This evening, House Majority Leader Eric Cantor (R-VA) will give a speech at the University of Pennsylvania’s Wharton School of Business about how to address income inequality, likely trying to capitalize on the 99 Percent Movement he once derided as unruly “mobs.” Although exactly what policies Cantor will suggest to deal with this social problem are unknown, it’s unlikely that he will touch on one of the chief drivers of American income inequality: the decline of unions. (UPDATE: Cantor canceled his speech after learning it would be open to the public.)
As CAP’s David Madland and Nick Bunker show in the following chart, the middle class’s share of national income has steadily declined as the percentage of the population in labor unions has fallen. At the same time, the top 1 percent’s share of national income has exploded:
Strong unions have traditionally been the free-market solution to income inequality, allowing people to get higher salaries without government intervention. Unionization has allowed middle class and working-class Americans to have the ability to bargain for stronger wages and benefits and a larger share of national income. Highly-unionized countries tend to have far less income inequality.
Sweden, where 85-90 percent of the population is unionized, is both a prosperous country and one of the most economically equal societies — and that’s in a nation that doesn’t even have a national minimum wage.
If Cantor really wants to address income inequality, he could endorse legislation similar to the Employee Free Choice Act, which would break down barriers that have been erected to American union membership.