The union wage premium also varies significantly by gender. In 2014, females received a slightly higher wage premium than men. The premium for females was 14.9 percent and for males, 13.8 percent. But from 2004 to 2009, the union wage premium for men was roughly half of that for women.

For both genders the union wage premium has decreased since 1985. It fell by 26 percent for women and 29 percent for men from 1985 to 2014. Graphic 3 displays these results in full.

The pattern of change in union wage premiums for females versus males from 1985 to 2014 deserves some attention. As seen in Graphic 3, the female wage premium has had a much more stable and gradual decline between 1985 and 2014. In contrast, until 2009, the male wage premium experienced a much sharper decline. In 2009, the male wage premium was only 7.8 percent, which was 60 percent below its 1985 value and roughly half the female wage premium. The male wage premium then rebounded to 13.2 percent in 2010 and has hovered around that figure ever since.

Graphic 3: Average Union Premium by Gender, 1985-2014

Graphic 3: Average Union Premium by Gender, 1985-2014 - click to enlarge

Source: U.S. Census Bureau Current Population Survey. All figures are statistically significant at the 0.05 level.

The recent growth in the average male union wage premium may be explained in part by the impact of the Great Recession. In a paper published by the Mackinac Center for Public Policy in 2011, I illustrated that union and nonunion companies deal with economic downturns differently. Union companies are more likely to turn to layoffs rather than wage cuts, compared to nonunion companies. Given the common use of seniority-based layoff decisions in union companies, these layoffs disproportionately affect lower-paid, junior union members. If this is the case, we would expect the data to show that the measured union wage premium had risen during an economic downturn. The relatively lower-paid union members are laid off while the senior, higher-paid union members remain at their original pay. At nonunionized companies, all workers, including most senior ones may have to take a pay cut.

Employment data seems to support this explanation. According to the Bureau of Labor Statistics, unionized employment in the durable goods manufacturing industry — a sector dominated by male workers — fell by 20.4 percent in 2009.[*] In contrast, nonunion employment fell by only 12.3 percent. As seen in Graphic 2, the union wage premium in durable goods manufacturing was essentially zero in 2009 (following a steady decline from 1990), but then rebounded to 11.1 percent in 2010. These factors may help explain the recent rise in average union premium in this sector and for male workers in general.

Graphic 4: Composition of Industries by Gender, 2014

Composition of Industries by Gender, 2014 - click to enlarge

Source: U.S. Bureau of Labor Statistics

As seen in Graphic 2 above, union wage premium declined from 1985 to 2014 in the construction, durable and nondurable goods manufacturing, wholesale and retail trade, and transportation and warehousing industries. Graphic 4 illustrates that all these industries are male dominated, save the retail trade industry, which is roughly evenly split between men and women. The only industry that did not see a decline in the union wage premium during this time, and in fact saw a gain, is the education and health care industry. This is a female-dominated industry, which may help explain why the union wage premium for females did not experience as sharp of a decrease as it did for males.


[*] “See the BLS union membership data, available at: https://goo.gl/ivrjt.