New CEPR and Inclusion Paper Examines the Effects of Unionization on Low- Wage Workers

Print
August 27, 2007

Unionization Key to Improving Jobs at the Bottom

For Immediate Release: August 27, 2007
Contact: Alan Barber 202-293-5380, x115.

Washington, DC: Unionization substantially raises wages and benefits even in typically low-wage occupations, according to "Unions and Upward Mobility for Low-Wage Workers", a report released today by the Center for Economic and Policy Research and Inclusion.

The report, which analyzed 15 of the lowest-paying occupations in the United States, found that unionized workers earned about 16 percent more than their non-union counterparts. Unionized workers in these same industries were also about 25 percentage points more likely to have health insurance or a pension plan.

For workers in these low-wage industries, unionization raised their wages, on average, about $1.75 per hour. In financial terms, the union effect on employer-provided health insurance and pensions was even larger.

"Our findings contradict the widespread belief that low-wage jobs are incapable of providing decent pay and benefits," said John Schmitt, a Senior Economist at the CEPR and one of the study's authors. "When workers have a voice at work, they can dramatically increase their wages and benefits, even in what are traditionally badly paying jobs."

The 15 low-wage occupations together employ just over 15 percent of all US workers and include cafeteria workers, child-care workers, cooks, housekeeping cleaners, home-care aides, janitors, ground maintenance workers, nurses aides and home-health aides, teachers assistants, and security guards.

"Given the prevalence of low-wage jobs without benefits in our labor market, and the likelihood that these sectors will grow rather than decline, some attention to this strategy of improving the U.S. labor market is critical to strengthening our economy and communities," according to Margy Waller, co-director of Inclusion and a co-author of the report.

###