Unions, Bargaining Power, and Income Inequality
Yesterday the Bureau of Labor Statistics released their annual data on labor force unionization. It did not catch any headlines because it was not surprising. Union membership rates continued to decline in 2014 to 11.1% of the workforce. To many Americans, unions seem like relics. The labor union has become a fringe institution. But for the last few years, I have thought a lot about the connection between the decline of labor unions and the rise of income inequality in the United States. Income inequality has become a hot button issue this decade, but few are making the explicit connection between the declining bargaining power of labor and the widening gap between rich and poor. On November 4 th 2014 Eduard Porto had a piece in the NY Times on how best to mitigate the growing income inequality in the United States. Porto’s thesis is essentially that direct redistribution of wealth has not effectively created a more egalitarian society and different, alternative methods n...