CEPR - Center for Economic and Policy Research

Unionization Substantially Improves the Pay and Benefits of Younger Workers

October 16, 2008

Despite being better educated, young workers have fallen farther behind over the past 30 years

For Immediate Release: October 16, 2008
Contact: Alan Barber, 202-293-5380 x115

WASHINGTON, D.C. - In an election year that promises record numbers of young voters, a new report by the Center for Economic and Policy Research (CEPR) documents a large wage and benefit advantage for young workers in unions relative to their non-union counterparts. The report also finds that younger workers are earning about 10 percent less than their counterparts did in 1979, despite impressive gains in young workers' educational attainment over the same time period.

"Even though they've done everything right - finished high school and college at higher rates than in the past, young workers have been the hardest hit by stagnant and declining wages over the last 30 years" said John Schmitt, a Senior Economist at CEPR and the author of the study.

The report, "Unions and Upward Mobility for Young Workers," found that young unionized workers - those age 18 to 29 - earned, on average, 12.4 percent more than their non-union peers. In addition, young workers in unions were much more likely to have health insurance benefits and a pension plan.

The report, which analyzed data from the Census Bureau's Current Population Survey (CPS), found that unionization raises the pay of young workers by about $1.75 per hour. According to the report, young workers in unions were also 17 percentage points more likely to have employer-provided health insurance and 24 percentage points more likely to have an employer-provided pension plan than young workers who were not in unions.

"Unions make a big difference for younger workers," said Schmitt. "There is no economic theory that says young people have to be poorly paid or go without benefits."

According to the study, unionization also strongly benefited young workers in typically low-wage occupations. Among young workers in the 15 lowest-paying occupations, union members earned 10.2 percent more than those workers who were not in unions. In the same low-wage occupations, unionized young people were 27 percentage points more likely to have employer-provided health insurance and 26 percentage points more likely to have a pension plan than their non-union counterparts.
The full report can be found here.

Additional state-level information is available from the following:

Jessica Goodheart
Los Angeles Alliance for a New Economy (LAANE)
(323) 356-1081

Joe Edson
Progressive Leadership Alliance of Nevada, Reno Office
(775) 348-7557

New York
James Parrott
Fiscal Policy Institute

North Carolina
John Quinterno
NC Budget & Tax Center
(919) 856-3185

Amy Hanauer
Policy Matters Ohio
(216) 361-9801

Mark A. Price, Ph.D.
Keystone Research Center

Don Baylor
Center for Public Policy Priorities
(512) 320-0222 ext. 108

Allison Rowland, PhD
Voices for Utah Children
(801) 364-1182

West Virgina
Ted Boettner
West Virginia Center on Budget & Policy

Sarah Gorin
Equality State Policy Center