The Union Advantage in Pay and Benefits

What We Measure –
A comparison of wages and benefits for union and nonunion workers shows that organized workers receive higher total compensation than their nonunion counterparts. Benefit compensation includes the per hour cost of benefits like paid leave, supplemental pay, insurance, retirement and savings, and legally required benefits such as Social Security and unemployment. Wage compensation includes only the hourly wage that is paid to the employee. Total compensation is the sum of wage and benefit compensation.

 

The Typical Worker in June 2002 (per hour)   Union Nonunion Union Advantage Total Wage $19.47 $15.46 + $4.01     Paid Leave $2.09 $1.36 $0.73     Supplemental Pay $1.04 $0.55 $0.49     Insurance $2.84 $1.25 $1.59     Retirement & Savings $1.65 $0.50 $1.15     Legally Required Benefits $2.49 $1.74 $0.75     Other Benefits $0.08 $0.02 $0.06 Total Benefits $10.19 $5.42 + $4.77 Total Compensation $29.66 $20.88 + $8.78

Viewing a side-by-side comparison of union workers' wages and benefits against those of nonunion workers, shows just how great the union advantage is. In the graph below, each element of compensation is larger for the union worker regardless of the industry.

The Union Advantage, June 2002

 

The Advantage – Total Compensation
In 2002, the average union worker in the private sector received total compensation of $29.66 per hour compared to $20.88 for the average nonunion worker. The advantage to the union worker is $8.78 per, or $18,262 per year for a full-time, full-year worker.

The Advantage – Wages
In June 2002, the average union worker in the private sector earned $19.47 per hour while the average nonunion worker earned $15.46 per hour. Therefore, the typical union worker enjoys $4.01 per hour more than their nonunion counterpart does, which is $8,340 per year for a full-time, full-year worker.

The Advantage – Benefits
Collective bargaining has been particularly effective in the benefits arena. The average union worker in the private sector receives $10.19 per hour toward their benefits package while their nonunion counterpart receives only $5.42 per hour. This gives an advantage of $4.77 per hour to the union worker. The largest advantage for union workers is realized in insurance, which consists of health and life insurance, where union workers receive $1.59 per hour more than nonunion workers.

Regional Considerations
Another way to capture union advantage is comparing compensation by regions, since different parts of the country have varying rates of unionization and varying levels of compensation. The average worker in the Northeast is the highest paid, followed by the West, Midwest, and finally the South. In southern states, only 10.3 percent of workers are represented by unions. Workers in the West and Midwest are more likely to be represented by a union, 14.8 percent and 15.1 percent respectively. The Northeast has the highest union representation with 17.3 percent of its workers represented by unions. Not surprisingly, the states that have the highest unionization enjoy higher wages, salaries and benefits.

Wages, Benefits and Union Density by Region

Region Wages & Salaries Benefits Total Compensation Percent of Workers Covered by Union Contract Midwest $15.38 $6.00 $21.38 15.1% Northeast $17.97 $7.06 $25.03 17.3% South $14.47 $5.17 $19.64 10.3% West $16.78 $6.05 $22.82 14.8%