Union members earn 26% more than non-members per week. Here’s why.

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. 

There are a variety of factors that contribute to higher wages for union members, and but when you consider this in today’s economic climate – where the cost-of-living continues to skyrocket – that 26 per cent could be the difference between filling up your car with petrol or going without breakfast for the week. 

That’s why there has never been a better time to join your union. 

But how and why do union members earn more? Let’s take a closer look. 

Union members earn 26% more than non-members per week

The evidence for union wage premium comes from the Australian Bureau of Statistics (ABS), which shows that union members have median weekly earnings from their main job that are 26 per cent more than for non-members.

Union wage premium for women

Women union members earn $346 more per week than women non-members. Additionally, the gender pay gap closes for union members: the median male non-member earns $3.60 more per hour than his female equivalent, but for union members, this difference is only $1.20.

Union wage premium for casual workers

The median casual union member earns $10.43 more per hour than the median casual non-member. If you’re a casual worker thinking of joining your union, the difference in pay means you could pay off your fees in your first hour of work for the week.

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 to 24 earn $370.90 more per week than non-members of the same age, and earn $6.76 per hour more than non-members of the same age.

What’s more, workers in their union continue to earn more throughout their career. Even union members who’ve been members for less than a year earn $109.80 more per week than non-members.  

Workers who’ve been members for one year and over earn $129.5 more than non-members, and by the time a worker has been a member for three to four years, they’re earning $198 more per week than non-members.  

All this means that the longer you are a member, the more you benefit from individual and collective advantages. In other words, 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 ABS shows that industries with 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 per cent of workers in Education and Training are members, the highest of any industry, and the median member earns $11.04 per hour more than the median non-member.
• More workers work in Health Care and Social Assistance than any other industry, and 20 per cent of these are members. The median member in that industry earns $9.60 per hour more than the median non-member.
• Construction has lower union density at 9.7 per cent, but the member advantage in that industry is 39 per cent, or $533.40 per week ($1,900 for members compared to $1,366.60 for non-members).

What’s key to remember are these two things: 

1. 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.
   
2. Union members in industries with lots of members still earn more than non-members.

Why do union members earn more?

The data from the ABS clearly shows that union membership equals higher pay, no matter which way you cut it. This is due to a combination of union membership benefits.

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.

Wage-theft

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 per cent 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 per cent).

Reclassifications

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 an advantage of union membership that primarily benefits workers who join as members.

Union membership = collective bargaining power

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 is usually formalised in the form of an Enterprise Bargaining Agreement (sometimes called Enterprise Agreement or Collective Bargaining Agreement). These agreements must be registered and approved by the Fair Work Commission before they come into effect, and they remain in place until they expire or are terminated.

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 the members. The more members in a union, 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.

Since July 2022, The Fair Work Commission (FWC) has publish statistical reports each fortnight, providing data on Enterprise Agreements which have been lodged and approved by the FWC in that time.

This data consistently shows that union-backed EBAs (that is, EBAs which have been negotiated by union members) consistently deliver higher wages than non-union EBAs.

The evidence is clear: whichever way you look at it, the key to higher wages is to join your union.