Unions Raise Worker Wellbeing

Yves here. One of the reasons for unions historically getting a bad rap may have been spurious correlation. I haven’t read the underlying studies from the early 1980s cited in this short piece, but they apparently found, among other things, “Unions attracted the least satisfied workers.” It goes on to underscore the notion that these employees were malcontents, and organizing increased their unhappiness by putting a focus on their grievances.

Huh? How about, “Unions attracted workers who suffered from the worst workplace conditions.”

By Richard Freeman, Herbert Ascherman Chair in Economics, Harvard University, David Blanchflower, Bruce V. Rauner Professor of Economics, Dartmouth College and Alex Bryson, Professor of Quantitative Social Science, Social Research Institute, UCL. Originally published at VoxEU

Things have been going badly for workers, but for many years their traditional representatives in the workplace – trade unions – have been on the back-foot. This column revisits the association between unionisation and job satisfaction, and finds that while in the past union workers used to have lower job satisfaction than their non-union counterparts, union membership now raises wellbeing at work. The study suggests that unions do the same as they always did – it is the non-union world that has changed for the worse. There is evidence of this sparking a growth in unionisation in the UK over the last three years.

Economies around the world have taken some big hits recently – first the Great Recession and now the COVID pandemic – leaving workers facing wage stagnation, job insecurity and now potential mass unemployment.  But for many years their traditional representatives in the workplace – trade unions – have been on the back-foot.  With membership rates falling, their influence in government circles has dwindled.  But that maybe about to change.  The OECD (2019) has been emphasising the value of collective bargaining as a solution to current economic problems, while in countries like the UK union membership has crept up in the last three years (albeit very gradually) (Office for National Statistics 2020)

It is almost four decades ago when one of us (Freeman) and James Medoff asked the question: What do unions do?  There were two things: bargain for better wages and conditions (the ‘monopoly face’) and represent workers’ concerns to management (the ‘voice’ face).  Richard Freeman (1978, 1980) – together with George Borjas (1979) – presented empirical evidence that affected both the way workers felt and their behaviours.  Although unions raised wages above market levels, they found unionisation was linked to lowerworker job satisfaction.  Freeman and Medoff (1984) suggested four possible reasons for this:

  • Unions attracted the least satisfied workers. It was costly joining a union, so only those with something to gripe about, or those with an underlying tendency towards dissatisfaction, would join.
  • Unions caused dissatisfaction through the process of (often) conflictual bargaining with the employer or by providing workers with information about just how ‘bad’ management was – information they may not have received in the absence of the union.
  • Unions engaged in ‘strategic’ dissatisfaction (what Freeman and Medoff termed ‘voice-induced complaining’) to strengthen their bargaining hand against the employer.
  • By improving wages and conditions, and by helping to solve problems through voice, unions lowered quit rates.  So, a worker at a given level of job dissatisfaction was less likely to quit in the presence of a union.  Ergo, the stock of dissatisfied workers would be higher in a union setting because the dissatisfaction threshold for quitting would be that much higher.

These insights spawned a multitude of empirical studies across the world in the subsequent four decades, teasing out which of the above explanations might be salient.

But few doubted the underlying negative correlation between unionisation and job satisfaction.  Until now.

In new work inspired by the seminal texts of Freeman (1978, 1980), Freeman and Medoff (1984) and Borjas (1979), we revisit the association between unionisation and job satisfaction, but this time we have far more data to play with than were available back then (Blanchflower and Bryson 2020).  The results are startling. We find positivecorrelations between union membership and worker wellbeing across a range of metrics, both in the US and Europe since the turn of the century.

For the US, using the General Social Survey we confirm the early findings of a negative partial correlation between job satisfaction and unionisation in the 20th century, but this shifts to statistical non-significance in the early part of the 21st century, before switching to a positive significant correlation in the second decade of the 21st century.

The positive correlation post the Great Recession is replicated in the US Gallup Daily Tracker Poll and is apparent for a range of wellbeing metrics. The raw correlation continues to be statistically significant, though a little smaller, when we condition on workers’ demographic traits, state fixed effects and, in our most extensive regressions, occupation, health, BMI, smoker status, and so on.

In Europe, the positive correlation between unionisation and a range of wellbeing metrics has been apparent since the early part of the new century. It is robust to controls for demographic traits and country fixed effects, and it is apparent in most large European countries despite substantial differences in the way unions bargain.

Furthermore, we find union membership is positively and significantly associated with a range of other wellbeing metrics including life satisfaction, happiness, and trust, as well satisfaction with democracy, education ,and the overall economy.  Union membership is negatively associated with depression and sadness.

That union workers have higher levels of happiness and lower levels of stress than non-union workers, and that this is true around the world in the years since the Great Recession, runs contrary to what was previously found.

The questions are: Why have things changed, and does this matter?

Union membership offers two benefits: bargaining to secure better terms and conditions, and insurance against job loss and arbitrary employer unfair behaviour. It seems reasonable to ask whether unions did these ‘jobs’ differently in recent years in a way that may have affected the wellbeing differential between union and non-union workers, or whether – if they were doing essentially the same job over time – that job was valued differently by union members such that their wellbeing benefited relative to non-union workers.

We checked the union wage premium in the US over the period 1973-2018 and found this has not changed much over time – it may have fallen a little, but not by much.  But we do find some change in terms of employee perceptions of job security as recorded in the General Social Survey. Prior to the Great Recession, union members were more likely than their non-member counterparts to say they were likely to lose their job in future, but this differential vanished post the Great Recession. So, union workers are less fearful of job loss than previously, yet they continue to receive the substantial wage premium they have always received.

A second phenomenon, unrelated to experience of the Great Recession, is uncovered when looking at union associations with job satisfaction across birth cohorts. Union members from the 1940 and 1950 birth cohorts who would have made up most of the sample in Freeman and Borjas’ studies in the 1970s express greater job dissatisfaction than their non-member counterparts even in the Gallup data for the period 2009-2013, despite experiencing a couple of deep recessions, while the union members among more recent birth cohorts had greater job satisfaction than their non-member counterparts, despite going through the Great Recession. Thus, cohorts with positive union effects over time come to dominate those with negative effects – if this continues, we may see unions increasingly associated with higher job satisfaction.

Does any of this matter? Well, yes.  First, if we equate life satisfaction and happiness with worker utility, it seems unions are linked with greater utility, suggesting unions may be welfare-enhancing.  This might spark a revival in union membership. Second, uncertainty and concern about job security was rising over this period, and remains high today, not only in the US but in Europe too. Job security has become a scarce commodity post-Great Recession (Blanchflower 2019). In these circumstances, the insurance component of the union good becomes more attractive, especially if one also continues to receive a union wage premium. This seems likely to continue to be the case in the light of COVID-19-induced impending recession and mass job loss.  Finally, the greater trust unionised workers have in democracy, the institutions of government and fellow citizens suggests they are part of the social capital that may be a force for good at a time when civic engagement is critical in solving social and economic problems.

Authors’ note: Alex Bryson thanks the Norwegian Research Council (grant no. 295914 /S20) for financial support.

See original post for references

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  1. PlutoniumKun

    Employers, large and small, always try to atomise their staff so they can deal with employees individually – this way ‘awkward squad’ employees can be eliminated or just bypassed, while more amenable individuals can given priority with promotions and good treatment. Even on a purely human and emotional level, being part of a Union with a delegated representative certainly helps those staff who are not in a position to fight their own corner.

    I’ve had a lot of experience in the past within Unions or informal workplace representative groups and in that capacity I’ve talked a lot to union refuseniks. For many, its simply ideological. They don’t like Unions, they don’t see themselves as working class, and they think that they can look after themselves. Sometimes they are right, because they sometimes get favourable treatment because of this stance. I’ve found many simply can’t their head around what Unions actually do – I’ve had lots of colleagues from small consultancies, and they genuinely think all the good things within large organisations, like sick leave or maternity time off or overtime has just fallen from the sky from our benevolent rulers. They actually say things like ‘we are so lucky to have ___’, mentioning some very hard fought for benefit.

    Another group I’ve encountered have genuine personal issues with Unions. Many left here in Ireland after the crash as they felt that professional Union organisers looked after themselves while agreeing pay cuts with employers (there is some justification to this criticism). Others have been the wrong side of negative Union tactics – as an example, I know a few social workers in hospitals here who hate the main medical unions because they feel they are over dominated by certain sectors (mostly the nurses), who have a vested interest in undermining what they see as competing groups. Again, there is some justification to this (this is precisely one reason why the Irish track and trace system hasn’t been as successful as it should have been).

    1. Palaver

      The problem of selling/negotiating someone else’s labor in aggregate is the incentive to sell it at a discount for personal kickbacks. Lack of trust is endemic.

      Unions can be run into the ground the same way corporations are run into the ground by golden parachute execs and their supreme obsession with short term stock prices.

      Honestly, investors could benefit from a union voice calling execs on the same bs.

  2. CitizenSissy

    Twenty-four year UFCW member and shop steward here. I’m the first to say unions aren’t perfect, but I enjoy a measure of security my non-unionized friends don’t. The widespread ignorance of organized labor’s role in forming the middle class makes me crazy; the mention of, for example, the Triangle Shirtwaist Fire or the Brotherhood of Sleeping Class Porters will generally draw a blank stare. Kun is absolutely correct — corporate benefits aren’t freely given largesse, but rather paid for with immense effort and, in some cases, blood.

    1. Pat

      That history is two pronged. Ignoring the rise and reason for unions, sometimes bloody and quite often deadly, but references to union corruption real and imagined are in abundance.

      Sadly, being ambitious enough to get to heading the union can often mean ambitious enough to sell it out make that easier to do than it should. But focusing on that while ignoring history and facts on the ground for workers And the numerous honest brokers heading locals across America has worked out for a corporate class who consider workers disposable and a problem to be solved.

  3. DJG

    I grew up in a union (extended) family. My father was a printer, which meant that his whole working life he belonged to an AFL traditional craft union. I think that the post gets some things wrong–largely because it doesn’t distinguished between craft unions and industrial unions. The craft unions have a tradition of pride in work and esprit de corps (back when we used words like pride in work and esprit de corps). So the authors might be more attentive to the variations in work that the unions represent. When they talk about disaffected workers, they may want to consider just how poorly U.S. manufacturing plants and assembly lines are run (current example: the health disaster among meat cutters).

    As a writer, I still have plenty of contact with people in Equity, SAG/AFTRA, and the scenic design unions. Sometimes, they grouse–but mostly they are grateful for the union protections and the health insurance available through the unions, which sure beats ACA plans.

  4. Keith Newman

    I would like to add several points to this thread. First is that, in addition to their core function of bargaining, unions also play an important role in broad society. For instance in Canada most large unions have union human rights committees in their work places, so many thousand such committees involving tens of thousands of people exist across the country. This makes the labour movement the largest defender of human rights in the country. The committees deal with issues within the workplace but also in society in general. For instance the labour movement played a very big role in achieving equal rights for women, visible minorities, and LGBTQ rights more recently.

    In the field of health care I have been involved in a campaign to have prescription drugs covered under our public health care system for 16 years. A big leap forward occurred when the Canadian Labour Congress got on board in a big way a few years ago, organising meetings across the country with thousands of people in key locations and rallying many other organisations to the campaign. The labour movement is the only organised group in the country able to do that.

    With respect to the functioning of unions, Mr. Kun raises good points in the first comment in this thread, so I won’t say anything further except to add that different groups of workers have different interests and problems can arise as a result. In practice that means, to use Mr. Kun’s example, that nurses have different interests than orderlies, etc., and this will affect their respective demands. Even within the same worksite and with the same union these divergences exist. The interests of highly skilled workers are not the same as the least unskilled. A good union tries to balance these interests.
    I was a senior staff person in a large private sector union in Canada for 25 years and we had to deal with these issues on a daily basis.

    With respect to the issues raised in the post, I have trouble with studies that draw big conclusions from simple co-relations across large populations that have changed considerably over the 40 year period they are discussing. I have not looked at the studies themselves so perhaps they deal with my issues but nothing is mentioned in this article.
    My question: Were the workers surveyed in very similar work settings, and how have these changed over the years? An example: Were unionised paper mill workers compared to non-union paper mill workers or were they compared to public sector workers processing drivers licences? Even if they were compared to non-union paper mill workers, the non-union workplace would be heavily affected by the conditions in unionised workplaces, so how is that taken into account? Also as noted in the introduction to the article, how has the passage of time and the general decline in the number of good jobs affected the comparison? Etc, etc. etc.

  5. Synoia

    Companies get the Unions they deserve.

    Union member attitude is a direct reflection of management’s behavior.

    Here the list of causes from the article:

    Freeman and Medoff (1984) suggested four possible reasons for this:
    1. Unions attracted the least satisfied workers.
    2. Unions caused dissatisfaction through by providing workers with information about just how ‘bad’ management was.
    3. Unions engaged in ‘strategic’ dissatisfaction.
    4. By improving wages and conditions, and by helping to solve problems through voice, unions lowered quit rates. So, a worker at a given level of job dissatisfaction was less likely to quit in the presence of a union. Ergo, the stock of dissatisfied workers would be higher in a union setting because the dissatisfaction threshold for quitting would be that much higher.

    Item 4 is almost laughable. Lowering quit rates would be a measure of satisfaction.

    Management’s behavior towards workers provides a power balance between the boos, and the individual union members.

    Freeman and Medoff do not discuss the greatest source of worker satisfaction – Management’s behavior.

    My forst job after graduating was for a large UK Bank, on theer “Payroll for Customers” project. We worked 80 hours per week to meet an April deadline. met the deadline and received not ono word of tanks, or compensation for out hours worked.

    Iy was this experience where I personally realized they I needed to rethink the teachings in the UK of “Bolshie Union Workers” and reflect on how management caused the workers to become Bolshie.

    The UK class structure, and its attitudes, were a major contributors to bad Management. As in the verse from the “red flag” song:

    The working class cab kiss my a…
    I’ve go the foreman’s job at last

    I emigrated.

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