12 ms·

The cumulative advantage of a unionized career for lifetime earnings

120 points by tareqak 4y ago

tareqak 4y ago
I found this article from the following tweet: NEW STUDY: Being in a union means a $1.3 million increase in lifetime earnings – larger than the average gains from getting a college degree. https://mobile.twitter.com/MorePerfectUS/status/1580209229398278144 https://mobile.twitter.com/MorePerfectUS/status/158020922939...
- deleted 4y ago
  [deleted]
pessimizer 4y ago
There's a difficulty with research like this (in the US at least, although the US also offers us interesting contrasts) in a) that something like 6.5% of workers are in unions, so they constitute an extreme minority, and b) that the unions that lasted the longest were probably the strongest, so the longer your union career was, the better your union probably was. There's also a problem with applying it to the future, because union jobs are largely in manufacturing (and government), and manufacturing once paid a premium that it doesn't anymore. Since 2006, the average non-management manufacturing job pays less than the average non-management job. https://www.turboimagehost.com/p/80306414/fredgraph.png.html https://www.turboimagehost.com/p/80306414/fredgraph.png.html All that being said, I am downloading and having a look.
- istjohn 4y ago
  Don't forget about construction.
- hotpotamus 4y ago
  If unions decreased lifetime earnings, do you think companies would fight them so vehemently?
  - pessimizer 4y ago
    Who said unions decreased lifetime earnings? edit: If you're trying to say that this study and the amount that union membership earns a worker is obviously correct without using any reference to the study, I disagree with that method of processing new information.
  - kevinventullo 4y ago
    If they decreased lifetime earnings but increased the cost to the company of each employee, the company still has an incentive to fight them.
  - VirusNewbie 4y ago
    Possibly. Do you think salary is the main motivation for companies? Do you think FAANG companies couldn't find 50k engineers in the US that would accept 50% pay? Of course they could, but they feel that they're getting more value by paying more.
    - diob 4y ago
      Do you remember when the top tech companies colluded to suppress wages? I do. Read up on it, they agreed to basically not compete for talent.
    - Spooky23 4y ago
      They are hiring employees they don’t need to take people off market.
  - londons_explore 4y ago
    Unions might decrease lifetime earnings, while also killing off the industry entirely... For example, classically union heavy industries like coal mining... And weaving...
    - hotpotamus 4y ago
      I don't see many ferriers or coopers these days either, but I doubt union membership had much to do with that. Interestingly, black lung cases have increased in the last decade https://www.cdc.gov/niosh/updates/upd-07-20-18.html https://www.cdc.gov/niosh/updates/upd-07-20-18.html I wonder if that correlates with union membership?
- pydry 4y ago
  There are other studies that show that union density positively correlates with pay within industries. There's also a weaker positive effect on non unionized pay on industries with a higher union density. That is, if your competitor is unionized your pay is probably higher than it would have been.
bryanlarsen 4y ago
I can't see behind the paywall, but how much of that is the pension? If one calculates how much money in retirement savings you need to replace a good pension, one will come up with a number very close to that of the $1.3M headline figure.
- SiempreViernes 4y ago
  Lifetime here means "until age of 65" (or whichever age after 58 is the last in the dataset for an individual), and the measure is earnings so before people get to spend it. Thus it's hard to see how any of it could be the pension.
  - ghaff 4y ago
    That was my reading as well. And, of course, there are also quite a few non-union legacy defined benefit pensions as they were pretty standard at big companies for a long time. As someone else commented, a lot of big unions aligned with well-paying blue collar jobs (as well as at least solidly paying public sector etc. work). I'm not sure that you can conclude those jobs were better paying because of unions or because you had relatively empowered organized groups of workers who formed unions.
    - Spooky23 4y ago
      Government is a great example of why unions make sense. Exempt employees working in legislative or executive roles make peanuts and work their asses off. They may not get raises and sometimes get schnookered out of pensions. Mainstream government workers make average/below average pay with premium benefits. In better states to work, your benefits are 40% of salary.
  - pessimizer 4y ago
    Depends on if it's total compensation or not. The money in your pension is "paid" to you when you're old, but it's ideally being released to you from a annuity that is already paid up. Business-friendly laws usually enable companies to keep these funds insolvent, and instead to maintain their retirees as creditors indefinitely, but that's not the model.
the_optimist 4y ago
The data is right censored, rendering the analysis pretty useless. Businesses that close (e.g. the entire US steel industry for a generation), are absent, and their employees sure didn’t enjoy that bump.
- VictorPath 4y ago
  Steel workers were unionized, and there are less US steel workers now. Textile workers in the Carolinas were not unionized, and there are a lot less Carolina textile workers now. The difference is Larry Page's grandfather was at a union job in Michigan in the 1930s and sent his son to college, and then his grandson started Google. Textile workers in the Carolinas got less education, and then the factories closed up.
  - ETH_start 4y ago
    There's no such thing as a free lunch. High union wages come at the price of spending inefficiency, which translates to less goods/services produced per dollar spent in the public sector, and industrial contraction in the private sector. Look at Detroit: it had the highest wages in the US in 1950. Over the 1950s and 60s, the UAW Union took over the Big Three automakers, with membership peaking in 1979. Around the same time, the US auto industry cratered, and today, Detroit is a shell of its former self and effectively a failed city.
    - theGnuMe 4y ago
      The collapse of Detroit was not due to unions.
  - mickdeek86 4y ago
    Well put. Reminds me of these guys: https://en.wikipedia.org/wiki/Brotherhood_of_Sleeping_Car_Porters https://en.wikipedia.org/wiki/Brotherhood_of_Sleeping_Car_Po...
- SiempreViernes 4y ago
  What are you talking about? The workers at those business don't disappear in a puff of smoke, they go on to work or not work somewhere else so if the end of the industry makes them spend the rest of their day unemployed that will of course impact their total earnings. At most they end up in the "didn't work that long in a union job" bucket, not sure where you get the idea that these peoples experience is _excluded_
dan-robertson 4y ago
I’m curious how the distribution looks. (I’m also curious about this in general but I haven’t tried very hard to find data on it and I’d guess it differs a lot depending on the type of work and industry norms). I don’t know if it’s in the study as I could only read the abstract. It also seems slightly difficult to reason about unions today from this data; I think unionised work from when the study started was somewhat different. But it would probably also be unfair of me to say that e.g. becoming a unionised coal miner (back when the study started) wouldn’t be great for lifetime earnings – becoming a non-unionised coal miner might be even worse!
- SiempreViernes 4y ago
  The data goes up to 2019, and while it is of course impossible to say now what the gain is for someone who works a unionized job for 40 years starting in 2010, they tried to see if there was some trend in the data for more recent cohorts: > Given strong declines in union membership, future cohorts may see smaller cumulative gains from union membership; in additional analyses, we find that this outcome is likely channeled through declines in union membership, rather than declines in the wage premium associated with union membership. Our findings suggest that the increasingly rare group of workers who are persistently unionized may nonetheless see similar gains as observed in this study.
kixiQu 4y ago
Can someone who has access say if they count healthcare and disability? Because WHOO that's a huge difference within the sectors where you see bifurcation
- SiempreViernes 4y ago
  This is purely measuring how much extra wage you get as a unionised worker, value from any other benefits is not included.
cat_plus_plus 4y ago
How about cumulative disadvantage to those who were willing to work for non-union wages but were banned from being hired?
- makeitdouble 4y ago
  You should expand on where you think increased wages are an issue for those who din’t get hired. People have a lot of difference thoughts about unions, it’s hard to know what random strangers on the internet have as a background and what they are referring to in so few words.
karaterobot 4y ago
It's very frustrating that there's no actual article to read, just an abstract. No SciHub access either. What kind of discussion are we expected to have here, other than questions about what the article would say if we could read it, or a referendum on whether we like labor unions or not?
metadat 4y ago
> the lifetime earnings gains are channeled entirely through higher hourly wages and occur despite earlier-than-average retirement for persistently unionized men. Odd phrasing, is the study only accounting for male subjects? I'm confused by this, because women and non-binary folk have been allowed in unions since women's liberation unfolded in the 1960s.
- boomboomsubban 4y ago
  I can't read the article either but the abstract says "using a sample of men."
  - klyrs 4y ago
    > saua says? (if you delete your response in the next hour I can do the same)
    - boomboomsubban 4y ago
      Yes, phone BS. I edited it now.
- bergenty 4y ago
  Non-binary is barely a thing now, why would you throw it in there with women?
- SiempreViernes 4y ago
  Yes: > We must, unfortunately, restrict our sample to men for both practical and substantive reasons. Most centrally, the large majority of female earners are categorized as “spouse” in the PSID, and spouse union membership only began to be collected consistently in 1979. We thus cannot measure union membership for approximately a quarter of the potential career span for women. > Furthermore, we run into multilayered selectivity issues for female employment and unionization in the cohort under study. In 1969, fewer than half of prime-aged women participated in the labor market. Many women in this cohort also faced significant normative pressure and discrimination following childbirth to remain at home, resulting in larger proportions of women in this cohort exiting the labor market (Goldin and Mitchell 2017). Labor unions in this period were male-dominated and had sexist practices of recruitment and upward advancement, particularly among the membership core and leadership structure (Lichenstein 2012). As a result, unionized women working in consistent, full-time employment were a select group overcoming a vast institutional system of gender discrimination, biasing comparisons that can be made across non-union and non-working women.
paulpauper 4y ago
Seems too good to be true They find, first, that unionization throughout one’s career is associated with a $1.3 million mean increase in lifetime earnings, larger than the average gains from completing college. Some of this data may be skewed by athlete pensions and salaries. Also, the college wage premium was much smaller 30+ years ago. If this study was redone but starting in 2020 instead of 1969, likely unions jobs would pay less.
- myself248 4y ago
  Student loans were also a lot smaller 30+ years ago. Joining a union doesn't require you to go $40,000 in debt to start making more money.
- SiempreViernes 4y ago
  If it was done starting in 2020 there would not even be two whole years of data, doesn't seem very useful. And the collage premium they give is for a lifetime ending in 2019, that's not very long ago.
ETH_start 4y ago
Unions are massively rent-seeking organizations, so this is no surprise at all. In California, public sector workers - who are all unionized - make twice as much as the private sector workers who pay their compensation: https://www.hoover.org/research/california-state-government-workers-earn-143000-twice-much-private-sector-workers https://www.hoover.org/research/california-state-government-...
- Bakary 4y ago
  Is it rent-seeking, or simply aggregating negotiating power? Why don't the private sector workers unionize themselves instead of attacking other workers? Why not focus on the capital owners who rake far, far, far, more and use some of those proceeds to fund think tanks such as the Hoover Institution as a hobby project?
  - ETH_start 4y ago
    It is rent seeking. In unrestricted negotiations, the company would be free to reject collective bargaining, and find workers who will work at market wages. When unions obtain wages above market wages, they are extracting economic rent. >>Why don't the private sector workers unionize themselves instead of attacking other workers? They did, and they destroyed the industries that are amenable to unionization. 50 years after the unions sucked the previous American industrial giants dry, Amazon, Starbucks and Tesla have emerged as new targets for private sector unions, and the unions will steadily take them over. But capital once stung, will be twice shy, and with every cycle, there will be fewer lucrative private sector jobs for unions to colonize.
    - woodruffw 4y ago
      And what, pray tell, happens when workers refuse to work at "market wages"[1]? There is no such thing as an "unrestricted negotiation"; only shuffling the restriction to disfavor workers rather than their bosses. We're a nation of free people, and that freedom includes our right to band together and compel better treatment (in the form of hours, conditions, and wages) from our employers. [1]: https://en.wikipedia.org/wiki/Homestead_strike https://en.wikipedia.org/wiki/Homestead_strike
dahfizz 4y ago
The emphasis on "persistent union membership" makes me skeptical. If they are excluding anyone who spent time unemployed, or switched industry (to one not unionized), that massively skews the data. The study could just as easily prove "people who don't have gaps in employment and become experts in their field are paid more". I do wish I could read the whole paper to see these details...
- SiempreViernes 4y ago
  They don't, 37% of the people without collage degrees are never unionised for example. They do in fact track how large fraction of the career is spent in a union job, there's none of these exclusions you've imagined for some reason. The emphasis on "persistent" comes from the fact that most of the total gains arise in the later parts of a career, so if you spend less than 49% of the career in a union there's not as much benefit at age 65 (if you lack a collage degree, if you have a degree it is on average better to not join a union).
BXLE_1-1-BitIs1 4y ago
Software developers dislike unions. A decade or two into their career, they get replaced by a kid out of school or have to train their H1B replacement. Wouldn't happen in a union shop.
- theGnuMe 4y ago
  Yep.

120 points by tareqak 4y ago

I found this article from the following tweet: NEW STUDY: Being in a union means a $1.3 million increase in lifetime earnings – larger than the average gains from getting a college degree. https://mobile.twitter.com/MorePerfectUS/status/1580209229398278144 https://mobile.twitter.com/MorePerfectUS/status/158020922939...

deleted 4y ago
[deleted]

pessimizer 4y ago

There's a difficulty with research like this (in the US at least, although the US also offers us interesting contrasts) in a) that something like 6.5% of workers are in unions, so they constitute an extreme minority, and b) that the unions that lasted the longest were probably the strongest, so the longer your union career was, the better your union probably was. There's also a problem with applying it to the future, because union jobs are largely in manufacturing (and government), and manufacturing once paid a premium that it doesn't anymore. Since 2006, the average non-management manufacturing job pays less than the average non-management job. https://www.turboimagehost.com/p/80306414/fredgraph.png.html https://www.turboimagehost.com/p/80306414/fredgraph.png.html All that being said, I am downloading and having a look.

istjohn 4y ago
Don't forget about construction.
hotpotamus 4y ago
If unions decreased lifetime earnings, do you think companies would fight them so vehemently?
- pessimizer 4y ago
  Who said unions decreased lifetime earnings? edit: If you're trying to say that this study and the amount that union membership earns a worker is obviously correct without using any reference to the study, I disagree with that method of processing new information.
- kevinventullo 4y ago
  If they decreased lifetime earnings but increased the cost to the company of each employee, the company still has an incentive to fight them.
- VirusNewbie 4y ago
  Possibly. Do you think salary is the main motivation for companies? Do you think FAANG companies couldn't find 50k engineers in the US that would accept 50% pay? Of course they could, but they feel that they're getting more value by paying more.
  - diob 4y ago
    Do you remember when the top tech companies colluded to suppress wages? I do. Read up on it, they agreed to basically not compete for talent.
  - Spooky23 4y ago
    They are hiring employees they don’t need to take people off market.
- londons_explore 4y ago
  Unions might decrease lifetime earnings, while also killing off the industry entirely... For example, classically union heavy industries like coal mining... And weaving...
  - hotpotamus 4y ago
    I don't see many ferriers or coopers these days either, but I doubt union membership had much to do with that. Interestingly, black lung cases have increased in the last decade https://www.cdc.gov/niosh/updates/upd-07-20-18.html https://www.cdc.gov/niosh/updates/upd-07-20-18.html I wonder if that correlates with union membership?
pydry 4y ago
There are other studies that show that union density positively correlates with pay within industries. There's also a weaker positive effect on non unionized pay on industries with a higher union density. That is, if your competitor is unionized your pay is probably higher than it would have been.

bryanlarsen 4y ago

I can't see behind the paywall, but how much of that is the pension? If one calculates how much money in retirement savings you need to replace a good pension, one will come up with a number very close to that of the $1.3M headline figure.

SiempreViernes 4y ago
Lifetime here means "until age of 65" (or whichever age after 58 is the last in the dataset for an individual), and the measure is earnings so before people get to spend it. Thus it's hard to see how any of it could be the pension.
- ghaff 4y ago
  That was my reading as well. And, of course, there are also quite a few non-union legacy defined benefit pensions as they were pretty standard at big companies for a long time. As someone else commented, a lot of big unions aligned with well-paying blue collar jobs (as well as at least solidly paying public sector etc. work). I'm not sure that you can conclude those jobs were better paying because of unions or because you had relatively empowered organized groups of workers who formed unions.
  - Spooky23 4y ago
    Government is a great example of why unions make sense. Exempt employees working in legislative or executive roles make peanuts and work their asses off. They may not get raises and sometimes get schnookered out of pensions. Mainstream government workers make average/below average pay with premium benefits. In better states to work, your benefits are 40% of salary.
- pessimizer 4y ago
  Depends on if it's total compensation or not. The money in your pension is "paid" to you when you're old, but it's ideally being released to you from a annuity that is already paid up. Business-friendly laws usually enable companies to keep these funds insolvent, and instead to maintain their retirees as creditors indefinitely, but that's not the model.

the_optimist 4y ago

The data is right censored, rendering the analysis pretty useless. Businesses that close (e.g. the entire US steel industry for a generation), are absent, and their employees sure didn’t enjoy that bump.

VictorPath 4y ago
Steel workers were unionized, and there are less US steel workers now. Textile workers in the Carolinas were not unionized, and there are a lot less Carolina textile workers now. The difference is Larry Page's grandfather was at a union job in Michigan in the 1930s and sent his son to college, and then his grandson started Google. Textile workers in the Carolinas got less education, and then the factories closed up.
- ETH_start 4y ago
  There's no such thing as a free lunch. High union wages come at the price of spending inefficiency, which translates to less goods/services produced per dollar spent in the public sector, and industrial contraction in the private sector. Look at Detroit: it had the highest wages in the US in 1950. Over the 1950s and 60s, the UAW Union took over the Big Three automakers, with membership peaking in 1979. Around the same time, the US auto industry cratered, and today, Detroit is a shell of its former self and effectively a failed city.
  - theGnuMe 4y ago
    The collapse of Detroit was not due to unions.
- mickdeek86 4y ago
  Well put. Reminds me of these guys: https://en.wikipedia.org/wiki/Brotherhood_of_Sleeping_Car_Porters https://en.wikipedia.org/wiki/Brotherhood_of_Sleeping_Car_Po...
SiempreViernes 4y ago
What are you talking about? The workers at those business don't disappear in a puff of smoke, they go on to work or not work somewhere else so if the end of the industry makes them spend the rest of their day unemployed that will of course impact their total earnings. At most they end up in the "didn't work that long in a union job" bucket, not sure where you get the idea that these peoples experience is _excluded_

dan-robertson 4y ago

I’m curious how the distribution looks. (I’m also curious about this in general but I haven’t tried very hard to find data on it and I’d guess it differs a lot depending on the type of work and industry norms). I don’t know if it’s in the study as I could only read the abstract. It also seems slightly difficult to reason about unions today from this data; I think unionised work from when the study started was somewhat different. But it would probably also be unfair of me to say that e.g. becoming a unionised coal miner (back when the study started) wouldn’t be great for lifetime earnings – becoming a non-unionised coal miner might be even worse!

SiempreViernes 4y ago
The data goes up to 2019, and while it is of course impossible to say now what the gain is for someone who works a unionized job for 40 years starting in 2010, they tried to see if there was some trend in the data for more recent cohorts: > Given strong declines in union membership, future cohorts may see smaller cumulative gains from union membership; in additional analyses, we find that this outcome is likely channeled through declines in union membership, rather than declines in the wage premium associated with union membership. Our findings suggest that the increasingly rare group of workers who are persistently unionized may nonetheless see similar gains as observed in this study.

kixiQu 4y ago

Can someone who has access say if they count healthcare and disability? Because WHOO that's a huge difference within the sectors where you see bifurcation

SiempreViernes 4y ago
This is purely measuring how much extra wage you get as a unionised worker, value from any other benefits is not included.

cat_plus_plus 4y ago

How about cumulative disadvantage to those who were willing to work for non-union wages but were banned from being hired?

makeitdouble 4y ago
You should expand on where you think increased wages are an issue for those who din’t get hired. People have a lot of difference thoughts about unions, it’s hard to know what random strangers on the internet have as a background and what they are referring to in so few words.

karaterobot 4y ago

It's very frustrating that there's no actual article to read, just an abstract. No SciHub access either. What kind of discussion are we expected to have here, other than questions about what the article would say if we could read it, or a referendum on whether we like labor unions or not?

metadat 4y ago

> the lifetime earnings gains are channeled entirely through higher hourly wages and occur despite earlier-than-average retirement for persistently unionized men. Odd phrasing, is the study only accounting for male subjects? I'm confused by this, because women and non-binary folk have been allowed in unions since women's liberation unfolded in the 1960s.

boomboomsubban 4y ago
I can't read the article either but the abstract says "using a sample of men."
- klyrs 4y ago
  > saua says? (if you delete your response in the next hour I can do the same)
  - boomboomsubban 4y ago
    Yes, phone BS. I edited it now.
bergenty 4y ago
Non-binary is barely a thing now, why would you throw it in there with women?
SiempreViernes 4y ago
Yes: > We must, unfortunately, restrict our sample to men for both practical and substantive reasons. Most centrally, the large majority of female earners are categorized as “spouse” in the PSID, and spouse union membership only began to be collected consistently in 1979. We thus cannot measure union membership for approximately a quarter of the potential career span for women. > Furthermore, we run into multilayered selectivity issues for female employment and unionization in the cohort under study. In 1969, fewer than half of prime-aged women participated in the labor market. Many women in this cohort also faced significant normative pressure and discrimination following childbirth to remain at home, resulting in larger proportions of women in this cohort exiting the labor market (Goldin and Mitchell 2017). Labor unions in this period were male-dominated and had sexist practices of recruitment and upward advancement, particularly among the membership core and leadership structure (Lichenstein 2012). As a result, unionized women working in consistent, full-time employment were a select group overcoming a vast institutional system of gender discrimination, biasing comparisons that can be made across non-union and non-working women.

paulpauper 4y ago

Seems too good to be true They find, first, that unionization throughout one’s career is associated with a $1.3 million mean increase in lifetime earnings, larger than the average gains from completing college. Some of this data may be skewed by athlete pensions and salaries. Also, the college wage premium was much smaller 30+ years ago. If this study was redone but starting in 2020 instead of 1969, likely unions jobs would pay less.

myself248 4y ago
Student loans were also a lot smaller 30+ years ago. Joining a union doesn't require you to go $40,000 in debt to start making more money.
SiempreViernes 4y ago
If it was done starting in 2020 there would not even be two whole years of data, doesn't seem very useful. And the collage premium they give is for a lifetime ending in 2019, that's not very long ago.

ETH_start 4y ago

Unions are massively rent-seeking organizations, so this is no surprise at all. In California, public sector workers - who are all unionized - make twice as much as the private sector workers who pay their compensation: https://www.hoover.org/research/california-state-government-workers-earn-143000-twice-much-private-sector-workers https://www.hoover.org/research/california-state-government-...

Bakary 4y ago
Is it rent-seeking, or simply aggregating negotiating power? Why don't the private sector workers unionize themselves instead of attacking other workers? Why not focus on the capital owners who rake far, far, far, more and use some of those proceeds to fund think tanks such as the Hoover Institution as a hobby project?
- ETH_start 4y ago
  It is rent seeking. In unrestricted negotiations, the company would be free to reject collective bargaining, and find workers who will work at market wages. When unions obtain wages above market wages, they are extracting economic rent. >>Why don't the private sector workers unionize themselves instead of attacking other workers? They did, and they destroyed the industries that are amenable to unionization. 50 years after the unions sucked the previous American industrial giants dry, Amazon, Starbucks and Tesla have emerged as new targets for private sector unions, and the unions will steadily take them over. But capital once stung, will be twice shy, and with every cycle, there will be fewer lucrative private sector jobs for unions to colonize.
  - woodruffw 4y ago
    And what, pray tell, happens when workers refuse to work at "market wages"[1]? There is no such thing as an "unrestricted negotiation"; only shuffling the restriction to disfavor workers rather than their bosses. We're a nation of free people, and that freedom includes our right to band together and compel better treatment (in the form of hours, conditions, and wages) from our employers. [1]: https://en.wikipedia.org/wiki/Homestead_strike https://en.wikipedia.org/wiki/Homestead_strike

dahfizz 4y ago

The emphasis on "persistent union membership" makes me skeptical. If they are excluding anyone who spent time unemployed, or switched industry (to one not unionized), that massively skews the data. The study could just as easily prove "people who don't have gaps in employment and become experts in their field are paid more". I do wish I could read the whole paper to see these details...

SiempreViernes 4y ago
They don't, 37% of the people without collage degrees are never unionised for example. They do in fact track how large fraction of the career is spent in a union job, there's none of these exclusions you've imagined for some reason. The emphasis on "persistent" comes from the fact that most of the total gains arise in the later parts of a career, so if you spend less than 49% of the career in a union there's not as much benefit at age 65 (if you lack a collage degree, if you have a degree it is on average better to not join a union).

BXLE_1-1-BitIs1 4y ago

Software developers dislike unions. A decade or two into their career, they get replaced by a kid out of school or have to train their H1B replacement. Wouldn't happen in a union shop.

theGnuMe 4y ago
Yep.