Differences between Union and Nonunion Compensation, 2001-2011: Union Workers Continue to Receive Higher Wages Than Nonunion Workers and Have Greater Access to Most Employer-Sponsored Employee Benefits; during the 2001-2011 Period, the Differences between Union and Nonunion Benefit Cost Levels Appear to Have Widened
Long, George I., Monthly Labor Review
Recent data from the Bureau of Labor Statistics (BLS) show that, on average, union workers receive larger wage increases than those of nonunion workers and generally earn higher wages and have greater access to most of the common employer-sponsored benefits as well. (1) These trends appear to persist despite declining union membership. (2) The National Compensation Survey (NCS) measures compensation levels and benefit provisions for many worker and industry characteristics. This article uses NCS data to examine some of the similarities and differences between union and nonunion compensation during the period from 2001 to 2011.
Data from the Current Population Survey (CPS) show that 14.8 percent of wage and salary workers (or nearly 18 million employees) were represented by a union in 2001, compared with only 13.0 percent (more than 16 million employees) in 2011. (3) In addition, data from the Economic Policy Institute show nearly identical trends: almost 15 percent of workers were covered by a collective bargaining agreement in 2001, but only 13.1 percent were covered by such an agreement in 2011. (4) The NCS considers a worker to be in a union occupation when all of the following conditions apply:
* A labor organization is recognized as the bargaining agent for all workers in the sampled occupation.
* Wage and salary rates are determined through collective bargaining or negotiations.
* Settlement terms must include earnings provisions and may include benefit provisions.
* These provisions are embodied in a signed, mutually binding collective bargaining agreement.
Compensation data from the NCS include separate data by bargaining status. Data showing the rate of change in employer compensation costs (from the Employment Cost Index) have been available by bargaining status since 1976. Data on actual compensation costs (from the Employer Costs for Employee Compensation program) have been available since 1986. (5)
Employer Costs for Employee Compensation
According to March 2001 Employer Costs for Employee Compensation (ECEC) data, wages and salaries for private industry union workers averaged $18.36 per hour while those for nonunion private industry workers averaged $14.81 per hour. Union workers' wages were also higher in March 2011, averaging $23.02 per hour for union workers compared with $19.51 per hour for nonunion workers. Historically, union wage levels have been consistently higher in all reference periods between 2001
In addition to the estimates of wages and salaries, the ECEC program also produces estimates of average cost of employee benefits per hour worked by a number of employee and employer characteristics. However, data users should use caution when making comparisons of average per-hour costs of benefits across the various employee groups because the ECEC estimates represent averages of employer costs incurred on behalf of all employees--those who have access to benefits and those who do not, as well as those who choose to participate in benefits and those who do not. As a result, estimates of average per-hour-worked benefit costs calculated in this manner reflect not only the "pure" costs of benefits for employees in a given employee group, but also the incidence (access and participation) of benefits among the workers in this group. (6)
Benefit costs were higher for union workers than for nonunion workers for all of the quarters presented in table 1. In March 2001, the average benefit costs were $9.45 per hour worked for union workers but only $5.18 per hour worked for nonunion workers. The average total benefit cost was $14.67 per employee hour worked for union workers in March 2011 but only $7.56 per employee hour worked for nonunion workers. While the difference between union and nonunion wages has remained fairly consistent over time, the difference between union and nonunion benefit costs appears to have widened. …