CapitalismInequalityPoliticsThe Main DriftWorkers

Inequality and Unions

Ever wonder why income inequality in the U.S. is so extreme?

This graphic examines the relationship between the share of income that goes to the top 10% and the portion of workers who belong to unions. Note how the rich take a larger portion of all income when unionization rates are low, and take a smaller share when union membership is high. It’s no coincidence that today, when inequality and the incomes of those at the top are at all-time highs, union membership is at historic lows.

It’s not the entire story, but it does provide insight into a key source of our growing inequality.  And it also points to a realistic strategy to reverse the trend, one that doesn’t require politicians to fix it for us.  If more workers (even those with college degrees and white collar jobs) formed unions, it would go a long way to making our society more equitable.

2 thoughts on “Inequality and Unions

  1. There are a lot of things that have happened in recent decades that have brought about the current situation that makes this comparison seem much too simplistic.

    Union membership was driven by American industry, such as the auto industry, which has largely left the US since the 1980s. The many reasons for leaving include the excessive demands of labor unions that made these companies not competitive in the worldwide market. By excessive, I mean high salaries for low skilled jobs and high-cost employee benefits, such as what we would now refer to as platinum health insurance. American labor is not competitive with foreign labor, so people lose jobs.

    Secondly, since the 1960s, the nation has become more and more addicted to using debt to make purchases. The interest on that debt can only move upward. Those using said debt become increasingly burdened by having to make monthly payments on that debt and find little cash available for doing other things they may want to do. Thus, they take on more debt. It is a cycle that makes it hard for people to advance financially.

  2. This is all true to one extent or another, but it ignores a few things. One important one is right-to-work laws. By allowing freeloaders, unions lose dues revenue even though the union negotiated the better pay rates (and benefits) that the freeloaders enjoy. Another is the seeming dispositional dislike of membership in any kind of union arrangement. I don’t recall the state – Kentucky, Tennessee – but Volkswagen sought to establish an employee council at their plant. This wasn’t even a body to negotiate pay, etc, only to have a voice in workplace decisions, but employees didn’t want it. I guess you could call that a case of the workers drinking a certain Kool-Aid, and that’s a tough thing to overcome.

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