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US Union Jobs Taking a Back Seat to Non-Union Jobs

Over the past year, overall compensation for workers with non-union jobs is rising more than for those represented by a union. The total wage and benefit costs for private industry in the 12- month period ending in June 2022 increased more for non-union workers. Wages and salaries for non-union workers rose 6%, compared to 3.4% for those in unions. The Bureau of Labor and Statistics released their Employment Cost Index report for June. Below are some statistics on union versus non-union wages, benefits, and cost indices.

Employment Cost Index for the past 12 months ending June 2022

Employment Cost Index chart

The employment cost index (union and non-union) for total compensation and wages and salaries for private industry workers in Illinois, Indiana and Wisconsin rose from 3.8% to 5.1% from March 2022 to June 2022.

The following graph represents the trends in compensation percent changes from 2018 through June 2022. Note that the non-union compensation has risen dramatically, and the union compensation has remained steady.

Compensation In Private Industry by Bargaining Status chart

 

Employers use these indices to evaluate the labor market and the amount of raises they can hand out each quarter. Therefore, it is considered an ‘inflationary tailwind’ when the Employment Cost Index exhibits a steepening trend line or a greater than expected increase for a given period. In addition, as inflation increases, yields and interest rates also rise, resulting in a decrease in bond prices.

Economists view the employment cost index as a best gauge of labor costs. Rising wages and benefits are one of the factors companies say are leading them to raise their prices. Some economists are worried about a wage price spiral that will keep inflation pressures firm, if not rising, from the 40 year high of 8.5% annual rate in March 2022.

Robb, Greg.(2022). U.S. employment costs accelerate in first quarter, adding to inflation worries. Market Watch. https://www.marketwatch.com/story/coming-up-u-s-first-quarter-wage-data-unlikely-to-bring-relief-to-those-fretting-about-inflation-11651233683.

Chen, James. (April 2022). Employment Cost Index. Investopedia. https://www.investopedia.com/terms/e/eci.asp.

Tanzi, Alex. (July 2022). US Union Jobs Are Taking A Back Seat to Non-Union in Pay: Chart. Bloomberg
Law. https://news.bloomberglaw.com/daily-labor-report/us-union-jobs-are-taking-back-seat-to-non-union-in-pay-chart

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