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Why union members earn higher wages than their non-union colleagues

Craig MacMillan and colleagues write in The Conversation (20.3.18) about their research which finds that union members earn higher wages because they have 'more experience' in workplace negotiation than their non-union colleagues.

'Over recent decades in Australia union membership has fallen from 40% of the workforce in 1990 to 15% in 2016 and so unions might seem less relevant in making a difference to what we earn. But our research finds that union members do earn higher wages per hour than non-union members.

'This is because union members have more experience with their current employer, in their occupation and in the labour market generally, than non-union members.

'The study used data from the Household, Income and Labour Dynamics in Australia (HILDA) survey from 2001-2013 with a sample of 80,000 workers. It showed that male union workers earned 12% more than male non-union workers per hour and female union workers earned 18% more per hour than female non-union workers.

'We explored whether these pay differences could be explained by whether or not the two groups had different characteristics such as formal education levels and various forms of labour market experience. In economics, the more knowledge and skills a worker has, the higher productivity and higher wages they’ll have.

'However formal education didn’t seem to factor in as a decider of differences in wages between unionists and non-unionists in the study. Rather, these findings suggest that when unions negotiate collective agreements for members they are concerned about employment security, as well as wages and this is a deciding factor.'

 

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