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The Path Back to Equality Leads Through Unions

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  • The Nation summarizes an important new finding: Americans of the mid-twentieth century had unions to thank for their booming, egalitarian economy.
  • Related: New Study Confirms That American Workers Are Getting Ripped Off.

Nathan Pippenger, Democracy


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June 1, 2018 | rom the end of World War II until about 1980, the United States was in the fortunate position of benefiting from two simultaneous trends: The economy prospered as wages became more equal (an era known as the “Great Compression”). There’s still some debate among economists about exactly why this happened, an argument with obvious relevance to our own era of deep inequality. But according to a new study highlighted by Mike Konczal in The Nation, the role of one factor is now undeniable: unions. Summarizing the new research, Konczal writes that “the growth of union membership—to a height of nearly 30 percent in 1955, before falling to its current low of 10.7 percent—explains the Great Compression every bit as much as theories about education or any other single factor.”

  http://evergreenedigest.org/sites/default/files/Labor%20Getting%20Its%20Fair%20Share%20of%20the%20Pie_0.jpgKonczal knocks the economics profession for “casually dismissing the role of unions” and gently ribs the idea that anybody would be surprised by “the statement ‘unions help workers.’” But as he acknowledges, detailed data on union membership was unavailable until recently—and moreover, there’s at least the possibility that unions could actually increase overall inequality, by widening the wage gap between their members and non-unionized workers. As Timothy Noah noted in his book The Great Divergence, this was actually what most economists believed until the 1980s. Konczal doesn’t precisely comment on the older idea that unions might actually exacerbate inequality, but he does refer to the theory that “since unions merely transfer wealth among workers, they wouldn’t lower inequality overall and might even slow economic growth.” It turns out that idea is probably mistaken as well. In fact, the results seem to effectively counter all the familiar theories about the possible negative effects of unionization on either income equality or economic growth—all while demonstrating that unions were more diverse, in terms of both skill and racial composition, than is widely believed.

Nathan Pippenger is a contributing editor at Democracy.

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Related:

New Study Confirms That American Workers Are Getting Ripped Off. Eric Levitz, New York Magazine

http://evergreenedigest.org/sites/default/files/McDonald%27s%20Employees%20Fight%20for%20Higher%20Wages.jpgWhy we fight. Photo: Scott Olson/Getty Images

(Trump's) right to claim that Americans are getting the short end. But the primary cause of that fact isn’t bad trade agreements or “job killing” regulations — its the union-busting laws and court rulings that the president has done so much to abet.
 

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