Giving Compass' Take:

• Equitable Growth impresses upon readers the importance of reviving unions for better wages and working conditions across the United States.

• Reviving unions would have benefits for all workers, regardless of labor affiliations. Are you prepared to help convince legislators of the importance of unions?

• Not everyone feels the same way. Read a counterargument to the importance of reviving unions in the United States.

Unions in the United States have long been one of the most powerful institutions through which workers achieved higher pay and better working conditions.

Over the past 40 years, the power of organized labor has declined alongside a steep rise in income inequality, the erosion of labor standards, and employers’ ability to dictate and suppress wages.

Yet unions still play an important role in shaping U.S. labor market outcomes, helping both union and nonunion members share in the economic value they create.

The first set of facts about the importance of unions is that they benefit all workers. Union members have higher wages than their nonunionized peers—what researchers call the union wage premium—but organized labor helps create conditions that make all workers better off.

The second set of facts show that workers are eager to join unions. U.S. labor law and a business environment antagonistic to organized labor prevent many workers from joining a union, yet public attitudes toward the U.S. labor movement have become increasingly positive over the past 30 years.

The third set of facts demonstrates why unions can offset employers’ wage-setting power. The decades-long decline in union density has limited workers’ ability to push back against what economists call monopsony power: firms’ ability to use their market power to dictate and suppress earnings.

Unions can counteract monopsony power by limiting firms’ ability to extract “rents” from workers, where rents are defined as employers’ capacity to pay workers less than the value of what they produce. To do so, however, unions need the support of legislation that protects the right to organize, enforcement of regulation that prevents workplace abuses, and policies that allow collective action such as strikes.

Read the full article about reviving unions at Equitable Growth.