Report finds unions help all workers

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September 2003

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Report finds unions help all workers
Unions have a substantial impact on the compensation and work lives of both unionized and non-unionized workers, according to a new report from the Economic Policy Institute. The study reviews current data on unions' effect on wages, fringe benefits, total compensation, pay inequality, and workplace protections.

Some of the conclusions are:

• Unions raise wages of unionized workers by roughly 20 percent and raise compensation, including both wages and benefits, by about 28 percent.

• Unions reduce wage inequality because they raise wages more for low- and middle-wage workers than for higher-wage workers, more for blue-collar than for white-collar workers, and more for workers who do not have a college degree.
• Strong unions set a pay standard that nonunion employers follow. For example, a high school graduate whose workplace is not unionized but whose industry is 25 percent unionized is paid 5 percent more than similar workers in less unionized industries.
• The impact of unions on total nonunion wages is almost as large as the impact on total union wages.
• The most sweeping advantage for unionized workers is in fringe benefits. Unionized workers are more likely than their nonunionized counterparts to receive paid leave, are approximately 18 percent to 28 percent more likely to have employer-provided health insurance, and are 23 percent to 54 percent more likely to be in employer-provided pension plans.
• Unionized workers receive more generous health benefits than nonunionized workers. They also pay 18 percent lower health care deductibles and a smaller share of the costs for family coverage. In retirement, unionized workers are 24 percent more likely to be covered by health insurance paid for by their employer.
• Unionized workers receive better pension plans. Not only are they more likely to have a guaranteed benefit in retirement, their employers contribute 28 percent more toward pensions.
• Unionized workers receive 26 percent more vacation time and 14 percent more total paid leave (vacations and holidays).

According to the study, unions play a pivotal role both in securing legislated labor protections and rights such as safety and health, overtime, and family/medical leave and in enforcing those rights on the job. Because unionized workers are more informed, they are more likely to benefit from social insurance programs such as unemployment insurance and workers compensation. Unions are thus an intermediary institution that provides a necessary complement to legislated benefits and protections.

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