From The New York Times:
by Noam Scheiber
It is well established that unions provide benefits to workers — that they raise wages for their members (and even for nonmembers). They can helpreduce inequality.
A new study suggests that unions may also help children move up the economic ladder.
Researchers at Harvard, Wellesley and the Center for American Progress, a liberal think tank, released a paper Wednesday showing that children born to low-income families typically ascend to higher incomes in metropolitan areas where union membership is higher.
The size of the effect is small, but there aren’t many other factors that are as strongly correlated with mobility. Raj Chetty of Stanford, Nathaniel Hendren of Harvard, and Patrick Kline and Emmanuel Saez of the University of California, Berkeley, who pioneered this method of examining economic mobility, established five factors that are strongly correlated with a low-income child’s likelihood of making it into the middle class: the rate of single motherhood in an area, the degree of inequality, the high school dropout rate, the degree of residential segregation, and the amount of social capital, as measured by indicators like voter turnout and participation in community organizations.
Single motherhood is the most strongly correlated factor with mobility. The latest study, which relied on the Chetty/Hendren data, says union membership is roughly as strongly correlated with mobility as the other four factors.
“It’s a striking relationship,” said Lawrence Summers, the former Treasury secretary and Obama economic adviser, who is participating in a discussion with some of the study’s authors on Wednesday. “It’s further grounds for concern about the decline of unionism in the United States.”
The authors posit a variety of reasons for why higher rates of unionization tend to coincide with greater mobility, beyond the effect on parents’ wages, which would seem to be the most obvious way unionization could matter.
Their most interesting explanation is that unions are effective at pushing the political system to deliver policies — like a higher minimum wage and greater spending on schools and other government programs — that broadly benefit workers. Perhaps not surprisingly, three cities that appear to reflect the union effect — San Francisco, Seattle and New York — are all jurisdictions where the minimum wage is rising substantially (though for New York it is only for workers in fast-food chains.).
Read the full article from The New York Times.