I'll research the evidence on how unions affect workers and the economy.
Labor unions have both benefits and costs, and research finds the effects differ for individual workers versus the broader economy.
For Workers: Generally Positive
Most empirical research finds a union wage premium:
•Unions raise the wages of their members by 10 to 15 percent. More detailed estimates find the causal premium is around 10 to 15 percent, with larger effects for longer-tenured workers.
•Simple comparisons find union workers make about 20 percent more than nonunion workers, with the Bureau of Labor Statistics figures showing weekly earnings for unionized workers are 16% higher on average for comparable jobs. The Joint Economic Committee found unionized workers earn 10.2% more than their non-union peers.
•Unions also improve fringe benefits and workplace procedures such as retirement plans, workplace grievance policies, and predictable scheduling. For example, studies have found unions have had a large hand in improving work environments on many dimensions.
Benefits also spill over beyond members and reduce inequality:
•Competition means workers at nonunionized firms see increased wages too. Heightened workplace safety norms can pull up whole industries. Each 1 percentage point increase in private-sector union membership rates translates to about a 0.3 percent increase in nonunion wages.
•By encouraging egalitarian wage practices, unions serve to reduce race and gender wage gaps. For example unionization increases wages by 17.3% for Black workers and 23.1% for Latino workers, and reduced the wage gap between Black and white women.
•Union members also show higher civic engagement: they vote 12 percentage points more often than nonunion members and are more likely to donate to charity, attend community meetings and volunteer.
For the Economy: Mixed Evidence
Arguments that unions help the economy:
•A first-of-its-kind report by the U.S. Department of the Treasury found unions contribute to economic growth and resilience by reducing overall inequality. Income inequality often feeds back into inequality of opportunity, which impedes growth if disadvantaged people cannot access the resources necessary to acquire job skills or start businesses.
•Increased financial stability to those in the middle or bottom of the income distribution could alleviate borrowing constraints, allowing workers to start businesses, build human capital, and exploit investment opportunities.
•Unions can have a positive effect on productivity through employee engagement and union voice effects, providing a road map for the type of union campaigns that could lead to additional growth. One synthesis concludes unions do not, overall, reduce productivity, though it varies according to specific circumstances.
•Comparative studies are cited as finding high rates of unionization lead to greater income equality, lower unemployment and inflation, higher productivity.
Arguments that unions hurt the economy:
Critics and some economic studies point to costs:
•Critics argue unionism causes unemployment, labor shortages, promotes inflation, higher prices, less productivity, and leads to fewer goods and services.
•Opponents argue labor organizations raise wages above the rate set by a free market, making companies less flexible and ultimately hurting workers, and where unions negotiate wages above the market rate, those employers will hire fewer workers.
•Unions operate as legal labor cartels. They try to control the supply of labor in an industry so they can drive up its price — wages. Union members benefit, but those costs get passed on as higher prices.
•Lower profitability among unionized firms is well established.
•Some econometric studies find unions adversely affect unemployment rates and the growth rates of gross state product (GSP), productivity, and population, while increasing the rate of wage inflation.
Other research finds unions can have increased labor costs, reduced flexibility, and potential strikes and disruption, and can lower the hours employers demand and create walkouts or strikes that shut down production.
Bottom Line
•For workers who are members, unions are consistently associated with higher pay, better benefits, greater job security, safer conditions and narrower demographic pay gaps.
•For the economy as a whole, the effect depends on balance: by reducing inequality, supporting consumer demand (which drives 70% of the U.S. economy) and improving stability, unions can promote growth and resilience. At the same time, if wage premiums are not matched by productivity gains, they can raise labor costs, reduce profits, increase prices, and potentially reduce employment or investment in unionized firms and industries.
Most modern assessments, including the Treasury's 2023 report, conclude that while unions are not the only solution to structural trends, they can be useful in building the economy from the middle out, but the net economic impact varies by industry, bargaining structure, and how cooperatively labor and management work together.