Education Isn’t The Key To A Good Income

Education Isn’t The Key To A Good Income.

This article is the result of a series of research papers conducted on the American dream and upward mobility. There are strong reasons to believe that unions may increase opportunity. First, there are the direct effects that a parent’s union membership may have on their children. Union workers make more money than comparable non-union workers—what economists call the union premium—and when parents make more money, their children tend to make more money—which economists refer to as the intergenerational earnings elasticity. In theory, unionised parents should pass on a portion of the union premium to their children. There may be other channels through which children whose parents were in a union have better outcomes than other children: union jobs may be more stable and predictable, which could produce a more stable living environment for children, and union jobs are more likely to provide family health insurance. But there are also a series of other ways that unions could boost intergenerational mobility for non-union workers. It has been shown that unions push up wages for nonunion workers, for example, and these wage gains for nonunion members could be passed on to their children. Children who grow up in non-union households may also display more mobility in highly unionised areas, for example, because they may be able to join a union when they enter the labor market. Finally, unions generally advocate for policies that benefit all working people—such as minimum wage increases and increased expenditures on schools and public services—that may especially benefit low-income parents and their children. A recent study on interest groups and political influence found that most of the national groups that supported middle-class priorities were unions. Another study found that states with higher union density also have higher minimum wages. In short, there are many theoretical reasons to expect unions to go hand in hand with economic mobility, and this paper provides empirical evidence that this is indeed the case. Credit: Richard Freeman, Eunice Han, David Madland, and Brendan Duke for Center for American Progress.

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