Tuesday, August 29, 2017

Loss of Union Jobs could indicate lower worker pay in USA

"With globalization devastating U.S. manufacturing jobs and cost-cutting putting pressure on those that remained, union membership in the private sector has collapsed from a quarter of the total workforce in 1973 to 6.4 percent last year. 

This has had tremendous depressing effects on wages, since private union jobs on average offer 19 percent more in base pay than non-union positions, and over 50 percent more when health care, retirement and other benefits are included.

State and local government employees have enjoyed much higher pay and even more lush benefits than private-sector workers. Nevertheless, municipal employee compensation is under fire from many states and local governments with strained budgets and vastly underfunded pension plans. At the same time, municipal union membership is slipping.

Many employees are reluctant to demand higher pay because memories of the recession are still fresh. There also is an understanding among those who quit in the hope of getting a higher-paying job that they will probably end up with lower pay. On the other side, most employers, in the face of foreign and domestic competition, don’t believe they can pass on increased labor costs by boosting prices. The only alternative is increased productivity so higher costs can be paid without cutting into business profits. But miserable productivity growth has not provided the value added to justify higher wages."

via bloombergquint