Third and State

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Crush Unions and You Crush the Growth in Earnings for Workers

January 7, 2015 - 2:26pm

New analysis by David Cooper and Lawrence Mishel explores differences by state in wage trends and changes in union membership since 1979.

In that time the percentage of workers covered by a union contract fell 21 percentage points (from 35.6% in 1979 to 14.6% in 2012) in Pennsylvania.

Wages (real hourly compensation (wages plus benefits) to be precise) also grew the least in Pennsylvania and other states that experienced the largest declines in workers covered by a union contract. As the chart below shows, each 10-percentage-point fall in the share of workers covered by a union contract is associated with 12.6 percent lower hourly compensation growth since 1979.

This suggests one interpretation of why wealthy right-wing donors (many from outisde Pennsylvania) have funded the Commonwealth Foundation's legislative agenda, which includes so-called "right to work" laws and  “paycheck protection" proposals: Making it harder for workers to exercise the fundamental freedoms to associate, organize and bargain colletively ensures that a smaller and smaller share of productivity growth shows up in the paychecks of workers.  

Of course, as many enlightened employers know, suppressing workers' rights isn't in the self-interest of business in the long run -- because it tends to reduce the rate of innovation and productivity growth. So, in fighting to tilt the playing field even more towards employers, right-wing donors are cutting off their nose to spite their face.