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Wages of service sector workers raised by unionization

04.30.09

May 2009 Allentown/Bethlehem/Easton edition of The Union News

Wages of service sector workers raised by unionization

BY PAUL TUCKER
THEUNIONNEWSABE@AOL.COM

LEHIGH VALLEY, April 19th- According to a study released jointly by the Center for Economic and Policy Research (CEPR) in Washington, DC, and the Keystone Research Center (KRC) in Harrisburg, 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.

Pennsylvania workers, like workers across the nation, have seen their wages stagnate or grow slowly in recent decades, but the report shows that being in a union significantly boosts the wages of Pennsylvanian workers employed in service industries, the report shows.

“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, a labor economist for KRC. “But today, more than three-quarters of all jobs in the country are service jobs, and there, as in other sectors, union provide important benefits.”

In Pennsylvaia, according to the report, 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 workers it is $14.27.

Service sector jobs include healthcare, childcare, and food service workers, clerks, housekeepers, and janitors. Essentially all jobs except those in agriculture, forestry, fishing, mining, manufacturing, and construction.

The report, “Unions and Upward Mobility for Service-Sector Employees,” was released on April 18th. It analyzes data on workers from the Census Bureau’s Current Population Survey, 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.

The CEPR is an independent think tank established to debate on most economic issues while the KRC is a similarly oriented non-profit organization which studies the Pennsylvania economy.

“Decades ago, it was unions that transformed tough jobs in Pennsylvania’s coal mines and steel mills into family sustaining jobs. These new data shows 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,” Mr. Price told the newspaper.

Mr. Price added however, as the economy has changed and 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,” added Mr. Price.

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 percent and 19 percentage points respectively.

Mr. Price can be contacted at (717) 255.7158 or (717) 440.2360. His e-mail is price@keystoneresearch.org.

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