De-unionization and the wages of essential workers

Abstract

A definition of essential industries based on recent federal government guidelines is used to trace out the trajectory of wages for essential and nonessential sectors over time in the United States. This retrospective approach is justified by the fact that the included industries provide goods and services that are essential to health and safety whether or not emergency conditions exist. Union density has been consistently higher in essential industries, but the percentage of nonunionized workers has also increased more rapidly in those industries. The data show that real wages in essential industries have declined relative to nonessential industries since 1983 and that essential industries have consistently had lower levels of wage inequality than their nonessential counterparts. Regression analyses suggest that uneven de-unionization can explain part of the decline in relative wages. Furthermore, higher rates of union coverage in essential industries likely contribute to their comparatively low levels of wage inequality.

KEYWORDS:

• Essential workers
• critical infrastructure sectors
• wage dispersion
• wage differentials
• labor unions

JEL Codes:

• D63: equity, justice, inequality, and other normative criteria and measurement
• J31: wage level and structure
• wage differentials
• J51: trade unions: objectives, structure, and effects
• J58: labor-management relations, trade unions, and collective bargaining: public policy

Acknowledgements

Ramaa Vasudevan, Anders Fremstad, Harvey Cutler, Stephan Weiler, and Wisnu Nugroho provided helpful comments.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Data availability statement

The data that support the findings of this study are openly available in Colorado State University Libraries’ digital repository, Mountain Scholar, at the following link: https://doi.org/10.25675/10217/230405. The list of essential industries used for this analysis is also available through the same link.

Additional information

Notes on contributors

Adam Walke

Adam Walke is a PhD student at Colorado State University. He was previously an economic researcher at the University of Texas at El Paso.