Oct 06, 2015 - 10:15am

Myths Behind the White House Worker Voice Summit


Former Senior Vice President, Labor, Immigration, and Employee Benefits

Senior Vice President, Employment Policy Division

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Photo credit: Joshua Roberts/Bloomberg

The White House will host a summit Wednesday dedicated to what it calls “worker voice.” This term could mean many things to different people, but to the administration it means unions. The summit, it seems, will be largely devoted to proclaiming the value of unions and convincing workers that rebuilding the power of organized labor is the key to restoring the middle class, increasing wages, and reversing income inequality. However, the evidence to support this thesis is patchy at best.

There are a few talking points one can expect to hear at the summit. The first is that workers’ compensation has failed to keep up with productivity, and that this trend moves in correlation with the strength of union membership. This has been a favorite theme of the current secretary of Labor. 

It is, however, incorrect. In fact, when one uses the proper data from the U.S. Bureau of Labor Statistics (BLS) and the correct inflation adjustment, worker compensation and productivity rise almost in tandem (below).  The secretary’s argument only works when comparing incompatible data — essentially apples to oranges.

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Source: American Action Forum

Lately there has been a small gap between productivity and compensation, a gap that has grown a bit larger since the start of the current administration. Readers can draw their own conclusions as to why that has occurred.

A second likely point of emphasis is the claim that unions reduce income inequality.  In the words of Labor Secretary Thomas Perez:

As union density increased in the middle of the 20th century, the share of income going to the wealthiest 10 percent declined and prosperity was broadly shared. But as union membership has steadily fallen in recent decades, the share of income going to the top 10 percent has steadily climbed.    

Correlations exist between many variables. But that does not mean causation. Such spurious reasoning would support the obviously incorrect claims that the drop in union membership was responsible for the increased presence of women in the workforce, or that the timing of an individual’s purchase of particular shares was responsible for the decline in the stock market. Far more likely causes of the drop in union membership were significant changes in both the domestic and international economy as the world recovered from World War II, as well as dramatic developments in technology. The bottom line: Two things occurring at the same time is not evidence that one caused the other.

A third favorite talking point is that, on average, union members earn roughly $200 per week more than non-union members.  Hence, the thinking goes, if we want higher wages for workers, just make them all union members. In the words of the secretary, being in a union allows workers to “punch their ticket to the middle class.” However, the BLS data upon which the secretary relies are not so crystal clear. While the annual union membership release by BLS does indeed show union members with higher earnings on average, it includes this important caveat, which the secretary neglected to mention: 

In addition to coverage by a collective bargaining agreement, this earnings difference reflects a variety of influences, including variations in the distributions of union members and nonunion employees by occupation, industry, age, firm size, or geographic region.  (emphasis added)  (U.S. Bureau of Labor Statistics, Union Members—2014, January 23, 2015, p. 2)

To put that in simple terms, union membership could be a reason why workers earn more, but it also may be because of things like where workers live (high cost vs. low cost states), what types of work they actually do (e.g. manufacturing vs. services), and how old they are (older workers earn more than younger workers and the majority of union members are above the age of 45).  In fact, in a number of the occupations examined by BLS, the difference is fairly small, and in some fields (computer and mathematical occupations, wholesale trade, telecommunications, finance, professional and technical services, and federal employment), non-union workers earn more.

One couldn’t have a summit without calls for new legislation, in this case laws to make it easier for workers to join unions. In previous years, that meant the failed Card Check bill, which had as its primary feature undermining secret ballot elections — hardly a pro-worker policy.  Now, it seems, the focus is simply on hammering employers with the threat of massive new penalties and litigation, which are included in the misnamed “Workplace Action for a Growing Economy Act.” Left out of the discussion on Wednesday, however, will be laws that would allow for a secret ballot vote when workers decide whether or not to go on strike, that would hold union executives liable for malfeasance within their unions, or expand the ability of workers to opt out of union political activity with which they disagree.

None of this is to suggest that workers shouldn’t have the right to join unions. They should, and under the National Labor Relations Act, they do. Of course fewer and fewer workers seem to be choosing this option. Despite six years of pro-union regulations coming from the administration, union membership is now just 11.1 percent of the workforce.

That suggests part of the reason for the entire summit is not so much to give workers a “voice” but rather to tell them how the White House wants them to use it.

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About the Authors

About the Author

Former Senior Vice President, Labor, Immigration, and Employee Benefits

Johnson is the former Senior Vice President, Labor, Immigration, and Employee Benefits.

About the Author

Glenn Spencer Headshot
Senior Vice President, Employment Policy Division

Glenn Spencer is senior vice president of the Employment Policy division at the U.S. Chamber of Commerce.