EPI: The enormous impact of eroded collective bargaining on wages
Economic Policy Institute
A major factor depressing wage growth for middle earners and driving the growth of wage inequality over the last four decades has been the erosion of collective bargaining.1 Indeed, the only factor more responsible for weak wage growth for the typical worker is the excessive unemployment perpetrated by central bank policymakers’ high interest rate policies and fiscal austerity.2 The share of workers covered by a collective bargaining agreement fell from 27.0% in 1979 to just 11.6% in 2019 (Hirsch and Macpherson 2020). The erosion of collective bargaining has been especially harmful to men’s wages because men were far more likely than women to be unionized in 1979 (when 31.5% of men were covered by collective bargaining versus 18.8% of women). Thus men had more to lose from the subsequent attack on unions and collective bargaining.3 Rebuilding collective bargaining is a necessary component of any policy agenda to reestablish robust wage growth for the vast majority of workers in the United States, and broader unionization would lessen racial inequities and benefit women at least as much as men.