Treasury releases report on role labor unions play in economy

The U.S. Treasury Department issued a report this week that examines the role that labor unions play in the economy.

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The report, conducted by the Treasury’s Office of Economic Policy, finds that unions play an important role in addressing challenges faced by the middle class, including stagnant wages, high housing costs, and reduced intergenerational mobility.

Specifically, it found that unions raise the wages of their members by 10 to 15 percent and improve fringe benefits and workplace procedures such as retirement plans, workplace grievance policies, and predictable scheduling. These workplace improvements contribute to financial stability and worker well-being.

Unionization also has spillover effect, the report said, as workers at nonunionized firms, because of the competition from unions, see increased wages too. Also, the heightened workplace safety norms can pull up whole industries. Further, union members improve their communities through heightened civic engagement as they are more likely to vote, donate to charity, and participate in a neighborhood project.

In addition, by encouraging egalitarian wage practices, unions serve to reduce race and gender wage gaps and reduce income inequality. Income inequality, in turn, often feeds back into inequality of opportunity, which impedes growth if disadvantaged people cannot access the resources necessary to acquire job skills or start businesses.

The report added that there are recent signs of a reinvigorated labor movement, as union election petitions in 2022 bounced back from the pandemic to their highest level since 2015. Also, public opinion of labor unions is at its highest level in over 50 years.

The Biden-Harris Administration has taken several steps to advance unions, including prioritizing the passage of the Protecting the Right to Organize (PRO) Act and the Public Sector Freedom to Negotiate Act. It also appointed a general counsel and board members to the National Labor Relations Board (NLRB) and increased funding to the NLRB.

Further, it created the White House Task Force on Worker Organizing and Empowerment, which works with agencies on ways to use their existing statutory authority to support worker organizing and bargaining. The administration also signed an executive order requiring the use of project labor agreements on federal construction projects of $35 million or more, as well as one to promote the rights of federal employees to collectively bargain.

Finally, it announced a new rule to raise wage standards of construction workers by updating prevailing wage regulations issued under the Davis-Bacon and Related Acts.