Union Vs. Nonunion Wages

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Higher wages and better benefits are two of the chief advantages of belonging to a labor union. Only about 1 in eight American workers belongs to a union, but those that do earn higher salaries than their nonunion counterparts in the same job. This holds true for most occupational classes, according to research by the U.S. Bureau of Labor Statistics.

Expert Insight

The Economic Policy Institute, a pro-labor research organization in Washington, D.C., reported that unionized workers generally earn 15 to 20 percent more in wages than nonunion workers. The EPI calls this phenomenon the “union wage premium.” However, the institute cautioned that because union workers generally receive much better benefits, such as health insurance and pension plans, than nonunion workers, the union premium may be much greater than 20 percent, which applies only to wages.

Wage Differences by Occupation

The U.S. Bureau of Labor Statistics reported average weekly earnings of union and nonunion members across a wide variety of occupations. The union premium varied, but in most cases the union workers earned higher wages than nonunion workers. The union wage premium was greatest in such sectors as construction and manufacturing, two areas in which unions have had a greater presence. In construction, union members earned an average of $1,051 a week in 2010, compared with $692 a week for nonunion workers. Union manufacturing workers earned $828 a week on average, while nonunion workers earned $759 a week, the bureau reported.

Public Sector Jobs

Union representation is greatest in the public sector. The Bureau of Labor Statistics reported in 2010 that 36 percent of government workers belonged to a union, compared with only 7 percent in the private sector. Bureau data indicate that in 2010, unionized public sector workers earned an average weekly salary of $947, compared to $782 for their nonunion counterparts. Union workers in state and local governments earned more than nonunion workers. At the federal level, however, nonunion workers held the advantage. Their weekly earnings averaged $1,040 while union workers at the federal level earned $977 a week.

White-Collar Jobs

The union wage premium is the greatest in industrial sectors that have traditionally been union strongholds, such as manufacturing, as well as in low-skilled jobs such as those in the service sector. Bureau of Labor Statistics data indicate, however, that the wage premium shrinks or disappears in white-collar jobs, with union workers earning only slightly more – and in some cases, less – than nonunion workers. In the management and professional category, for example, union and nonunion workers had almost identical average earnings of $1,047 and $1,045, respectively. In architecture, engineering and management jobs, nonunion workers had slightly higher earnings than union members.

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