November 03, 2022
Union representation is associated with significant gains for Hispanic workers in the US. Between 2016 and 2021, the median hourly wage (in 2021 dollars) for Hispanic workers represented by unions was $25.16, compared to $16.56 for those not represented by unions. Hispanic workers represented by unions were also more likely to have employer-sponsored health insurance and retirement benefits than Hispanic workers without union representation (Figure 1). Three-quarters of union-represented Hispanic workers had employer-sponsored health insurance, while just over two-fifths of nonunion Hispanic workers did. Hispanic workers with union representation were also more than twice as likely as their nonunion counterparts to have employer-sponsored retirement benefits.
Among Hispanic workers between the ages of 18 and 34, the median hourly wage for union workers was $21.92, compared to $15.48 for nonunion workers. Those with union jobs were also more likely to have employer-provided health insurance (71.2 percent vs. 35.2 percent) and retirement benefits (57.3 percent vs. 17.4 percent). While union representation conferred advantages for young workers of all ethnicities, the effects were especially pronounced for young Hispanic workers.
Because union workers may be more likely to possess other traits associated with higher earnings and increased benefit coverage, it is difficult to know whether or to what extent wage and benefit disparities are attributable to union representation simply by comparing union and nonunion workers. The application of standard regression techniques to control for systemic differences between union and nonunion workforces can provide a better understanding of this link.
The results of this analysis show that, after adjusting for potential confounders, union representation was associated with substantial wage and benefit premiums for Hispanic workers. The regression-adjusted union wage premium for Hispanic workers was 18.9 percent. This translates to a union pay raise of $3.13 per hour, for a regression-adjusted median hourly wage of $19.69. The union wage premium for Hispanic workers was more than double the premium for non-Hispanic white workers. Among Hispanic workers, union representation was also associated with regression-adjusted coverage premiums of 26.3 percentage points for employer-sponsored health insurance and 27.1 percentage points for employer-sponsored retirement plans.
Regression-adjusted union wage and benefits premiums were even more pronounced for young Hispanic workers. Among those ages 18 to 34, Hispanic workers enjoyed a larger union bonus than workers from any other racial or ethnic group. The regression-adjusted union wage premium for young Hispanic workers was nearly 20 percent, representing a $3.03 hourly increase and a median wage of $18.51 per hour. Union representation was also associated with a 77.4 percent increase in employer-sponsored health insurance and a 170.5 percent increase in employer-sponsored retirement plan coverage for these workers.
Unionization also appears to reduce ethnic compensation disparities. As Figure 2 shows, union representation was associated with narrower benefits gaps between Hispanic workers and non-Hispanic white workers. The difference was especially striking for health insurance benefit coverage, where the regression-adjusted white-Hispanic gap shrunk by more than a factor of three with union representation.
The Hispanic-white benefit gap reductions among union workers were even more striking for those under the age of 35 (Figure 3). The percentage point gap in employer-sponsored health insurance coverage was reduced by more than a factor of four and the percentage point gap in employer-sponsored retirement coverage was nearly eliminated. The dollar gap in wages was also cut by over a third (not shown).
Unfortunately, the union coverage rate for Hispanic workers lags even the historically low overall rate. This analysis demonstrates the substantial improvements Hispanic workers may enjoy should union representation increase. The inadequacies of the US’ predominantly employment-based insurance system aside, increases in benefit coverage are particularly salient in light of the disproportionate impact of Long COVID on the Hispanic community.
Unions have traditionally acted as a bulwark against inequality and a means to increase worker power. As we take stock following Hispanic Heritage Month, it is clear that removing obstacles to union organizing should continue to be a priority for the Hispanic community and the US as a whole.
Calculations are based on the author’s analysis of public-use microdata from the Current Population Survey Outgoing Rotation Group (CPS ORG) and Annual Social and Economic Supplement (CPS ASEC). For survey years 2016–2021, health and retirement coverage refer to 2015–2019, while wages refer to 2016–2021. Union refers to union coverage and representation and thus includes both union members and non-members who are represented by a union. Wage data include overtime, tips, and commissions and exclude imputed values. Health insurance indicates that the person is a policyholder for an employer-sponsored plan. Shares omit those with employer-sponsored health insurance through someone outside of their household. Retirement plan refers to an employer-sponsored plan with or without employer contribution.
Regressions include controls for age, age squared, education (less than high school, high school, some college, bachelor’s degree, and advanced), gender, state, citizenship, and major occupation and industry. The wage regressions use ordinary least squares and the health and retirement regressions are probit marginal effects. Union wage premiums in percent are converted from log points by taking the antilog of regression coefficients and subtracting one. Union health insurance and retirement coverage figures are percentage point (p.p.) increases associated with union representation. All regression results are significant at the one percent level.