Importance of Unions in the Spotlight as New Census Data Tracks Middle Class Decline

The rich are getting richer and the middle class is getting poorer, according to new figures released by the U.S. Census Bureau last week. One of the leading causes for the growing gap is the decline of labor unions. By bolstering our unions and the power of collective bargaining, however, we can help reverse the trend, say experts.

The average income for the top 5 percent of households increased by five percent in 2011 to $311,444, according to the Census figures, while the median household income fell to $50,054. Since 1979, the top five percent of households have increased their share of the nation’s income from 16.9 percent to 22.3 percent.

At the same time, the decline in the unionization rate is practically in lockstep with the decline in the share of income going to the middle class. The overall unionization rate in 2011 was 11.8 percent, down from 12.3 percent in 2009 and 20.1 percent in 1983, when there were 17.7 million union members. The peak unionization rate was 35 percent during the mid-1950s, after a surge in unionization during the Great Depression and after World War II.

It’s no coincidence that unions and the middle class are weakening at the same time, says John Russo, Coordinator of the Labor Studies Program at the Warren P. Williamson College of Business Administration at Youngstown State University in Ohio.

“What’s at work here is the principle of wage pull – unions pull up the wages of the entire middle class,” he says. “If their wages decline, non-union private sector wages also decline, and so does the standard of living for the majority of the country.”

Yet many right-wing politicians would have Americans believe that unions are actually the cause of middle class struggles, and some members of the public seem to be convinced.

New Jersey Governor Chris Christie, who was the keynote speaker at the Republican National Committee, has attacked public sector unions and called teachers unions political thugs because they tried to protect hardworking educators and struggling schools from his devastating budget cuts.

By going after public sector unions, Christie seeks to divide and conquer, and his strategy has worked in the short-term, as he told The Atlantic Monthly.

“There’s a split in the union movement, between the private sector and the public sector,” he said. “The private sector is where they’re having huge unemployment. You think they want to pay higher property taxes and bloated benefits for their public-sector union brothers who don’t want to make any sacrifices?”

In New Jersey and other hard hit parts of the country, public sector unions are slightly better off than those in the private sector — in 2011, among full-time wage and salary workers, union members had median usual weekly earnings of $938, while those who were not union members had median weekly earnings of $729.

When many non-union workers see that slight gap, they demand to know why union workers make more than they do.

“It’s the politics of resentment,” says Youngstown’s Russo. “Historically, public sector union employees have had lower wages but more job security, which isn’t critiqued when you have a bustling private sector.”

But if politicians continue to demonize and destabilize unions, our economy will only worsen, warns Russo.

“We’d go back to the days that led to the Great Depression, when we drove down labor costs to the point that there was little to no demand in the market place, which devastated the economy,” he says. “We’re already starting to see that happen now.”

Last year the middle class received the smallest share of the nation’s income since these data were first reported, according to U.S. Census Bureau numbers.

Unions are crucial to reversing this trend, bolstering the middle class and the economy, and improving public schools.

First, there’s the concept of wage pull that Russo explained: unions not only helps increase wages and benefits for union members but also can set a standard for other employers to follow.

Unions are also champions of economic programs that create a strong, robust, and expanding middle class, according to the Center for American Progress. Unions pushed for and have defended Social Security, the minimum wage, and more recently the Jobs Bill and the Affordable Care Act.

What’s more, researchers from the Center for American Progress found that a 10 percentage point increase in union membership would translate into an extra $1,479 per year for the average middle-class household, whether or not that household includes union members—about the same effect as boosting college graduation rates by the same margin.

In education, unions allow educators to collectively bargain for better conditions for teaching and learning, competitive salaries and secure retirement benefits. When these conditions are in place, it attracts more people to the profession, increasing the talent pool and providing better educators for our children.

“It’s simple. You get what you pay for,” says Russo. “If we keep lowering the wages for teachers, we lose quality, we lose efficiency, and our schools suffer.”