Union wage premiums are one of the most researched and analyzed issues in labor economics.
[1] The modern scholarly consensus is that unions tend to be associated with higher wages, greater levels of benefits like health care and paid time off, and improved workplace protections.
[3] This union premium wage gap can be interpreted as the adaptations to globalization, technological, and demographic changes.
[3] Another argument for this gap between union and non-union wages is the competition between the wages including a foreign competitor, different workplace improvements to enhance productivity, safety in the workplace, and other interests of the workers.
[5] Similarly, import penetration would cause the union to insulate the wages for a period of time.
[3] Another study done on union wage premiums attributes this narrowing of this gap to labor markets strengthening with time.
[7] Thus this strengthening depends on the actual and expected inflation of the union workers who are covered by their cost of living adjustments.
Most economist and labor studies on union wage premiums estimate a difference of about 15%.
[1] In some instances union presence in the firm can be associated with 3 to 9 percentage lower net income on assets for the firm but the opposite effect occurs when union density or size is lower.
As well as with larger wages these workers have more purchasing power and their household incomes also increase, thus this wage premium not only affects their budget line but also their household budget line.
Another study also backs up the emphasis of importance of wage union premiums among pay structures, especially with the wages of the lowest paid having an effect on pay differentials among gender, ethnicities, health, and different types of occupations.
[5] Thus although unions have become smaller in size and participation among the different worker sectors throughout time, those that have survived are more apt and able to negotiate and demand a higher wage premium from their firms and businesses.
[7] There were also changes through time of the union wage premium among different groups in the labor market.
[5] Through studies and figures it was shown that the wage premium was largest in the least skilled for both males and females.
is a vector of control variables (education, experience, gender, marital status, part-time work, census divisions, and twelve occupations).