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New Study Shows Union Members Are $1.3 Million Better Off

A new U.S. study shows that even though a union member works less, because of earlier retirement and fewer hours of work, their salary income is actually higher than a non union member | The longer their union membership, the more significant the effect on wages

People protest in support of the unionizing efforts of the Alabama Amazon workers. (Photo: Lucy Nicholson / Reuters)
People protest in support of the unionizing efforts of the Alabama Amazon workers. (Photo: Lucy Nicholson / Reuters)
By Gal Rakover

Union membership increases the total salary a worker earns by $1.3 million over their lifetime, and is more lucrative than acquiring a tertiary education, according to a new study published in the United States.

According to this study, membership in a union creates employment stability and increases income, as well as increasing social mobility and lowering inequality.

The fact that union membership increases salary income is agreed upon in the academic literature. But the study's authors, Zachary Farolin and Tom VanHeublen, argue that previous studies tend to underestimate this effect because they look at the effect of union membership at a specific point in time.

In contrast, the new study examines the effect of consistent and continuous membership in labor unions on the income of an employee throughout their entire working life. The study finds that the longer the union membership, the more significant its effect on wages. In addition, it uncovered that in the long-term, union membership creates employment stability. These are all elements that are minimized in a short-term analysis.

Even though someone who has been a member of a labor union throughout their life works less, due to earlier retirement and fewer working hours, their average income amounts to $1.3 million more than someone who was not a member of a labor union. 

Google workers demonstrating in California. (Photo: Noah Berger / Noah Berger)
Google workers demonstrating in California. (Photo: Noah Berger / Noah Berger)

The study analyzed data from heads of households in the United States between 1969 and 2019, based on a database containing continuous information and extensive background data. With its help, the researchers were able to discount the effects of other factors such as race, gender or education, and accurately identify the effect of union membership.

In 2021 the proportion of unionized workers in the United States was 10.3%. This is one of the lowest in the developed world and consequently the level of inequality is also one of the highest. Among high-income countries, only Chile has a higher level of inequality than the United States, and Israel is not far behind.

Support for labor unions in the U.S. grew by 70%

However, we may be witnessing a reversal of a trend. In recent years, several cases of attempts to establish a union have received popular support, extensive media coverage and have been trending on social media. Well known examples of this are the establishment of the warehouse workers' union at Amazon, and the setting up of the Alphabet (Google) workers' union.

The data also indicates a changing trend. After falling to a low of under 50% in the first decade of the 21st century, support for unions in the United States has grown to over 70% in 2022, the highest rate since 1965, according to the website Vox. In the first half of 2022, unions won the most votes (on forming a union, for example) since 2006, with a success rate of 76.6%, the highest since 2000. Additionally, in the first half of 2022, 78,000 workers in the United States participated in strikes, more than 3 times compared to the first half in 2021.

According to the U.S. Department of Labor and Statistics, after increasing in 2020, the rate of unionization decreased in 2021; however the data for 2022 has not yet been published.

This article was translated from Hebrew by Rose Angela. 

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