Unionization Substantially Raises Wages Of Pennsylvania Service-Sector Workers

Date of Press Release: 
April 22, 2009

HARRISBURG, PA—Pennsylvania workers, like workers across the nation, have seen their wages stagnate or grow slowly in recent decades. But a report released today shows that being in a union significantly boosts the wages of Pennsylvania workers employed in service industries.

The report, released jointly by the Center for Economic and Policy Research (CEPR) in Washington, D.C., and the Keystone Research Center (KRC) in Harrisburg, finds that unionization raises the wages of the average service-sector worker in Pennsylvania by nearly 9 percent.

Nationally, unionization raises the average service-sector wage by 10.1 percent.

“In many people’s minds, unionization is linked to manufacturing jobs—to well-paid work in industries like steel production and auto making,” said Mark Price, PhD, KRC’s labor economist. “But today, more than three-quarters of all jobs in the country are service jobs, and there, as in other sectors, unions provide important benefits,” Price added.

In Pennsylvania, according to the study, more than 77 percent of the workforce is in service-sector jobs, and the unionization rate in those jobs is 14.7 percent. The median wage for unionized workers in the service sector in Pennsylvania is $19.31, while for non-union members it is $14.27.

Service sector jobs include health-care, child-care, and food service workers; clerks, housekeepers, janitors—essentially all jobs except those in agriculture, forestry, fishing, mining, manufacturing, and construction.

The new report, “Unions and Upward Mobility for Service-Sector Employees,” is available online at http://www.cepr.net/documents/publications/unions-service-2009-04.pdf. It analyzes data on workers from the Census Bureau’s Current Population Survey (CPS), covering the years 2004 through 2007.

The study found that the impact of unions on service-sector employees in low-wage occupations was especially substantial. For workers in the 15 lowest-paying jobs, unionization raised wages by 15.5 percent.

“Decades ago, it was unions that transformed tough jobs in Pennsylvania’s coal mines and steel mills into family-sustaining jobs,” Price said. “These new data show that although the economy has changed radically since then, it is still unions that give the biggest boost to workers in the lowest- paying jobs.”

However, as the economy has changed, Price noted, employers have increasingly thwarted efforts by workers to join unions.

“Just as it took new federal laws in the 1930s to protect the rights of Pennsylvania workers seeking to join unions, it will take new legislation like the Employee Free Choice Act to protect workers seeking to join unions today, in our new service-based economy.”

The study also found that unionized service-sector workers are also more likely to have a pension and employer-provided health insurance, with unionization increasing those odds by 25 and 19 percentage points respectively.

Previous research reports by CEPR have found that unionization also benefits women workers as well as workers who are young, low-wage, or African-American.

CEPR is an independent, nonpartisan think tank that was established to promote democratic debate on the most important economic and social issues affecting people’s lives. The Keystone Research Center is a similarly-oriented Harrisburg non-profit whose mission is to make the Pennsylvania economy more equitable and prosperous.