RISING WAGE INEQUALITY: Unionization and Inequality in the Public and Private Sectors

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In light of the diverging rates of union membership in the public and private sectors it is interesting to ask how much changing unionism has affected the inequality or wages with the two sectors. Tables 6 and 7 present some simple comparisons of union rates across different subgroups of the two sectors, while Figures 4 and 5 show union rates by predicted skill decile within each sector in 1973-4 and 1993. Perusal of these tables and figures shows that public sector union rates have risen more-or-Iess across the board for both men and women. Within the public sector union densities have risen especially quickly in the education sector. Since education comprises such a large share of public sector employment (30 percent of men and 50-55 percent of women) the spread of unionism among teachers has been a key determinant of the growth of public sector unions, accounting for about 40 percent of the rise in union membership among public sector men between 1973 and 1993, and 70 percent of the rise for public sector women.


The institutional factors controlling the process of unionization in the public sector vary by level of government (federal, state, or local), and across states within the state and local levels of government. Some states prohibit collective bargaining for some groups of state or local employees while others have adopted more or less “pro-union” legislation (see e.g. the papers in the volume edited by Freeman and Ichniowski, 1988). This variation is reflected in Table 6 by the widely different levels of public sector unionization across regions. Despite the differences in levels, the rates of growth of union membership among public sector men between 1973 and 1993 are fairly similar across regions, although the rates of growth for women are more variable. It is also interesting to compare unionization rates between the federal, state, and local levels. Since the level of government was not collected in the 1973 or 1974 CPS surveys, this is not possible for the base period, but the data for 1993 show generally higher union rates at the local level, and fairly comparable densities at the federal and state levels.

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