Unifor economist’s study shows strong unions needed


The combination of rising corporate concentration and falling trade union power has led to the growing income gap in America. That’s the findings of a new study by Unifor economist Jordan Brennan, published by the Levy Economics Institute in New York.

“The wage gap in America went from a postwar low in 1976 to a postwar high in 2012,” said Brennan. 

“During that time we experienced a double-sided phenomenon. As concentration of corporate ownership increased we simultaneously saw the decline of organized labour and the middle-class that it created.”

While there are roughly 5.7 million registered corporations in the United States, Brennan points out that the 100 largest own approximately one-fifth of the total assets.  Over the past few decades these conglomerates have invested tremendous resources into acquisitions. The resulting top-heavy corporate structure has put downward pressure on growth while elevating inequality.

The study found that, in the past, the power of organized labour mitigated the wage gap.

“Historically, unions act as a “check” on the commodified power of large firms,” said Brennan. “The decrease in the number of unionized workers in the U.S. has coincided with frozen wages, the diminishment of the middle-class and a growing income gap between the majority and the one per cent,”

Union membership in America hit a historic high of 29 per cent in 1954. By 1979 membership slid to 24 per cent, then anti-union policies during the Reagan era, combined with other economic and technological developments, took their toll. By 2013 union participation in America had declined to just 11 per cent.

“The impact of organized labour is felt in ways as diverse as social policy, politics, and culture - not just wages.” said Brennan. “This study clearly demonstrates the vital role that unions play in improving the quality of life for both their members and for society as a whole.”