Wage inequality has ballooned in the last 40 years, thanks in large part to the declining power of unions, according to a study published this month in the American Sociological Review, and reported by The New York Times.
Between the years 1973 and 2007, the study found that wage inequality rose 40 percent. In this same period, private sector union membership plummeted 34 to 8 percent among men and 16 to 6 percent among women. These drops explain one third of the increase of wage inequality among male workers and one fifth of the increased inequality among their female counterparts, the study concludes.
Climbing income inequality is usually blamed on technological changes, immigration, outsourcing, and the relative increase in wages for college graduates. The studies two authors found, however, indicate that waning union power is just as significant as any of these factors.
Private sector union membership is now lower than it was in 1935, when the Wagner Act, which protects workers' right to organize, came into force. Unions swelled after World War II, but since the early 1970s, Big Labor has been steadily and relentlessly shrinking.
This has reduced the political power of all workers, according to the study. Unions have long advocated for more equalized wages for labor, by opposing, for example, the radical deregulation of financial markets and the explosion of executive pay. "Union decline marks an erosion of the moral economy and its underlying distributional norms," the study claims. "Wage inequality in the nonunion sector increased as a result.
These findings support past research, which has shown that countries with strong unions, like Canada and Germany, have a flatter economic playing field.
The declining power of private sector unions has also produced another kind of wage inequality: between public and private sector workers. 36.2 percent of government workers are unionized, and thus have greater political clout on average than private employees.
As Wisconsin Governor Scott Walker likes to say, unions are the "haves" and the largely private-sector employed taxpayers are the "have-nots." But as this study tells us, organized Labor has been critical in battling the other war of "haves" and "have nots": corporate and Wall Street interests versus the average worker.
It is these tensions that came to a head in Wisconsin's recall elections Tuesday. Of the four Republican state senate seats up for grabs, pro-union Democrats managed to wrest only two away. Republicans have successfully kept control of the senate, and are calling it a big win. But if Wisconsin is a microcosm of the country on this issue, Americans are split almost perfectly down the middle, divided on which "have not" to defend.
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