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New EPI report emphasizes the importance of unionization

A new study link from the Economic Policy Institute, a Washington think tank, outlines the importance of unionization not only to the welfare of a union’s own members, but to the wages and equality of all workers.

The report, “How Today’s Unions Help Working People,” was released on Aug. 24 and offers a comprehensive view of the role of unions in the economy.

The EPI report delves heavily into the relationship between unionization and rising income inequality, one of the most important economic issues of our time. EPI estimates that one-third of the rise of income inequality among men and one-fifth among women is driven by a decline in unionization.

This increasing inequality can also be seen in the negative correlation between the level of union membership and the share of income going to the top 10 percent. A high rate of unionization puts pressure on non-union wages to increase and allows working people to have a more equitable share of the economy. However, starting in the 1970s, the share of income going to the top 10 percent of wage earners started to rapidly increase to the chasm it is today. It is not an accident that this coincides with the start of a long class war against working people that continues to this day.

Union membership and share of income going to the top 10%, 1917-2015

The EPI report also highlights the relationship between unionization and the middle class’ share of the economy. As the below graph shows, high levels of unionization after World War II led to increased income going to the middle 60 percent of wage earners. As unionization declined, so too did the share of income going to the middle class.

Union membership rate and share of income going to the middle 60% of families, 1917-2013

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