Thursday, September 20, 2012

Higher Unionization Rates Increase Economic Mobility

In the U.S., economic mobility — the ability of a person to move to a higher income bracket than her parents —
lags behind other industrialized nations. According to one study, “65 percent of Americans born in the bottom fifth stay in the bottom two-fifths as adults, while 62 percent of those born in the top fifth of incomes stay in the top two-fifths.”

But according to a Center for American Progress Action Fund analysis of data from the Pew Center on the States, there is something that can help: unionization. As CAPAF’s David Madland and Nick Bunker found, “states with high union membership rates are more likely to have high levels of economic mobility, even after controlling for other factors such as education, income levels, inequality, and unemployment”:

Our analysis finds that education is the most important source of mobility—but unionization rates matter quite a bit as well. Increasing the unionization rate in the average state by 10 percentage points—roughly to the level they were in 1980—would be associated with an increase of just under 4 percentage points in the share of the population that is upwardly mobile. This is about two-fifths of the impact of boosting the share of the workforce with a college degree by 10 percentage points.


Unionization also boosts wages, helping mitigate the effects of income inequality. Research has shown that income inequality can also dampen economic mobility.

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