Union decline and rising inequality in two charts

Source: Colin Gordon, Economic Policy Institute, Working Economics blog, June 5, 2012

One hallmark of the first 30 years after World War II was the “countervailing power” of labor unions (not just at the bargaining table but in local, state, and national politics) and their ability to raise wages and working standards for members and non-members alike. …Over the second 30 years post-WWII–an era highlighted by an impasse over labor law reform in 1978, the Chrysler bailout in 1979 (which set the template for “too big to fail” corporate rescues built around deep concessions by workers), and the Reagan administration’s determination to “zap labor” into submission–labor’s bargaining power collapsed. The consequences are driven home by the two graphs below….

Unions and Shared Prosperity, 1920-2010

Unions and Inequality, 1979-2009

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