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Stronger labor unions could do a lot of good

It’s pretty well known that U.S. workers have lost a lot of bargaining power over the past few decades. Wage gains, for example, haven’t kept pace with rising productivity. Clearly, workers have been unable to take home a fair share of the new value they were creating. Why? One big potential culprit is the decline […]

It’s pretty well known that U.S. workers have lost a lot of bargaining power over the past few decades. Wage gains, for example, haven’t kept pace with rising productivity.

Clearly, workers have been unable to take home a fair share of the new value they were creating. Why? One big potential culprit is the decline of labor unions. Unions use strikes and other collective action as a bargaining chip to force employers to raise wages. For this reason, union workers get paid about 22 percent more than non-unionized workers. Even non-union workers often benefit from unions setting the bar higher for wages. But unionization rates, never more than 50 percent, have declined to a negligible level in the U.S. private sector.

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