A secure middle class depends not only on workers earning fair and stable incomes but also on their ability to sufficiently save for the future. When families live paycheck to paycheck, unexpected sickness or layoffs can spark years of compounding hardships. But when families can build up savings, they not only are able to prepare for such emergencies but also to plan to buy a home, send their children to college, start a business, or switch to a career better suited to their skills and needs, all of which help ensure an economically more secure future.
A new Center for American Progress Action Fund analysis of data from the Federal Reserve’s Survey of Consumer Finances, or SCF, shows that unions can play a role in increasing wealth for middle-class Americans. Union members generally have higher wages and better benefits than nonunion members, but these things alone do not explain why union members have more savings relative to their incomes than nonunion members. It is possible that stable union jobs that offer access to training and career opportunities make it easier for middle-class families to plan for their future and thus increase their savings. In that sense, union membership can create a virtuous cycle for middle-class stability.The above excerpt was originally published in CAP Action.