Editor’s note: The following article has been adapted from a press release from the United States Treasury Department.
The Treasury Department recently issued its most comprehensive report to date focused on the role labor unions play in the American economy – and the findings strongly demonstrate how unions benefit not just rank-and-file members but the nation as a whole.
The Department’s Office of Economic Policy released this first-of-its-kind report on Aug. 28, as one of more than 70 actions implemented by the White House Task Force on Worker Organizing and Empowerment.
The Task Force’s goal is to reduce barriers to worker organizing and demonstrate its commitment to worker rights, including the right to a free and fair choice to join a union and to preserving a worker’s right to dignity in the workplace.
Key findings of the new report include:
• Middle-class workers reap substantial benefits from unionization. Unions raise the wages of their members by 10 to 15 percent compared to unrepresented workers. Unions also improve fringe benefits and workplace procedures such as retirement plans, grievance policies, and predictable scheduling. These workplace improvements contribute substantially to middle-class financial stability and worker well-being. For example, one study has estimated that the average worker values their ability to avoid short-notice schedule changes at up to 20 percent of their wages.
• Unionization also has spillover effects that extend well beyond union workers. Competition means workers at nonunionized firms see increased wages too. Heightened workplace safety norms can raise standards for entire industries. Union members improve their communities through heightened civic engagement; they are more likely to vote, donate to charity, and participate in a neighborhood project. And, the higher pay and job security of both union and nonunion middle-class workers can further positively spill over to their families and communities through more stable housing, more investment in education, and other channels.
• Unions help create a fairer economy by benefiting all demographic groups. By encouraging egalitarian wage practices, unions serve to reduce race and gender wage gaps. And modern unions have broad representation across race and gender. In 2021, Black men had a particularly high union representation rate at 13 percent, as compared to the population average of 10 percent. The diverse demographics of modern union membership mean that the benefits of any policy that strengthens today’s unions would be felt across the population.
• Finally, in addition to supporting the middle class, unions contribute to economic growth and resilience. They do so in part simply by reducing overall inequality. Income inequality often feeds back into inequality of opportunity, the Treasury Department reported, which impedes growth if disadvantaged people cannot access the resources necessary to acquire job skills or start businesses. And unions can boost businesses’ productivity by improving working environments and by giving experienced workers more of an input into decisions that design better and more cost-effective workplace procedures.
As the labor movement strengthens and public opinion of unions has reached its highest level since 1965, the Biden-Harris Administration has taken many measures to promote unions and acknowledges the importance of labor unions to reestablishing and strengthening America’s middle class, the Treasury Department reported. Actions taken by the current administration include:
• Prioritizing the passage of the Protecting the Right to Organize (PRO) Act and the Public Sector Freedom to Negotiate Act.
• Appointing a General Counsel and Board Members to the National Labor Relations Board (NLRB) committed to protecting the right of workers to organize in the workplace.
• Increasing the funding of the NLRB to enable them to expand enforcement activities.
• Creating the White House Task Force on Worker Organizing and Empowerment, which, under the leadership of Vice President Harris, works with agencies on ways to use their existing statutory authority to support worker organizing and bargaining.
• Signing Executive Order 14063, which requires the use of project labor agreements on federal construction projects of $35 million or more.
• Signing Executive Order 14003 to promote the rights of federal employees to collectively bargain.
• Launching the Good Jobs Initiative to ensure the provision of critical information to workers, employers, and government – including about the union advantage – as they work to improve job quality and create access to good jobs free from discrimination and harassment for all working people.
• Promoting “know your rights” initiatives to provide workers with better information about their organizing and bargaining rights.
• Announcing a new rule to raise wage standards of construction workers by updating prevailing wage regulations issued under the Davis-Bacon and related acts, which require payment of locally prevailing wages and fringe benefits to more than one million construction workers.
• Requiring employers to pay prevailing wages and abide by apprenticeship requirements to claim the full value of many clean energy tax incentives in the Inflation Reduction Act, as part of the Treasury Department’s implementation of the law.