PI Original Ellyn Fortino Thursday March 3rd, 2016, 4:06pm

Can Unions Affect The Economic Mobility Of Children? One Recent Study Says Yes.

Progress Illinois takes a look at the findings of a Center for American Progress study showing that "economic mobility and union membership go hand in hand." 

New research shows there is a positive correlation between unions and the economic mobility of children, as those who grow up in regions with higher unionization, as well as those living in union households, tend to have better economic outcomes in the future.

The study from the Center for American Progress (CAP), co-authored with economic experts from Harvard University and Wellesley College, claims to be the first to examine the relationship between union membership and intergenerational mobility.

It found that "mobility thrives in areas where unions thrive."

"Our research shows that economic mobility and union membership go hand in hand," said study co-author David Madland, CAP's managing director of economic policy. "Mobility is greater not just for children whose parents are members of a union, but even for people who merely live in areas where union membership is strong. When policymakers talk about an agenda to build an inclusive economy, it's clear that policies to strengthen unions and collective bargaining must play a central role in that discussion."

The study, which controlled for tax progressivity and other factors, revealed a 10 percentage point increase in a geographic area's unionization rate is "associated with low-income children climbing 1.3 points higher in the national income distribution."

Researchers say the study's findings are significant.

"This relationship between unions and the mobility of low-income children is at least as strong as the relationship between mobility and high school dropout rates -- a factor that is generally recognized as one of the most important correlates of economic mobility," the report reads. "Indeed, union density is one of the strongest predictors of an area's mobility. Furthermore, unions remain a significant predictor of economic mobility even after one controls for several variables including race, types of industries, inequality and more."

Additionally, researchers found that a 10 percentage point rise in union membership coincided with a 4.5 percent increase in the future income of all children in a region. They reached that finding after controlling for the income of the children's parents and other factors.

In explaining potential reasons why areas with greater union density demonstrate higher mobility, researchers noted some more straightforward explanations: "Union workers make more money than comparable nonunion workers-- what economists call the union premium -- and when parents make more money, their children tend to make more money."

But they also pointed out that unions tend to push for policies helpful for working people overall, including minimum wage raises and increased spending on public schools and services.

"While the benefits of union membership for workers are already well-known, our analysis establishes that unions also benefit the children of workers," said CAP policy analyst and study co-author Brendan Duke. "These findings are new, but they should not be surprising given the wealth of evidence that has demonstrated time and again that unions increase economic opportunity--especially for the middle class."

To be clear, the study does not prove that unions are causing more mobility. Rather, it shows that unionization is among the factors strongly correlated with mobility. 

"[T]he hope is that these findings will trigger further research into whether a causal relationship between unions and intergenerational mobility exists," the experts wrote.

The study further showed that children in union households, especially those with lower-skilled parents, tend to have better economic outcomes than those in nonunion households.

For example, the average income among children with parents who did not graduate college is 16 percent, or $6,300, greater for children with a union parent than children with nonunion parents, according to the study.

The experts said their findings coincide with other research showing that the decline in unionization has been a key reason why the nation has experienced such high levels of income inequality, which can stifle economic growth.

"The fact that the effects of unions in raising the well-being of members extends to their children tells us that the ongoing decline of unions will make it harder and harder for the United States to reduce inequality and maintain a strong middle class in the future," added report co-author Richard Freeman, the Herbert Ascherman Chair in Economics at Harvard University. "Given the current weakness of unions, the United States desperately needs a rejuvenated union movement or, if that is not possible, some new form of worker organization to play the union role of reducing inequality and opening doors for workers and their families."



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