Unions for Financial Security
The worker protections offered through collective bargaining by labor unions can help support enhanced financial security for your clients and your community.
Greetings, Talking About Money Community, I hope you are well. 🙋🏽♀️
In this post I want to talk about unions and their impact on the financial security of working households. Union members currently account for only 10.8% American workers today, down from a high of 35% in 1954.
When I was growing up, many of the fathers in my neighborhood (and some of the working mothers) belonged to unions. The dads may have worked for utility companies or in factories. The moms may have been teachers or nurses. But these neighbors of mine enjoyed a financial stability that the generations before them may not have. The folks that I grew up around lived in modest houses (identical to the one my parents owned) yet were able to afford to own their own car, take an annual vacation, and ultimately, retire.
Furthermore, these working parents often sent their children (my classmates) to college, making them the first in their families to earn a bachelor’s degree. Not all of my classmates went to college, mind you; about half went straight into the working world, some assuming that they would follow in the footsteps of their fathers and create a middle-class lifestyle for themselves without pursuing a college degree.
But as we have seen across the country since the peak of union membership in 1979 (then 21 million workers), those union jobs and the security that goes along with them has been on the wane. I attended my high school reunion a few years ago, and scanning the room I could almost guess who had taken the road to college and who had headed directly into the working world – those who went straight to work looked tired.
At this point they were 30 years into their working lives, and most were not working in the union jobs of their fathers. They might have been waiting tables or working in retail, and physicality of their vocations showed on their bodies. These weren’t jobs that allowed for the annual vacation to rest and recharge. Instead, they were working harder and harder just to stay in the same place. I left that class reunion with a heavy heart.
But what is it about union membership specifically that allows for increased financial security? This comprehensive article by Amy Livingston on Moneycrashers.org lays it all out:
Better Wages
Apples-to-apples, union workers do earn more in wages and salaries than non-union workers for the same job. So, while some of my classmates might be performing the same tasks as their dads did a generation before them, if the union had been taken away, that classmate is most likely working just as hard for fewer dollars. This has a significant impact on a worker’s ability to attain and maintain a middle-class lifestyle. Housing is a striking example, as median home prices have increased 121% nationwide since 1960, while median household incomes rose only 29%. This leaves more and more workers unable to achieve the American Dream of homeownership.
Better Benefits
Amy Livingston lists the most common employee benefits extended to union workers to include:
Access to employer-sponsored health insurance
Lower monthly health insurance premiums on both individual and family plans
Access to life insurance policies
Access to pensions and/or defined-contribution plans (401k’s and 403b’s)
How many of your financial capability clients have all three of these through their employer: health insurance, life insurance, and a retirement plan? Not many, would be my guess.
Unions tend to fight for not only higher wages but for also better employee benefits. And in a society where working parents must go it alone to raise their children (with middle class families spending 14% of their earning on childcare and lower-income households paying upwards of 35%), having union protection for life-enhancing benefits can be a godsend.
Better Working Conditions
All in all, unions have fought for better working conditions for their members. This includes health and safety provisions, for sure, but also limits on mandatory overtime and just-in-time scheduling that wreaks havoc with worker’s childcare and transportation plans. And if watching what “essential workers” had to go through during the Covid-19 pandemic is any indication, having union protections for workers may have led to greater safety and less burnout for those workers in distribution centers or grocery stores or nursing homes who we so heavily relied upon.
Greater Job Security
Workers without union protection are typically hired “at will,” meaning that their boss can let them go at any time, for any reason. Conversely, union members usually can only be fired “for cause” for not adequately performing the job functions or for breaking the rules. Have you had clients who were afraid to advocate for themselves or “rock the boat” for fear that they would be out of a job? Have you had clients who lost their jobs without fair notice and were left to scramble to pay their bills? Union protection could help abate this.
Greater Upward Mobility
The children of union members tend to do better in life than the children of non-union members, including greater educational attainment and slightly better health. I estimate that about half of my high school classmates attended college, while at the same time I can count on one hand the number of dads in my neighborhood who held a bachelor’s degree. The others had the support and protection of union membership that gave them the stability to create a middle-class lifestyle for their families, and ultimately the ability to send their children to college. And those same college grads were the ones who didn’t look so tired at my high school reunion.