Biden Administration Report Highlights Labor Unions’ Benefits To Middle Class

A week before Labor Day, the Joe Biden administration’s Treasury Department released a first-of-its-kind report, “Labor Unions and the Middle Class,” highlighting evidence that unions serve to strengthen the middle class and grow the economy at large.

“This report is the Administration’s latest action to strengthen the important role of labor unions in our economy and it is the Treasury Department’s first major effort to lay out the rationale for why we think this is so important,” said Treasury Secretary Janet Yellin.

“The Treasury Department’s report finds that unions raise the wages of their members by around 10 to 15%,” she explained. “We also observe that union workers have greater access to critical fringe benefits, such as retirement benefits, medical benefits, and life insurance.” And, “Unions also impact personnel practices, bringing about better workplace grievance systems and improved workplace safety.”

But nonunion workers also benefit. “Other workers see increases in wages and improved work practices as their nonunionized workplaces compete with unionized ones for labor,” the report said. “In turn, the higher pay and job security of both unionized and nonunionized middle-class workers can further spill over to their families and communities through more stable housing, more investment in education, and other channels.”

“Heightened workplace safety norms can pull up whole industries,” Yellin added.

In addition, “Our research also finds that unions fuel equality. Today’s unions benefit all demographic groups,” Yellin said. “Unions reduce race and gender wage gaps by encouraging explicit anti-discrimination measures and egalitarian wage practices. Working parents, including mothers, benefit from more scheduling predictability, which is more likely in unionized workplaces. And Black men, who have the highest union membership rates of any demographic groups, have also been particularly hit by the trends experienced by the middle class as a whole. They therefore may be particularly poised to benefit from unionization.

“Taken together,” Yellin summed up, “these findings challenge arguments that unions hold back growth. Unions could contribute to reversing the stark increase in inequality we’ve seen in recent decades, promoting economy-wide growth. There are also many cases of unions improving productivity.”

The report also highlighted Biden administration actions to strengthen unions and workers’ rights, including:

• Increasing the funding of the National Labor Relations Board, or NLRB, to enable them to expand enforcement activities.
• Creating the White House task force on worker organizing and empowerment, which, under the leadership of Vice President Kamala Harris, works with agencies on ways to use their existing statutory authority to support worker organizing and bargaining.
• Signing executive order 14063, which requires the use of project labor agreements on federal construction projects of $35 million or more.
• Promoting “know your rights” initiatives to provide workers with better information about their organizing and bargaining rights.
• Announcing a new rule to raise wage standards of construction workers by updating prevailing wage regulations issued under the Davis-Bacon and Related Acts, which require payment of locally prevailing wages and fringe benefits to more than 1 million construction workers.

“Going forward,” Yellin said, “I hope research like this report supports continued efforts to build worker power and bring about much-needed gains for the middle class and for the economy as a whole.”