Unions and moral economies: An investigation into cultural pathways linking union decline to rising income inequality, 1983–2018

Abstract

Declines in union density explain a considerable portion of rising US inequality among unionized and non-unionized workers. However, how union density regulates non-union wages is mainly speculative. I test the moral economy hypothesis that union density reduces inequality, in part, by fostering egalitarian wage norms that regulate compensation practices and redistributive policies. Variance function regressions suggest that wage norms may explain 12% of union density decline effects on rising within-group wage inequality between 1983 and 2018. Findings provide support for the moral economy perspective and an empirical foundation for the causal relationship between unions and inequality.