Trends in Real Wage Growth among Union, Nonunion Workers

In recent years, the U.S. economy has experienced a period of high inflation and substantial nominal wage growth. While wage increases have been widespread due to a booming labor market, some workers have seen much larger gains than others due to differences in labor shortages and bargaining power a...

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Bibliographic Details
Published in:Policy File 2024
Main Author: Dvorkin, Maximiliano A
Format: Report
Language:English
Subjects:
Economic conditions
Labor contracts
Labor costs
Labor market
Labor unions
Wages & salaries
Online Access:Request full text
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Summary:In recent years, the U.S. economy has experienced a period of high inflation and substantial nominal wage growth. While wage increases have been widespread due to a booming labor market, some workers have seen much larger gains than others due to differences in labor shortages and bargaining power across sectors and occupations. Within the last year, collective labor agreements reached by auto workers and delivery workers have received national media attention due to the magnitude of their negotiated wage and benefit increases. About 10% of U.S. workers are affiliated with a union (PDF), but in a very tight labor market, the wages and benefits that firms offer to attract and retain workers must be competitive, and nonunion-affiliated workers may experience similar wage and benefit gains. In this blog post, I examine whether the wages of workers with union affiliation have increased at a different rate than those of workers without union affiliation. For this, I use the employment cost index (ECI), produced by the U.S. Bureau of Labor Statistics. The ECI measures the change in the hourly cost of labor to employers over time and includes wages and salaries and nonwage benefits. Labor cost information is available for union versus nonunion workers and by economic sector, among other characteristics.