keep in mind. In short, conditions, compensation, productivity, and output are all benefited by an increase in union membership, and this in turn has a host of positive economic and social effects.

Labor Unions and Inequality

Labor unions are also an extremely important tool for fighting inequality. A 2018 study from Princeton University found that “when unions expand, whether at the national level or the state level, they tend to draw in unskilled workers and raise their relative wages, with significant impacts on inequality.” The study also notes that “since at least the early twentieth century, U.S. income inequality has varied inversely with union density.” Another paper from the Journal of Financial and Quantitative Analysis found that “firms with strong unions pay their CEOs less.” Combining this with the positive impact of unionization on workers’ wages helps to explain their impact on inequality.

In addition, a 2020 study in the American Journal of Sociology found that “right to work laws work as intended, increasing economic inequality indirectly by lowering labor power resources.” In other words, increasing unionization reduces inequality, while measures to lower unionization rates (such as right to work laws) lead to an increase in inequality. When one considers the well-documented harmful effects of inequality (ranging from worse health outcomes to slower economic growth), the benefits of unions as they relate to inequality become all the clearer.

The Political Impact of Unionization

Finally, it must also be noted that unions have a significant impact in the political sphere. A 2020 study in the journal Perspectives on Politics found that “local unions significantly dampen unequal responsiveness to high incomes: a standard deviation increase in union membership increases legislative responsiveness towards the poor by about six to eight percentage points.” In other words, high rates of unionization force politicians to respond to the demands of the poor and working class. There is also a self-reinforcing element to this phenomenon; a 2020 study in the Journal of Public Policy found that “Republican governments are less likely to adopt restrictive policies when unions are strong and when union support among middle and low-income earners is high.” In other words, high levels of unionization and union support help to prevent right-wingers from implementing anti-union policies. This may lead to a gradual political shift towards the left, as the right’s ability to subvert the labor movement is reduced.

Unionized workers also tend to be more politically conscious; a 2019 study in the journal Political Behavior found that union members “are significantly more politically knowledgeable than their non-union counterparts and better informed about where political parties and candidates stand on the issues.” This trend was found to be particularly strong among “those with less formal education, who face higher costs in seeking out political information.” These factors may in turn lead to policies which reduce poverty and inequality; indeed, a 2003 study in the American Sociological Review found that “The extent of redistribution (measured as poverty reduction via taxes and transfers)” is determined, at least in part, by the strength of labor unions (as well as the political left more broadly). A 2019 paper from the Social Science Quarterly found that “where labor unions are stronger, higher levels of income inequality prompt greater support for welfare spending.” In other words, unions help to foster greater political education among their members, while increasing the representative power of the poor and working class. This in turn increases support for (and subsequent enactment of) redistributive policies, which greatly reduce poverty and inequality.

Conclusion

All in all, the evidence on labor unions is quite clear: they improve wages and working conditions; they raise productivity and output; they reduce inequality, suicide, and drug abuse; they give a organized voice to the working class, and they raise the political consciousness of their members. This helps to explain why the majority of the population has a positive view of labor unions; hopefully, by raising awareness of these facts, we can encourage people to actually join unions, swelling the ranks of the labor movement, and contributing to the positive impacts discussed above.

Sources

Writing on politics, economics, etc.

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