The Union Wage Advantage for Low-Wage Workers

[Earth Bound Misfit]

Source: Center for Economic and Policy Research

EXECUTIVE SUMMARY:

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 medianwage worker (13.7 percent).

Full Report: http://www.cepr.net/documents/publications/quantile_2008_05.pdf