The Union Advantage for Low-Wage Workers

A fantastic new paper from CEPR's John Schmitt on how unions boost the wages of low wage-workers:

Economic data have long demonstrated a substantial wage premium for unionized workers --on the order of 10 to 20 percent-- relative to non-union workers with similar characteristics. This paper uses a straightforward extension of standard statistical techniques to estimate the impact of unionization separately for workers at different wage levels, from the lowest to the highest paid workers.

Using national data for 2003 through 2007, we estimate that unionization raises the wages of the typical low-wage worker (one in the 10th percentile) by 20.6 percent, compared to 13.7 percent for the typical worker (one in the 50th percentile), and 6.1 percent for the typical high-wage worker (one in the 90th percentile). The traditional statistical approach applied to the same data produces an estimate of the average union wage premium of 11.9 percent, which is substantially lower than the union effect on low-wage workers (20.6 percent) and somewhat below the effect for the median- wage worker (13.7 percent).

Also worth noting, the report includes state-by-state data on union wage premium.