Unions and income

As Tim Noah’s Great Divergence makes clear, the sources of growing inequality are many, but the decline of labor unions is definitely a big part of the story.  At his talk this week he said if you weren’t willing to talk about the union issue, you weren’t really serious about addressing the growing inequality.

This has also been a major concern of Kevin Drum.  A couple days ago he published two very useful charts comparing us to Canada:

 

This is only one data point, and you can draw different conclusions depending on whether you look at pretax or post-tax income inequality. Still, it’s an instructive data point because the U.S. and Canadian economies are so closely bound together. In Canada, income inequality has gone up, just as it’s gone up in most English-speaking countries. That’s no surprise, largely because the Canadian economy really is similar to the U.S. economy, and subject to similar globalization pressures. But it hasn’t gone up as much, and part of the reason is probably unionization rates. Most research finds that the decline of unions has contributed to perhaps a third of the growth of income inequality in the United States, and comparisons like this confirm that. It’s not the whole story, not by a long way, but it’s a significant chunk of the story.

 

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About Steve Greene
Professor of Political Science at NC State http://faculty.chass.ncsu.edu/shgreene

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