Unions Boost Economic Opportunity

A growing body of research shows that high inequality creates barriers to economic mobility, particularly for disadvantaged children.  Institutions that boost mobility and opportunity are thus particularly important in our era of large income disparities.  Unions are one such institution, a new study explains.

Harvard’s Richard Freeman (one of the nation’s leading authorities on workforce issues) and the other authors found that areas with higher union membership have greater economic mobility for low-income children.  In fact, the relationship between unions and mobility is as strong as the relationship between high school dropout rates and mobility.

High union membership may improve economic opportunity in several ways, the authors note.  Unions typically raise wages for unionized and nonunion workers alike and are associated with lower inequality.  Higher wages and lower inequality, in turn, can benefit entire families and enhance children’s economic prospects.  Unions also advocate for policies that help low- and middle-income people and therefore may enhance their and their children’s economic prospects.

Low-income children can expect greater economic opportunity in areas with higher union membership.  The researchers find this relationship even after controlling for variables like an area’s racial makeup, main industries, and housing values.  They also find that, in the aggregate, children in areas with higher union membership experience more income gains as adults.  The gains are even greater for children in union households.

Measures that bolster unions and strengthen collective bargaining rights thus should benefit children.  Protecting and strengthening the National Labor Relations Board (the federal agency that protects the rights of private-sector employees to improve their wages and working conditions) is one example.  Former Treasury Secretary Larry Summers’ recommendation to step up enforcement of laws designed to prevent union-busting is also important, as is his call for other new ideas to make it easier for workers to organize. 

Policymakers should also oppose so-called state “Right to Work” legislation and even more draconian proposals that would severely constrain workers’ ability to pursue their legal right to form unions if they so choose.

As Summers wrote, “we now know that stronger unions are not just good for their members, they are good for our country and our descendants.  Strengthening collective worker voice has to be an important component of any realistic American inclusive growth agenda.”