New Wage Data Shows When Workers Organize and Fight 'It Pays Off—Literally'

A new analysis shows that unionized workers across the United States secured historic wage increases under contracts negotiated last year, further demonstrating the power of collective bargaining.

According to Bloomberg Law, 2023 union contracts "gave workers an average first-year wage increase of 6.6%"—the highest raise since at least 1988.

"With signing bonuses and other lump-sum payments added to the calculations," the outlet added, "2023's average first-year wage increase was 7.3%, also a record high, according to Bloomberg Law's latest Quarterly Union Wage Data report."

The AFL-CIO, the largest federation of unions in the U.S., highlighted the findings on social media Thursday, writing, "When we fight together, it pays off—literally."

It's well-established that unionized workers are paid more and receive better benefits than nonunion employees. A Treasury Department study released last year estimated that unions boost their members' wages by 10-15% and "improve fringe benefits and workplace procedures such as retirement plans, workplace grievance policies, and predictable scheduling."

But unionization also benefits nonunion employees—as shown by the United Auto Workers' (UAW) historic contract victories at the Big Three U.S. automakers last year.

After the UAW secured record wage gains in their contracts with Ford, General Motors, and Stellantis following a six-week strike, several nonunion car manufacturers—including Toyota and Tesla—announced pay increases for their employees in an apparent attempt to preempt organizing efforts in their factories.

Overall, according to the Bureau of Labor Statistics (BLS), U.S. union membership grew by 191,000 workers in 2023—but the share of employees represented by a union fell slightly as strong job growth outpaced organizing efforts.

The Economic Policy Institute (EPI) noted in its analysis of the BLS figures that the share of nonunion workers who would like to have a union at their workplace is far higher than the share who actually have union representation," a testament to the effectiveness of corporate union-busting campaigns and the need for much stronger federal labor laws.

Between 1979 and 2017, EPI has estimated, the median U.S. worker lost out on $3,250 in pay per year due to the decline in unionization during that period.