links for 2011-02-28

  • From 1973 to 2007, union membership among U.S. men working full-time in private-sector jobs declined from 35 to 10 percent. Inequality in men’s weekly earnings increased by nearly 70 percent in this same period. We study the effect de-unionization on rising inequality, with a variance decomposition that accounts for how unions raise average earnings and also reduce inequality in earnings among union workers. Going beyond earlier research, we also argue, that unions reduce inequality by establishing norms for fair wages, raising pay in the nonunion sector. Accounting for the effect of unions on the wages of union members and the effect of unions on non-union wage norms, suggests that union decline explains about 25 percent of the growth in inequality—an effect equal to the growing stratification of earnings by education.