Members of 1199 Service Employees International Union march up Fifth Avenue in the annual Labor Day Parade in New York. AP Photo/Bryan R. Smith

One study finds kids who grew up in union families earn more when they enter the workforce.

Decline in union participation—halved since the 1980s—is one reason that middle-income wages have stagnated for decades. Unions tend to create compressed income structures, where more workers earn similar wages. Now, high and low incomes sit on increasingly distant shores.

This wage structure effect is key feature of unionism’s relationship to middle-class workers. But what does it mean for their children? A new working paper from the National Bureau of Economic Research asks how unionism relates to intergenerational mobility: how parents pass along wealth and other forms of social capital to offspring.

Using data from the decades-long Panel Study of Income Dynamics (PSID), a team of economists led by Richard Freeman—director of NBER’s Science and Engineering Workforce Project and a professor of economics at Harvard University—looked at the relationship between parents’ union status and the income of their children, once they entered the workforce. Drawing from PSID income, education, and health data for two generations of labor, the researchers compared the incomes of full-time workers, ages 26 to 37, by the union status of their parents.

Looking at the simplest spread of data, workers who had at least one union-participating parent earned higher incomes than those with no union-participating parents. The difference is even more dramatic when you look at the offspring of parents with low education levels: Children of parents who did not finish college but who did participate in a union had incomes 16 percent higher than the average income of children of non-union, non-degreed parents.

The data shows that people who grew up in union families also go further in their own education, even if their own parents didn’t make it to college. These kids also have better health outcomes—which might be accounted for by the medical and childcare benefits that unions often provide. All of the above findings held true after the researchers controlled for attributes like age, race, ethnicity, and job status for parents and children.

The study also finds evidence that, even for those whose parents did not belong to unions, children who simply lived in a community where union participation was high had higher incomes once they entered the workforce.

Drawing from Census-based rates of union membership in commuting zones, and external data on intergenerational income mobility, the researchers found a positive association between the union “density” of a community—that is, how many people in a community were unionized relative to its size—and the future income of kids who grew up there. There might be a spillover effect at work here, since union advocacy often creates policies that benefit all workers, like higher minimum wages and increased education spending.

Certainly, parsing these findings requires a hunk of salt. The researchers have found correlations—not causation—between the union status of parents and their childrens’ wealth and health. And the many major economic shifts between the 1980s and now would make it exceedingly difficult to nail down causation. Blue-collar jobs are more competitive than they used to be, with many industries outsourcing their labor or otherwise deregulating their wages.

Still, the authors write, there is one clear implication:

[T]he US will find it harder to address the problem of the diminishing middle-income group than if trade unions were as strong and viable as they were 30, 40, or 50 years ago. A strong union movement is not simply sufficient for high levels of intergenerational mobility and middle-class membership, but it could be necessary.

About the Author

Most Popular

  1. Coronavirus

    Why Asian Countries Have Succeeded in Flattening the Curve

    To help flatten the curve in the Covid-19 outbreak, officials at all levels of government are asking people to stay home. Here's what’s worked, and what hasn't.

  2. Equity

    The Problem With a Coronavirus Rent Strike

    Because of coronavirus, millions of tenants won’t be able to write rent checks. But calls for a rent holiday often ignore the longer-term economic effects.

  3. photo: a bicycle rider wearing a mask in London
    Coronavirus

    In a Global Health Emergency, the Bicycle Shines

    As the coronavirus crisis forces changes in transportation, some cities are building bike lanes and protecting cycling shops. Here’s why that makes sense.

  4. photo: South Korean soldiers attempt to disinfect the sidewalks of Seoul's Gagnam district in response to the spread of COVID-19.
    Coronavirus

    Pandemics Are Also an Urban Planning Problem

    Will COVID-19 change how cities are designed? Michele Acuto of the Connected Cities Lab talks about density, urbanization and pandemic preparation.  

  5. Equity

    We'll Need To Reopen Our Cities. But Not Without Making Changes First.

    We must prepare for a protracted battle with coronavirus. But there are changes we can make now to prepare locked-down cities for what’s next.

×