Unions are in the spotlight following the Supreme Court’s decision in Harris v Quinn that home healthcare workers are not "full-fledged" employees and therefore not required to pay agency fees. Jenn Borchetta has already written a legal analysis of the case, but it’s important to remember that unions are a key bulwark against rising inequality.
Unionization has already provided important benefits for home healthcare workers, who have seen their wages double since unionizing in 2003.
The decline in the power of unions has been linked in numerous empirical studies to rising inequality. David Jacobs finds that, “the role that union decline has played in growing income inequality may actually be larger than many of the favorite explanations offered by economists, such as the education gap in the United States.” The study finds that while the rise of finance has pulled incomes up at the top, the weakening of unions has allowed middle class wages to erode. Another study, by Jake Rosenfeld and Bruce Western, finds that, the decline of unions explains between one-third and one-fifth of the rise in inequality—equal to that of skill-biased technological change. Although skill-biased technological change (the rise of jobs that require higher education) is a popular explanation for the rise of inequality, it is such only because it makes political and institutional choices seem more impersonal.
Unions provide workers better wages and work to further their political interests. Workers who are covered a collective bargaining contract make 13.6 percent more than those who do not. Sadly, the number of workers covered by such agreements has slid from 26.7 percent of the workforce to 13.1 percent. I’ve noted numerous times, unions, distinct from corporations, advocate in the interests of most Americans, even those in the most affluent 90th percentile.
Because of this, political scientists Martin Gilens writes that, “unions would appear to be among the most promising interest group bases for strengthening the policy influence of America’s poor and middle class.” Given the fact that most Americans have little independent influence on policy outcomes, interest groups like unions may be the only way to forward their economic interests and preferences. As Gabriel Zucman and I discussed in an interview, inequality has been driven by policy choices, not economic inevitabilities.
As a result, busting unions will worsen inequality. The court decided to make a limited decision in Harris, which is good, but it plants a dangerous seed for a future blow to unions. If anything, we should be strengthening, not weakening, an institution so strongly aligned with the middle class.