Unions build wealth, narrow racial wealth gaps

New analysis of federal data shows unions increase wealth for all, particularly groups that historically had less wealth

The following is from the Center for American Progress:

WASHINGTON, D.C. (March 21, 2024) — As union membership continues to surge across the United States, newly released data from the Federal Reserve’s Survey of Consumer Finances covering 2022 assets demonstrate that unions build wealth for Americans. A new Center for American Progress analysis finds that union membership increases wealth for all households and tends to provide the biggest boost to groups who have historically had less wealth, such as Black and Hispanic households as well as those without a college degree.

Some key findings from the new analysis include:

• Union households possess 1.7 times the median wealth of nonunion households.
• Union membership narrows the racial wealth gap, closing the distance between the wealth of white households and that of Black, Hispanic, and members of the “other or multiple race” category. Membership in a union increases median wealth between 167 percent and 228 percent for households of color compared with a 37 percent increase in median wealth for white households.
• The median wealth of union households is greater than that of nonunion households across every education level. Union contracts provide the largest percentage increase in median wealth for households without a high school degree compared with all other levels of educational attainment.
• Union membership closes the wealth gap between working-class and college-educated households. The median wealth of nonunion working-class households is 21 percent of the wealth of college-educated nonunion households, whereas the median wealth of union working-class households is 49 percent that of college-educated union households.
• Union households are more likely to own a home and have a retirement plan compared with nonunion households.

“The relationship between union membership and wealth is significant and demonstrates the crucial role unions play in empowering workers,” said David Madland, a senior fellow for Inclusive Economy at CAP. “Given the increasingly growing public support for unions, policymakers cannot miss their chance to take action to strengthen workers rights, and that starts with passing the Protecting the Right to Organize (PRO) Act and the Public Service Freedom to Negotiate Act. These reforms will protect workers’ rights, provide incentives to unionize, and hold lawbreaking companies accountable.”

Unions can help increase household wealth for three key reasons. First, they increase wages through the negotiation of strong contracts. Second, union workers experience greater job stability, enabling workers to remain with the same employer for an extended period. This can increase wealth by reducing the costs of finding a new job. Third, union contracts are more likely to provide enhanced benefits such as pension plans and health insurance, creating additional savings for workers.

Wealth matters greatly to achieving financial security. It shields workers from economic shocks, helps fund retirement, and enables future generations to save and achieve economic stability. For example, workers with additional savings can cover emergencies, buy a home, and better support their children.

For more information, read the full column “Unions Continue To Build Wealth for All Americans” by David Madland, Christian E. Weller, and Sachin Shiva.

READY TO BUILD SOME WEALTH? Get more information about how you can join together with co-workers and negotiate for better wages and working conditions. Or go ahead and contact a union organizer today!