Affordability's Key Ingredient Is Union Power
Tripling union membership would raise wages, reduce inequality and strengthen communities. Policymakers should take note.
Heidi Shierholz
Affordability — or the lack thereof — has dominated the recent political debate in the U.S. And for good reason. Across the country, too many families are struggling to make ends meet. However, almost every conversation about affordability focuses entirely on prices, as if the only way to make life more affordable is to make things cheaper.
But the actual driver of today’s affordability squeeze is suppressed pay — a consequence of decades of policy choices that weakened workers’ bargaining power and shifted income away from working people. Had pay for typical workers kept pace with productivity over the past 45 years, their paychecks today would be roughly 40% larger.
If policymakers are serious about addressing affordability, they would champion one institution that has consistently proven capable of raising pay: unions.
Through collective bargaining, unions are the most effective mechanism for workers to raise their wages and secure their fair share of the wealth they produce. Our new report at the Economic Policy Institute quantifies how transformative it would be to rebuild union power. Specifically, we examine what we stand to gain if we tripled current union membership to 30% — similar to its peak in the U.S. before decades of relentless attacks on unions and collective bargaining eroded it, and just shy of the current rate in Canada.
We find that tripling union membership would raise pay for the typical worker by more than $7,700 every year, or nearly $270,000 over a 35-year career. This would be life-changing for a working family — nearly covering the cost of raising a child from birth through age 17, for example. And those increases aren’t just for unionized workers — strong unions also benefit nonunion workers by establishing broad standards that employers must follow to get and keep the workers they need.
The gains from tripling union density would be especially significant for Black and Hispanic workers, who get a larger boost from unionization than white workers. This is because unions provide transparency and other guardrails that help protect workers from employer discrimination, and because unions deliver larger wage gains for lower-wage jobs, where Black and Hispanic workers are disproportionately concentrated due to the pervasive effects of racism on labor market outcomes. Tripling union density would close one-third of today’s racial wage gaps.
If you add up the impact across the workforce, tripling union density would shift $1.2 trillion annually to working people and away from corporate elites — reversing one-third of the rise in inequality since 1979.
The benefits of achieving 30% union density extend far beyond wages. Since unions often win better benefits, including health insurance, tripling union membership would result in 25% fewer uninsured Americans.
By educating workers and boosting voter turnout, strong unions also protect democracy and give workers a voice in shaping the social and political fabric of their communities. States with high union density invest more in public education, deliver unemployment benefits to a far greater share of jobless workers, and have all expanded Medicaid.
The world our report imagines is not out of reach. Unions are more popular now than they’ve been in decades, especially among younger workers. And survey data show that 43% of nonunion workers would vote to unionize if they could — well above our goal of 30%.
Meeting this moment will require not just sustained organizing by workers and unions across the country, but also bold reforms to reverse decades of attacks on unions and collective bargaining. It’s high time lawmakers translate the public’s near-record support for unions into policy.
Policymakers have a clear roadmap to rebuilding union power. Congress can start by passing two existing bipartisan bills that would reform U.S. labor law and strengthen workers’ right to unionize: the Protecting the Right to Organize (PRO) Act and the Public Service Freedom to Negotiate Act.
Congress should also consider bold new ideas alongside the labor law reform bills already on the table. We offer a few such proposals in our report. One guarantees that newly unionized workers can get a first contract that includes a raise. Another proposal requires collective bargaining at any company where CEOs earn 100 times more than typical workers in their industry — allowing workers to negotiate a fairer share of company profits.
States have a role to play as well. By repealing anti-union “right-to-work” laws and ensuring collective bargaining rights for all public-sector workers and other workers not currently covered by federal labor law, states can take their own steps to grow union power.
Rebuilding union membership would raise wages, shrink racial wage gaps, expand health coverage, strengthen communities, and protect our democracy — all at the same time. There is no other policy lever that does all of that. It’s what workers want. And it’s entirely within our power to achieve.
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Heidi Shierholz is President at the Economic Policy Institute. From 2014 to 2017, she served the Obama administration as chief economist at the Department of Labor.
