This is the first Insight article Phil has written for INK in a while, and it’s a doozy.
I’m not burying the lead. Here’s the chart:
There is a pervasive myth about unions: union workers make more money. This myth is pushed in every organizing campaign. It is the key selling point in Shawn Fain’s “moon shot” to double the size of the UAW by organizing auto workers in the South.
The problem with this myth? It’s false. It’s especially false for manufacturing jobs, the ones Fain desperately needs to organize to save his failing union.
Every year, the Bureau of Labor Statistics publishes its survey of union membership. This year showed that, after two years of “historic” union organizing efforts, unions have managed to shrink their overall union density. In the private sector, union density remained flat at 6%.
Unions predictably blame employers for their inability to move the needle on growing their density. This ignores the fact that the full weight of the federal government, including the President himself, are doing all they can to promote unions.
Unions win nearly 80% of the elections they participate in. This doesn’t count the number of cases where employees don’t ever get a chance to vote because unions coerce companies into recognizing them without an election. After the NLRB’s recent Cemex decision, that win rate is likely to increase since that decision guarantees that even more unions will be imposed without an election.
Why aren’t unions more successful in manufacturing, which is historically the UAW’s bread and butter? The chart above explains a big reason why.
Over the last 15 years, the average non-union worker has made more money than the average union-represented worker. Over the last five years, the wage advantage non-union workers have over unionized ones has accelerated. While the gap shrank slightly this year (more on that below), the fact is clear: non-union manufacturing workers make a LOT more than unionized ones.
In 2023, non-union manufacturing workers made 15.7% MORE than their unionized counterparts. And these non-union workers didn’t have to pay dues. If you back out union dues (the typical UAW private sector member pays 2.5 hours per month, or about 1.5% of their monthly pay), the advantage grows to OVER 17%.
By the way, these numbers understate the advantage non-represented workers have over unionized ones. Why? Because represented workers are concentrated most heavily in larger cities on the East Coast, upper Midwest, and West Coast, where the cost of living is higher than the rest of the country. This means when you compare average wages, union wages get a boost simply because you’re looking at a smaller population (only 6% of the private sector workforce) living in these regions where all workers make more money.
If there is any silver lining, it’s that unions actually gained ground in 2023. That’s a function of bargaining cycles, and it’s not that great news for union members in the long term. One reason the gap between non-union and union workers widened in 2021 and 2022 was because the labor market massively shifted. This was due to the Great Resignation that occurred as we emerged from the pandemic.
One feature of union contracts is that they are rarely re-opened during the term of the agreement (although a lot of labor agreements were negotiated downward as companies entered the pandemic). This meant that non-union workers, whose companies have a lot more flexibility to adjust as conditions change, were able to quickly benefit as employers raised wages to compete for talent in an increasingly competitive and inflationary labor market. Unionized workers, on the other hand, were mostly stuck in place.
Over the last two years, as these agreements have reopened for new negotiations, unionized employers have needed to catch up to their non-unionized competitors in the labor market. While that accounts for the wage gap tightening in 2023, all it really means is that unionized workers are catching up to the increases that happened 2-3 years earlier for non-union workers. They won’t ever regain the wages they lost to non-union workers in those years, and they continue to fall behind even under these new contracts. Notice that although the non-union pay advantage shrank this year, average union wages still decreased over the gains from last year. Unionized workers are not catching up.
What about the “historic” agreement the UAW achieved last summer after striking Ford, General Motors, and Stellantis? That agreement still leaves UAW members 17% behind non-represented workers. Not only that but tens of thousands of UAW members were encouraged to strike and lost a substantial amount of pay while Fain was trying to make a name for himself as the next Walter Reuther.
It’s important to remember that the automakers were offering huge pay increases before the strikes. Based on most reports, the strike may have netted UAW workers an additional 5% more than what was on the table before they walked. They undoubtedly could have gotten that without a strike if Fain had spent more time bargaining and less time grandstanding.
The myth that unionized manufacturing employees make more than non-represented ones is just that, a myth. Southern auto workers should take a long, hard look at the chart above before they choose to jump onto the UAW’s sinking ship. They already receive pay and benefits packages that far outpace what the UAW has been able to bargain for its own members.
