A Measure of Value: Labor Day,  Unions and Minimum Wage

Contributed by Sarah Gold.

It’s Labor Day! You may have seen the bumper stickers – Unions: The Folks Who Brought You the Weekend. Historically, unions have pushed for safer working conditions and better pay. This has had real life impacts: union workers have a $1.24 per hour wage premium compared to non-union workers. The wage premium is even higher for Black and Hispanic workers: $2.60 and $3.44, respectively. 

Despite of the importance of unions, however, union membership has dropped significantly over the last several decades, from about 20% in the early 1980s to just over 10% today, in part due to states adopting “right to work” laws that permit workers to work in unionized workplaces without paying union dues, weakening union strength.

Simultaneously, the real value of the minimum wage has decreased over time. In 1960, the minimum wage was worth 46% of the national median wage for full-time workers. Today, it’s worth about a third of the median wage. More concretely, in 1960, when the minimum wage was adopted, it was worth $8.65 in today’s dollars while today’s federal minimum wage is $7.25. 

While some states and municipalities have raised their minimum wages, there is currently no state in which a full-time minimum wage worker can afford to rent a two-bedroom apartment; childcare costs are similarly daunting and cost nearly as much as in-state college tuition. The minimum wage is not a living wage (try this activity from the New York Times and see if you could live on the minimum wage).

The federal minimum wage has not been increased in over a decade. Biden and Harris are committed to raising the federal minimum wage to $15 an hour and encouraging and incentivizing unionization and collective bargaining. Beyond simply raising the minimum wage, the Biden-Harris Administration would also expand eligibility to include workers who are currently excluded from minimum wage laws (like farmworkers and domestic workers), addressing the systemic racism currently embedded in our minimum wage laws.