With Less Than 40% of Americans Earning a Living Wage, Are Unions...

With Less Than 40% of Americans Earning a Living Wage, Are Unions Still Relevant?


This week, members of the U.S. Senate, including Senators Sherrod Brown (D-OH), Cory Booker (D-NJ), and Mark Warner (D-VA), called upon the Senate Rules Committee Chairman Roy Blount (R-MO) to ensure that contractors of the U.S. Senate pay their workers a living wage and provide healthcare and other benefits.  According to the letter’s signatories, “President Obama’s Executive Order requires government contractors to pay employees $10.10 per hour.  Assuming a full-time schedule with no earned vacation or sick days, a worker could earn about $21,000 annually.  With the cost of living in the Washington DC metropolitan area among the highest in the United States, the Rules Committee should build on this minimum wage by requiring contractors doing business with the U.S. Senate to be model employers who treat their employees fairly.  People who work full time should be able to support themselves and their families.”

While there’s no settled figure for what constitute’s a living wage (the amount a person would have to earn to handle all of their basic needs) the national Housing Wage (the amount a person must earn to be able to afford a one or two-bedroom apartment rental) stands at $18.92. Assuming the national housing wage corresponds with a living wage, a full-time worker with no earned vacation or sick days would earn $39,353.60 a year. By this standard, fewer than 40% of Americans earn a living wage, as 63% of Americans earn less than $40,000.00 a year.

With so many people on the wrong side of the economic divide, some say that lower union participation contributes to that gap. According to the Bureau of Labor Statistics, 14.6 million people – or 11.1% of the American workforce – are members of labor unions, while 16.2 million workers have jobs that are covered by union contracts, even though they, themselves, may report no union affiliation. The highest wages are paid to union workers who have jobs in the mining, quarrying, and oil and gas extraction, telecommunications, utilities sectors, or by those offering professional and technical services or working for the federal government. But even with the backing of unions, many Americans are still just making the minimum wage. For instance, at UFCW, the United Food & Commercial Workers International Union, many workers still make $7.25 an hour. Subtract from that wage monthly membership dues, which typically range anywhere from $30-$60 a month, and union workers making the minimum wage have a smaller take home than those making the minimum wage who are not unionized.

Although income inequality is a growing subject of national discussion, Americans seem to be on the fence about the value of unions. A recent study by the Pew Research Center showed that not only were unions in a serious state of decline (membership peaked at 27% in 1953), nearly half (40%) of those polled said that the decline in unions was actually a good thing, while 52% said it was a bad thing.  Interestingly, people’s favorability views of unions are in synch with views toward corporations – 48% of Americans have a favorable view of unions and corporations.

Several factors are at play in determining the value of unions in today’s economy. For one thing, a small percentage of American workers are unionized, and even among those who are members, a living wage has not yet been obtained. Also, one of the benefits unions were previously thought to offer was the negotiation of healthcare and similar benefits, but with the Affordable Care Act in play, all Americans are entitled to affordable healthcare by law. At the same time, companies across the country are taking heed to cries for higher wages.  Take Walmart, for instance, which employs 1.4 million people in the U.S., where the average full–time hourly associate earns $13.00 per hour, and the average part time associate earns $10.00 per hour hour. The lowest wage Walmart pays anywhere in the country is $9.00 an hour, and associates are also eligible for quarterly bonuses based on the performance of their stores. Likewise at Costco, the average retail worker earns $20.00 an hour and 88% of the company’s 185,000 employees get healthcare benefits. Both companies outpace the national retail average of $11.93 per hour and the minimum wage, and they’re setting a trend among their competitors and other industries to raise wages responsive to workers needs.

There are many reasons for the income and wealth gaps facing this nation, and the solutions require an all-in approach from the public and private sectors. As we grapple with this issue, we’ve got to wonder about the role unions play in the battle for income equality. Will they modernize their tactics to become more relevant, stronger advocates for living wages, or will they continue to decline their way out of existence?