Sep 25, 2015 - 10:30am

The Decline in Union Membership Has Not Caused Middle Class Wage Stagnation


Senior Editor, Digital Content

A big part of public policy debates involves countering misleading claims. In this regular feature, I highlight important facts about the key issues being debated around Washington, D.C.

Claim: Decline in union membership has caused middle class wage stagnation.

What you need to know: Many pundits, politicians, and policymakers have embraced this idea. AFL-CIO President Richard Trumka typifies this thinking when he writes, “Over the last 40 years, as union membership has declined, so has the share of middle class income.”

This belief also resonates in the Obama administration. Labor Secretary Tom Perez cites data from the Bureau of Labor Statistics (BLS) that union households have higher wages than nonunion households.

While these claims imply that being a member of a union will lead to higher wages, the data do not support it. BLS notes that comparisons between union and nonunion wages are “on a broad level and do not control for many factors that can be important in explaining earnings differences. … 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.” In short, gross comparisons of data prove nothing. 

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Labor union membership in the U.S.: 1973-2014.
Labor union membership in the U.S.: 1973-2014. Source: Wall Street Journal.
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About the Author

About the Author

Sean Hackbarth
Senior Editor, Digital Content

Sean writes about public policies affecting businesses including energy, health care, and regulations. When not battling those making it harder for free enterprise to succeed, he raves about all things Wisconsin (his home state) and religiously follows the Green Bay Packers.