Arkansas CNP Employees for Unionization

The essence of what labor unions do—give workers a stronger voice so that they can get a
fair share of the economic growth they help create—is and has always been important to
making the economy work for all Americans. And unions only become more important as
the economy worsens.
One of the primary reasons why our current recession endures is that workers do not have
the purchasing power they need to drive our economy. Even when times were relatively
good, workers were getting squeezed. Income for the median working age household fell
by about $2,000 between 2000 and 2007, and it could fall even further as the economy
continues to decline.1 Consumer activity accounts for roughly 70 percent of our nation’s
economy, and for a while workers were able to use debt to sustain their consumption. Yet
debt-driven consumption is not sustainable, as we are plainly seeing.
What is sustainable is an economy where workers are adequately rewarded and have the
income they need to purchase goods. This is where unions come in.
Unions paved the way to the middle class for millions of workers in Arkansas and pioneered
benefits such as paid health care and pensions along the way. Even today, union
workers earn significantly more on average than their non-union counterparts, and union
employers are more likely to provide benefits. And non-union workers—particularly in
highly unionized industries—receive financial benefits from employers who increase
wages to match what unions would win in order to avoid unionization.
Unfortunately, declining unionization rates mean that workers are less likely to receive
good wages and be rewarded for their increases in productivity. The Employee Free
Choice Act, which is likely to be one of the most important issues debated by the 111th
Congress, holds the promise of boosting unionization rates and improving millions of
Americans’ economic standing and workplace conditions.

Unions help workers achieve higher wages
Union members in Arkansas and across the country earn significantly more than nonunion
workers. Over the four-year period between 2004 and 2007, unionized workers’
wages in Arkansas were on average 7.7 percent higher than non-union workers with similar
characteristics.2 That means that, all else equal, Arkansas workers that join a union will
earn 7.7 percent more—or $1.26 more per hour in 2008 dollars—than their otherwise
identical non-union counterparts.3
Yet union coverage rates have been declining for several decades. In 1983, the first year for
which state level unionization data is available, 13.8 percent of workers in Arkansas were
either members of a union or represented by a union at their workplace.4 By 2008, that
portion declined to 7.3 percent.

Workers’ wage growth lags as American productivity increases
Workers helped the economy grow during this time period by becoming ever more
productive, but they received only a small share of the new wealth they helped create.
Throughout the middle part of the 20th century—a period when unions were stronger—
American workers generated economic growth by increasing their productivity, and they
were rewarded with higher wages.6 But this link between greater productivity and higher
wages has broken down.
Prior to the 1980s, productivity gains and workers’ wages moved in tandem: as workers
produced more per hour, they saw a commensurate increase in their earnings. Yet wages
and productivity growth have decoupled since the late 1970s. Looking from 1980 to 2008,
nationwide worker productivity grew by 75.0 percent, while workers’ inflation-adjusted
average wages in Arkansas increased by only 22.9 percent, which means that workers were
compensated for only 30.6 percent of their productivity gains.7
The cost of benefits—especially health insurance—has increased over time and now
accounts for a greater share of total compensation than in the past, but this increase
is nowhere near enough to account for the discrepancy between wage and productivity
growth.8 For example, according to analysis by the Center for Economic and Policy
Research, between 1973 and 2006 the share of labor compensation in the form of benefits
rose from 12.6 percent to 19.5 percent.9
If Arkansas’ workers were rewarded for 100 percent of their increases in labor productivity
between 1980 and 2008—as they were during the middle part of the 20th century—
average wages would be $23.29 per hour—42.4 percent higher than the average real wage
in 2008.

Unionization rewards workers for productivity growth
Slow wage growth has squeezed the middle class and contributed to rising inequality.11 But
increasing union coverage rates 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 in Arkansas would earn an estimated $166 million more in wages
and salaries per year.12 If union coverage rates increased by just 5 percentage points over
current levels, Arkansas’ newly unionized workers would earn an estimated $127 million
more in wages and salaries per year.13 Non-union workers would also benefit as employers
would likely raise wages to match what unions would win in order to avoid unionization.

Increased unionization would boost Arkansas’ annual state wages
Union employers are also significantly more likely to provide benefits to their employees.
Union workers nationwide are 28.2 percent more likely to be covered by employer-provided
health insurance and 53.9 percent more likely to have employer-provided pensions
compared to workers with similar characteristics who were not in unions.

Nearly three out of five survey respondents from a Peter Hart Research Associates poll
report that they would join a union if they could, but workers attempting to unionize
currently face a hostile legal environment and are commonly intimidated by aggressive
anti-union employers.16 The Employee Free Choice Act would help workers who want to
join a union do so by ensuring fairness in the union selection process with three main provisions:
workers would have a fair and direct path to join unions through a simple majority
sign-up; employers who break the rules governing the unionization process would face
stiffer penalties; and a first contract mediation and arbitration process would be introduced
to thwart bad-faith bargaining.
Passing the Employee Free Choice Act and making it harder for management to threaten
workers seeking to unionize would be good for Arkansas’ workers. It would help boost
workers’ wages and benefits. And putting more money in workers’ pockets would provide
a needed boost for Arkansas’ economy. Increasing unionization is a good way to get out of
our current economic troubles.

Reference: http://images2.americanprogress.org/CAPAF/2009/02/AR_EFCA.pdf