Union membership means more wealth for working Americans

New studies prove what unions have been arguing for years: Union membership means more wealth for working Americans.

The Center for American Progress (CAP) analyzed new data from the Federal Reserve’s Survey of Consumer Finances and found that the median union household has significantly more wealth than non-union households, and these differences hold across demographic groups including race, ethnicity and education levels.

The median union household held $338,482 in wealth, while nonunion households held $199,948.

The data, collected in 2022, shows that union households have 1.7 times the median wealth of non-union households. Union families are more likely to own a home, more likely to have a retirement plan, and profess greater job stability than nonunion families.

WHAT IS WEALTH?
What is wealth? For the purposes of the study, it included all marketable assets including checking accounts, real estate, stakes in firms and vehicles, minus all debt such as mortgages, credit card debt and student loans. It also included the value of the income stream workers expect to receive from pensions.

The wealth results held steady even after accounting for other factors such as age, education, industry and occupation, among other factors.

“While it is possible that union members are simply more likely to work in higher-paying jobs or industries, as union density can vary considerably across sectors, a large body of research has shown that unions increase wages and other factors that allow households to build and maintain wealth,” the study concluded.

NARROWS RACIAL GAP
CAP found that union membership also narrows the racial wealth gap, closing the distance between white households and that of Black, Hispanic or “other/multiple race” households. Union membership increased median wealth 167 to 228 percent for households of color, compared with a 37 percent increase for white households. The biggest increase was for Hispanic households, who saw 328 percent more wealth with union membership.

It also leveled the field for households across education levels. Households without a college degree generally had 21 percent the wealth of college-educated non-union households. But a union household without a college degree held about 49 percent of a college-educated union household, according to the study.

COLLEGE DEGREES AND UNION MEMBERSHIP
College is still the strongest path to accumulating wealth according to the numbers, but union membership definitely levels the field to a certain extent – and union members have more job security, according to an analysis by Axios.

The highest levels of wealth were found among those with a college degree and union membership. Even those with some college – an associate’s degree, for example – had significantly higher wealth. And for those without a high school diploma, union membership meant three times the wealth of non-union workers without a diploma.

WHY IT’S IMPORTANT
Why is wealth important? The wealth that comes with union membership means a higher homeownership rate, more pension and 401(k) ownership, access to defined pensions and retirement funds.

The numbers aren’t unusual, either. CAP noted that the metrics are consistent with their findings over nearly a decade of the Federal Reserve’s surveys. “At a time of high economic inequality, these metrics show union contracts can close wealth gaps across race and education dimensions and provide pathways to the Middle Class for all Americans,” the study read.

However, despite wide public support for unions and workers’ eagerness to join them, CAP cited another study from the Economic Policy Institute that in one-third of union organizing campaigns, employers fire workers even though it is illegal. This seems to only be intensifying workers’ interest: as of a Gallup poll in August, 67 percent of Americans approve of unions, up from its all-time low of 48 percent in 2009 following the recession.

Overall, union membership in the U.S. is eight percent. In the 1950s heyday following World War II, union membership was about 35 percent.