New studies show strong correlation between declining union density and rising income inequality

For every ten per cent increase in union membership, there would be a projected decline in income inequality between 2.5 and 3 percent.

Ottawa (15 July 2014) – Two recent studies from the United States and the United Kingdom have added to the growing body of empirical evidence that shows a strong correlation between declining union density and rising income inequality.

New research confirms weakening labour has major impact on income inequality

A new research paper prepared by acclaimed U.K. authors and social epidemiologists, Richard Wilkinson and Kate Pickett, shows how the weakening of the labour movement during the last quarter of the 20th century has had a significant impact on the ability of working people to influence their standard of living and quality of life.

Wilkinson and Pickett are co-authors of the award-winning book The Spirit Level that is  based on data assembled from thirty years of their research. The book detailed how societies of greater inequality are bad for everyone within them — the rich and middle class, as well as the poor. The authors' research clearly demonstrated how almost every modern social problem — poor health, violence, lack of community life, teen pregnancy, mental illness — is more likely to occur in societies of greater inequality.

In March 2013, Wilkinson was the keynote speaker at an international conference, "Labour Rights and Their Impact on Democracy, Economic Equality and Social Justice," organized by the Canadian Foundation for Labour Rights (CFLR), a national organization devoted to promoting labour rights. CFLR was established and is sponsored by the National Union of Public and General Employees (NUPGE).

Unions play important role in creating a more equal society

The research paper, entitled The importance of the labour movement in tackling inequality, was prepared for the U.K.-based Centre for Labour and Social Studies and was drawn from a more extensive report by the authors entitled, The World We Need, written for the International Labour Organization (ILO).

Drawing on a range of evidence, the research paper looked at the role of the labour movement in achieving a more equal society. It concluded that the decline in union density over the past three decades has been a major contributing factor to almost all the health and social problems that tend to be worse in societies with higher levels of inequality.

This paper argues that “we must now recreate a movement with the political and social influence that enabled the former labour movement to achieve the major reductions in inequality during the middle decades of the 20th century. A fairer and more sustainable future is possible.”

U.S. study echoes findings saying decline in union density creates more income inequality

Meanwhile, a study by Dr. David Jacobs, Professor of Sociology, and Lindsey Myers, a doctoral student in sociology, both from Ohio State University, has concluded that a major cause of growing income inequality in the United States has been “the politically induced decline in the strength of unions.”

Their research shows that the role that union decline has played in growing income inequality may actually be larger than many of the favourite explanations offered by economists, such as the education gap in the United States. “Among their contributions to income equality, unions reduce pay differences within companies and use their influence to lobby on behalf of the working and middle classes,” the researchers say.

The study, entitled Union Strength, Neoliberalism, and Inequality: Contingent Political Analyses of U.S. Income Differences Since 1950, appears online in the journal American Sociological Review, and is scheduled to appear in the August print edition.

Jacobs and Myers controlled for more than 20 other factors that economists and others connect to growing inequality, including:

  • changes in the percentage of manufacturing jobs and employees in service occupations
  • levels of international trade
  • a variety of demographic factors, including the percentage of female-headed households and the percentage of people under age 16 or over age 64
  • political factors such as the percentage of Republicans in Congress 
  • the growing education gap between the haves and have-nots.

Still, the decline in union strength remained the most important explanation for the increasing income gap. Their research models indicated that for every ten per cent increase in union membership, there would be a projected decline in income inequality between 2.5 and 3 per cent.

"[Labour unions] were the best and strongest lobbyists for poor, working-class and lower-middle-class groups both in fighting for more equal wages and in advocating for programs that assisted the poor," says Jacobs.

More information:

The importance of the labour movement in tackling inequality

The World We Need

Union Strength, Neoliberalism, and Inequality: Contingent Political Analyses of U.S. Income Differences Since 1950

NUPGE

The National Union of Public and General Employees (NUPGE) is one of Canada's largest labour organizations with over 340,000 members. Our mission is to improve the lives of working families and to build a stronger Canada by ensuring our common wealth is used for the common good. NUPGE

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