You may often read or hear that union members earn more than non-members. This is often called the union wage premium.
But how and why do union members earn more? Here we break it down.
Union members earn 32% more than non-members per week.
The evidence for union wage premium come from the Australian Bureau of Statistics, which shows that union members have median weekly earnings from their main job that are 32% more than for non-members.
Union wage premium for women
Women union members earn 32% more per week than women non-members. Additionally, the gender pay gap closes for union members; the median male non-member earns $2.70 more per hour than his female equivalent, but for union members, this difference is only $1.00.
Union wage premium for part-time workers
The median part-time union member earns 33% more per hour and 38% more per week than the median part-time non-member. That suggests that members working part-time not only earn more per hour, but also get more hours of work.
Union wage premium for workers aged under 25
Union members aged under 25 earn significantly more than their peers who are not members. Union members aged 15-19 (e.g. in their first job) earn 33% more than non-members the same age. For union members aged 20-24, the earning increase is 24% more than non-members the same age.
What’s more, workers in their union continue to earn more throughout their career. This means that the longer you are a member, the more individual and collective advantages take effect, so joining your union in your first job pays off immediately and also throughout your working life
Union pay advantage by industry
The evidence from the Australian Bureau of Statistics show that industries with higher a higher proportion of workers who are union members have higher median earnings. And some of the industries with the highest proportion of union members have the largest pay advantages:
- 30.8% of workers in Education and Training are members, the highest of any industry, and the median member earns $1,500 per week, 34% more than the $1,120 taken home by the median non-member.
- More workers work in Health Care and Social Assistance than any other industry, and 23.8% of these are members. The median member in that industry earns $1,343 per week, 34% more than the $1,000 earned by the median non-member.
- Construction has lower union density at 9.9%, but the member advantage in that industry is 44% ($1,820 for members compared to $1,265 for non-members).
What’s key to remember are these two things:
Firstly, high union membership in an industry benefits all of the workers in that industry. For example, all workers in the Education and Training industry benefit from the work of union members. Secondly, union members in industries with lots of members still earn more than non-members.
Summary of Union Member Wage Premium
|Category||Union Members (medium weekly earnings)||Non-members (medium weekly earnings)||Member Advantage (medium weekly earnings)|
|Community & personal service workers||$1,200||$750||60%|
|Technicians & trades workers||$1,643.10||$1,140||44%|
Why do union members earn more?
The data from the Australian Bureau of Statistics clearly shows that union membership equals higher pay, no matter which way you cut it. This is because of a combination of the benefits of union membership
Unions help improve and protect individual members’ wages
Unions protect their members’ wages and workplace rights, and ensure they are treated fairly, such as being correctly classified and not exploited by employers.
This is especially the case where dodgy employers try to commit wage-theft against their employees.
While unions fight for decent wages and working conditions for all workers, assistance on recovering stolen wages is an example of the kind of support that primarily benefits workers who join as members.
For example, a 2021 ACTU study into wage-theft (such as unpaid overtime, withheld entitlements, or being paid under the legal minimum including penalty rates) found that 80% of workers who sought assistance from their union were able to recover the full amount owed to them. This was higher than for those who sought help from the Fair Work Ombudsman (49%).
Another example of how unions help improve the wages of members is through reclassifications.
A common practice with many employers is to under-classify (and under-pay) workers. A classification is how workplace rules (called Awards) or workplace agreements determine how much an employee is paid according to skill level or qualifications. Each classification has specific requirements and is allocated a specific minimum wage.
Unions can help and assist members who have been under-classified to apply for reclassification and therefore be paid more. Again, this is a benefit provided by union membership that primarily benefits workers who join as members.
Union membership provides collective benefits to all workers
Unions also contribute to higher pay through collectively bargaining. Collective bargaining is where union members come together to negotiate better pay and conditions directly with their employer on behalf of all workers in a company or organisation.
Collective bargaining ensures workers get a fair share of the pie. But if all workers benefit from these agreements, why is the union member pay advantage so large?
Unions’ bargaining power comes from their members. The more members a union has, the harder it is for an employer to ignore or reject them. Every member grows that collective workers’ voice. Every worker who contributes their own perspective to their union makes that union’s case for improved conditions more compelling, authentic, and united.
Non-members might still get some benefit from the work of unions and their members, but the data shows that this benefit would be larger if they too joined the cause.
Too long; didn’t read? We also have this great video that breaks down why Union members earn more.
Earn more. Join your union.
Know your worth and join your union.
Information sourced from: Australian Bureau of Statistics (August 2020) Characteristics of Employment, Australia, ABS Website