Evidence shows collective bargaining—especially with the ability to strike—raises teacher pay

Lawrence Mishel

Lawrence Mishel Fellow, EPI

Some recent media reports on a new academic study by political scientist Agustina S. Paglayan give the impression that the paper’s findings reflect badly on teachers unions. This is a misreading, however, of the study and of its implications. A key issue lost in the press accounts is that the study is, first and foremost, an historical analysis, examining the effects of the expansion of state collective bargaining rights for teachers between 1959 and 1990. Given the historical focus, the study excludes the experience of the last three decades, where the evidence clearly suggests that collective bargaining raises teachers pay.

But, even with respect to just the historical period studied, the paper’s conclusions are much more nuanced than the press reports suggest. A central conclusion, which has been overlooked in media accounts, is the author’s view that the reason that teachers unions might not have been effective in raising expenditures on education (including teachers’ pay) in the early days of expanding collective bargaining rights is because the laws that allowed collective bargaining often simultaneously restricted the ability of public-sector unions to strike. What the law gave with one hand, it often took back with the other. To illustrate the point, the paper shows that in states where public-sector workers had both the right to collective bargaining and the right to strike, collective bargaining did appear to increase expenditures on education.

More recent evidence on the effect of unions on teacher pay

Any analysis of unionized public-sector teachers’ pay needs to separate out two points of comparison: one is a comparison of teachers’ pay with what similar workers earn in the private sector; the other is a comparison between what unionized and non-unionized teachers earn in the public sector.

 

Economist Sylvia Allegretto and I have demonstrated that since the mid-1990s a substantial penalty has emerged for public school teachers relative to similar workers in the private sector. In 1994, teachers’ wages were about 2 percent below those of comparable workers in the private sector. By 2015, teachers’ wages were about 17 percent below similar workers in the private sector. This wage gap was partially offset by improved benefits, but there was still a record “total compensation” gap of 11 percent in 2015. At the same time, we also found that, “Collective bargaining helps to abate the teacher wage gap. In 2015, teachers not represented by a union had a 25.5 percent wage gap—and the gap was 6 percentage points smaller for unionized teachers.” This suggests that teacher unions may have had a more substantial impact in the last few decades than what Paglayan found.

Two other recent papers also conclude that teachers unions do moderately raise wages and benefits and thereby lessen the pay penalty that teachers face relative to comparable workers in the private sector. A February 2018 report for EPI by Jeffrey Keefe, “Pennsylvania’s teachers are undercompensated—and new pension legislation will cut their compensation even more” notes that prior research indicates:

More than three-quarters of teachers today (including more than 70 percent of new teachers) say that, absent the union, their working conditions and salaries would suffer. A majority of teachers also agree that without the union they would be more vulnerable to school politics and would have nowhere to turn in the face of unfair charges by parents or students. Fully 84 percent say their union protects teachers through due process and grievance procedures, with 71 percent of teachers giving “excellent” or “good” ratings to their unions. Union teachers were found to be more enthusiastic about teaching and less likely to leave for better-paying jobs.

Keefe conducted his own analysis of Current Population Survey Outgoing Rotation Group (CPS-ORG) data for the years 2013 to 2015 to examine the union impact on pay. Specifically, Keefe compared the weekly earnings of union and nonunion teachers across the United States with controls for education, experience, gender, race, ethnicity, marital status, disability, citizenship, region, weeks worked per year, and weekly hours of work. He found that union membership, on average, resulted in “5.1 percent higher wages and 5.4 percent higher total compensation for its members when compared with the compensation of public school teachers who are not union members.”

Separately, Allegretto and Tojerow, in Teacher staffing and pay differences: public and private schools, published in Bureau of Labor Statistics’ Monthly Labor Review, provide estimates of the union impact on teacher pay between 1996 and 2012. They pooled Current Population Survey data to estimate pay gaps for four teacher groups: unionized public sector teachers, unionized private sector teachers, nonunionized public sector teachers, and nonunionized private sector teachers. Their results, therefore, “compare teacher pay relative to that of comparable workers and among the four teacher groups.” Allegretto and Tojerow use traditional human capital controls plus employ year and state fixed effects.

They find:

Results indicate that the pay gap between nonteacher workers and similar unionized public school teachers is -13.2 percent while it is -17.9 percent for nonunionized public school teachers. The gap for unionized private school teachers is -26.2 percent, compared with -32.1 percent for the more likely situation of nonunion private school teachers. Thus, unionization helps to mitigate the teacher pay gap with nonteacher workers for both sectors.

And:

For female public sector teachers, the pay gaps with female nonteacher workers are -7.2 percent for union workers and -14.2 percent for nonunion workers; for the male sample of public sector teachers, the corresponding pay gaps with male nonteacher workers are -24.6 percent and -26.8 percent.

Allegretto and Tojerow’s results indicate that teacher unionization lifted wages in the public sector by 4.7 percent (17.9 percent less 13.2 percent) overall, by 7.0 percent among female teachers (14.2 percent less 7.2 percent) and by just 2.2 percent for male public school teachers (26.8 percent less 24.6 percent). Consistent with what Allegretto and I found in our earlier study, these results demonstrate that the teacher wage penalty was smaller for teachers in unions.

The role of strikes

Media attention has focused on the finding that the expansion of public-sector collective bargaining between 1959 and 1990 was not associated with increases in expenditures on education over and above pre-existing trends. But, the paper explains these results by arguing that many states granted collective bargaining rights and, at the same time, severely restricted new unions’ legal ability to strike. In Paglayan’s view, state collective bargaining legislation “often contain[ed] both pro- and anti-union provisions” (p. 30, emphasis in original). Restrictions on strikes, in her view, had a substantial impact on the way teachers unions affect state expenditures on education. In summarizing her findings, Paglayan writes: “…many mandatory bargaining laws contained provisions designed to limit unions’ ability to strike…[and] laws that did not contain these provisions did lead to increased education spending.” Paglayan’s own assessment of her findings is not that collective bargaining failed to increase educational expenditures, but rather it was the lack of collective bargaining coupled with the legal right to strike that limited teachers ability to help to direct additional resources to state educational budgets.

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Reposted from EPI

Posted In: Allied Approaches

Union Matters

Federal Minimum Wage Reaches Disappointing Milestone

By Kathleen Mackey
USW Intern

A disgraceful milestone occurred last Sunday, June 16.

That date officially marked the longest period that the United States has gone without increasing federal the minimum wage.

That means Congress has denied raises for a decade to 1.8 million American workers, that is, those workers who earn $7.25 an hour or less. These 1.8 million Americans have watched in frustration as Congress not only denied them wages increases, but used their tax dollars to raise Congressional pay. They continued to watch in disappointment as the Trump administration failed to keep its promise that the 2017 tax cut law would increase every worker’s pay by $4,000 per year.

More than 12 years ago, in May 2007, Congress passed legislation to raise the minimum wage to $7.25 per hour. It took effect two years later. Congress has failed to act since then, so it has, in effect, now imposed a decade-long wage freeze on the nation’s lowest income workers.

To combat this unjust situation, minimum wage workers could rally and call their lawmakers to demand action, but they’re typically working more than one job just to get by, so few have the energy or patience.

The Economic Policy Institute points out in a recent report on the federal minimum wage that as the cost of living rose over the past 10 years, Congress’ inaction cut the take-home pay of working families.  

At the current dismal rate, full-time workers receiving minimum wage earn $15,080 a year. It was virtually impossible to scrape by on $15,080 a decade ago, let alone support a family. But with the cost of living having risen 18% over that time, the situation now is far worse for the working poor. The current federal minimum wage is not a living wage. And no full-time worker should live in poverty.

While ignoring the needs of low-income workers, members of Congress, who taxpayers pay at least $174,000 a year, are scheduled to receive an automatic $4,500 cost-of-living raise this year. Congress increased its own pay from $169,300 to $174,000 in 2009, in the middle of the Great Recession when low income people across the country were out of work and losing their homes. While Congress has frozen its own pay since then, that’s little consolation to minimum wage workers who take home less than a tenth of Congressional salaries.

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A Friendly Reminder

A Friendly Reminder