Latest Census Data Underscore How Important Unions Are for the Middle Class

Demonstrators in support of fast-food workers march toward a McDonald's, Monday, July 29, 2013, in New York's Union Square. They are demanding higher wages and the right to form a union without retaliation.

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The middle class remained historically weak last year, according to Census Bureau numbers released today, as it continued to feel the effects of a decades-long slide driven in part by the decline in union membership across the country. Last year, the middle class’s share of the nation’s total income remained stagnant at its lowest point since these data were first reported: The middle 60 percent of households took home only 45.7 percent of the nation’s income in 2012, the same percent it took home in 2011 and well below the 53.2 percent it used to take home in 1968.

Driving this decline is a stagnation of middle-class incomes that has occurred at the same time that the nation’s highest earners have seen their incomes grow dramatically. Between 1967 and 2012, the average income of the top 5 percent grew by 88.2 percent in real terms, or three times the 26.6 percent growth experienced by the middle 60 percent. Middle-class incomes grew only slowly in the 1970s and 1980s but have now been in decline for some time, with the median household income in 2012 below the level it was in 1989. There are a number of reasons for this unequal growth, including increased globalization that has undermined middle-class wages and rising returns to higher education that have disproportionately grown the pay of those at the very top.

Among the most overlooked of these factors, however, has been the decline of labor unions. As Figure 1 shows, the fall in labor-union participation since the late 1960s is highly correlated with the decline in the share of the nation’s total income going to the middle class.

Read the full column (CAP Action)