State-Level Unionization and Working Poverty: The Importance of State Industry Composition

• In Event: 2403 - Mechanisms of Social Stratification

Abstract

Extensive prior research has focused on the importance of unions for minimizing wage inequality and poverty; recent work demonstrates unionization’s sweeping benefit for the working poor. Brady et al. (2013) assess the relationship between state-level unionization and poverty, finding that state-level unionization decreases the odds of being working poor, even for non-union households. This relationship is robust to adjustments for strength of state-level economy and social welfare generosity. However, we suggest that heterogeneous industry composition between states may be confounding the association between state-level unionization and odds of being working poor. To disentangle state and industry effects, we test if state-level unionization’s benefit varies by industry. We find that the poverty-reducing benefit of state-level unionization is heterogeneous across industries. We then decompose the change in probability of being working poor between 1994 and 2016 into the contributions made by changes in state-level unionization and changes in industry composition within states. We find that changes in industry composition contributes substantially to the overall change in working poverty rates, net of changes in state-level unionization rates.

Authors

• Elly Field, University of Michigan

• Erin Ice, University of Michigan