Union ‘Wage Compression’ Typically Means Lower Pay For the Most Productive

National Right to Work Committee President Mark Mix commented: “Even in cases where the overall net impact of unionization is to increase the share of business revenues that go into wages for production employees, some or many of the workers may still end up worse off. 

“Among the types of workers whose paychecks are often smaller because they are subject to so-called union ‘exclusivity’ are those who are especially talented and/or hardworking. 

“In fact, over the years a number of academic apologists for Organized Labor have made no bones about the fact that workers whose productivity is above average typically get paid less when they are unionized. Take, for example, Richard Rothstein, now a distinguished fellow with the union-boss founded Economic Policy Institute. 

“In a brief survey of academic literature on the impact of exclusive union bargaining on the pay of employees with diverse levels of skill and industriousness, Mr. Rothstein has written: ‘In [unionized] firms, wages of lower paid workers are raised above the market rate, with the increase offset . . . [in part] by reducing pay of the most productive workers.’”

When union officials do actually secure across-the-board higher pay for workers than employers acting purely on their own initiative would offer, there are almost invariably consequences that may be detrimental to those same workers’ economic interests over time. 

NATIONAL RIGHT TO WORK COMMITTEE

All contents from this article were originally published on the National Right to Work Committee Website.

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