Date of Award

6-2014

Document Type

Open Access

Degree Name

Bachelor of Arts

Department

Economics

First Advisor

Younghwan Song

Language

English

Keywords

labor, union, OECD, inequality, income

Abstract

Using Current Population Survey data in the period from 1996 -2011, this paper analyzes the relationship between labor union participation and income inequality in each of the 50 U.S. states. Since the 1970s the income gap in the United States has grown steadily and today the United States is the most unequal of all OECD countries (with the exception of Mexico and Turkey). In the past ten years alone, the disposable income for middle class families in the United States has shrank by a figure of 4 percent. In addition to rising income inequality, labor union participation has been on a downward spiral since the early 1980s as well. Today, union participation in the United States is one of the lowest of any developed country. Many past studies have explored a multitude of different factors to explain this phenomenon. The main lesson of the existing literature on this topic is that there is no single “story” or “factor” that can explain the bulk of this extraordinary trend. This paper does in fact reinforce the literature of past studies. My findings indicate that there is indeed no single “story” or factor that can explain income inequality in the United States of America. For the most part, the findings were insignificant in explaining the trend in rising income disparity in the period from 1996-2011.

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