One of Twenty Facts About U.S. Inequality that Everyone Should Know

Deregulation of the Labor Market

The percentage of all wage and salary workers who are union members has declined from 24% in 1973 to 12.4% in 2008. The decline in the private sector was steeper than the decline in the public sector. At the same time as union membership declined, the real value of the minimum wage also fell by 25% in the 1980s, leading to a weakening influence of the minimum wage on the low-wage labor market. These two developments in combination may be understood as the foundation of the newly “deregulated” U.S. labor market.

Private-sector union membership and real minimum wage, 1973-2008

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Source: Barry T. Hirsch and David A. Macpherson. Union Membership and Coverage Database from the CPS. See http://www.unionstats.com; http://www.census.gov/compendia/statab/cats/labor_force_employment_earnings/compensation_wages_and_earnings.html