A pattern that Colin Gordon has presented in past years (2013, 2012) is that union membership density fell as the share of income going to the top 10 percent escalated. We update his chart using new data from Piketty and Saez’s analysis of tax data.

Union membership remained at 11.2 percent in 2013, though we already know that it dropped to 11.1 percent in 2014 (not shown in the figure). The share of income going to the top 10 percent hit 47.8 percent in 2012, the highest it has been since 1917 (the earliest year available in Piketty and Saez’s data). In 2013, we did see a slight drop in this share to 47.0 percent. As we noted when we reported on a similar decline in the top 1 percent’s wages in 2013, the increase in the top marginal tax rate in 2013 might have led to some shifting of income from 2013 into 2012. If this were the case, we would likely see the top 10 percent’s share of income to continue its longer-term upward trend in 2014. We also note that top 10 percent income shares in 2013 were higher than those in 2011 and represent a significant increase from the 45.5 percent share in 2009 at the start of the recovery.

Economic Snapshot Union membership and share of income going to the top 10% Year Union membership Share of income going to the top 10 percent 1917 11.0% 40.3% 1918 12.1% 39.9% 1919 14.3% 39.5% 1920 17.5% 38.1% 1921 17.6% 42.9% 1922 14.0% 42.9% 1923 11.7% 40.6% 1924 11.3% 43.3% 1925 11.0% 44.2% 1926 10.7% 44.1% 1927 10.6% 44.7% 1928 10.4% 46.1% 1929 10.1% 43.8% 1930 10.7% 43.1% 1931 11.2% 44.4% 1932 11.3% 46.3% 1933 9.5% 45.0% 1934 9.8% 45.2% 1935 10.8% 43.4% 1936 11.1% 44.8% 1937 18.6% 43.3% 1938 23.9% 43.0% 1939 24.8% 44.6% 1940 23.5% 44.4% 1941 25.4% 41.0% 1942 24.2% 35.5% 1943 30.1% 32.7% 1944 32.5% 31.5% 1945 33.4% 32.6% 1946 31.9% 34.6% 1947 31.1% 33.0% 1948 30.5% 33.7% 1949 29.6% 33.8% 1950 30.0% 33.9% 1951 32.4% 32.8% 1952 31.5% 32.1% 1953 33.2% 31.4% 1954 32.7% 32.1% 1955 32.9% 31.8% 1956 33.2% 31.8% 1957 32.0% 31.7% 1958 31.1% 32.1% 1959 31.6% 32.0% 1960 30.7% 31.7% 1961 28.7% 31.9% 1962 29.1% 32.0% 1963 28.5% 32.0% 1964 28.5% 31.6% 1965 28.6% 31.5% 1966 28.7% 32.0% 1967 28.6% 32.0% 1968 28.7% 32.0% 1969 28.3% 31.8% 1970 27.9% 31.5% 1971 27.4% 31.8% 1972 27.5% 31.6% 1973 27.1% 31.9% 1974 26.5% 32.4% 1975 25.7% 32.6% 1976 25.7% 32.4% 1977 25.2% 32.4% 1978 24.7% 32.4% 1979 25.4% 32.3% 1980 23.6% 32.9% 1981 22.3% 32.7% 1982 21.6% 33.2% 1983 21.4% 33.7% 1984 20.5% 33.9% 1985 19.0% 34.3% 1986 18.5% 34.6% 1987 17.9% 36.5% 1988 17.6% 38.6% 1989 17.2% 38.5% 1990 16.7% 38.8% 1991 16.2% 38.4% 1992 16.2% 39.8% 1993 16.2% 39.5% 1994 16.1% 39.6% 1995 15.3% 40.5% 1996 14.9% 41.2% 1997 14.7% 41.7% 1998 14.2% 42.1% 1999 13.9% 42.7% 2000 13.5% 43.1% 2001 13.5% 42.2% 2002 13.3% 42.4% 2003 12.9% 42.8% 2004 12.5% 43.6% 2005 12.5% 44.9% 2006 12.0% 45.5% 2007 12.1% 45.7% 2008 12.4% 46.0% 2009 12.3% 45.5% 2010 11.9% 46.4% 2011 11.8% 46.6% 2012 11.2% 47.8% 2013 11.2% 47.0% Chart Data Download data The data below can be saved or copied directly into Excel. The data underlying the figure. Source: U.S. Census Bureau and Piketty and Saez (2013) Data on union density follows the composite series found in Historical Statistics of the United States; updated to 2012 from unionstats.com. Income inequality (share of income to top 10%) from Piketty and Saez, “Income Inequality in the United States, 1913-1998, Quarterly Journal of Economics, 118(1), 2003, 1-39. Updated data for this series and other countries, is available at the Top Income Database. Updated September 2013. Share on Facebook Tweet this chart Embed Copy the code below to embed this chart on your website. Download image

Gordon explained the implications of this trend when he wrote:

“Labor unions both sustained prosperity, and ensured that it was shared. The impact of all of this on wage or income inequality is a complex question (shaped by skill, occupation, education, and demographics) but the bottom line is clear: There is a demonstrable wage premium for union workers. In addition, this wage premium is more pronounced for lesser skilled workers, and even spills over and benefits non-union workers. The wage effect alone underestimates the union contribution to shared prosperity. Unions at midcentury also exerted considerable political clout, sustaining other political and economic choices (minimum wage, job-based health benefits, Social Security, high marginal tax rates, etc.) that dampened inequality. And unions not only raise the wage floor but can also lower the ceiling; union bargaining power has been shown to moderate the compensation of executives at unionized firms.”