Inequality Rises as Union Numbers Decline

Part of the Series

Moyers and Company

By now, we’ve all heard about the growing disparity between rich and poor — and most of us have felt the effects. This chart, posted by Colin Gordon of the Economic Policy Institute, shows how income inequality corresponds to the rise and fall of union membership.

Gordon explains:

“One hallmark of the first 30 years after World War II was the ‘countervailing power’ of labor unions (not just at the bargaining table but in local, state, and national politics) and their ability to raise wages and working standards for members and non-members alike…. Into the early 1970s, both median compensation and labor productivity roughly doubled. Labor unions both sustained prosperity, and ensured that it was shared…

Over the second 30 years post-WWII—an era highlighted by an impasse over labor law reform in 1978, the Chrysler bailout in 1979 (which set the template for “too big to fail” corporate rescues built around deep concessions by workers), and the Reagan administration’s determination to “zap labor” into submission—labor’s bargaining power collapsed…. As a result, union membership has fallen and income inequality has worsened—reaching levels not seen since the 1920s.”