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WASHINGTON, DC – A new report released today by the Center for American Progress Action Fund (CAPAF) shows that a modest increase in unionization rates would help restore the broken link between productivity and wage gains, pumping tens of billions of dollars into the U.S economy.
On a conference call with reporters today, former Labor Secretary Robert Reich said:
"Workers want to be in unions…If they did have unions, they would have a wage and benefit premium, substantially, over the median wage worker today. If they did have higher wages and higher benefits, they would have the purchasing power they need to buy more of the goods and services that this economy produces. And that would strengthen the economy overall. So unionization is not just good for workers who are in unions. Unionization actually is very, very important to the economy overall and would create broad benefits for the United States economy."
The report shows that unlike in the past, when workers were compensated for 100 percent of their productivity gains, today’s workers are not reaping the benefits they deserve from their increased productivity. Increasing union coverage rates, which would be achieved by the passage of the Employee Free Choice Act, could likely reverse these trends, as more Americans would benefit from the union wage premium and receive higher wages.
“If unionization rates were the same now as they were in 1983 and the current union wage premium remained constant, new union workers would earn an estimated $49.0 billion more in wages and salaries per year,” conclude CAPAF authors David Madland, Director of the American Worker Project, and Karla Walter, Policy Analyst. “If union coverage rates increased by just 5 percentage points over current levels, newly unionized workers would earn an estimated $25.5 billion more in wages and salaries per year.”
Non-union workers would also benefit as employers would likely raise wages to match what unions would win in order to avoid unionization.
Starting today, the Center for American Progress Action Fund is building off of the new report and partnering with allies including AFL-CIO, SEIU, and American Rights at Work to release a series of state-specific reports quantifying the benefits to individual states that could accrue through greater unionization.
The national report it available here: http://www.americanprogressaction.org/issues/2009/02/efca_factsheets.html.