Wage premiums

How much do unions and bargaining councils elevate wages?

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Carlene van der Westhuizen, Haroon Bhorat, Sumayya Goga on 28 May 2013

Past studies have found that trade union members earn substantially higher wages than non-union workers. New results suggest a much lower union wage premium (6-7%) when the impact of the size of the firm, the type of employment and non-wage benefits are properly taken into account. On the other hand, bargaining council agreements have a higher impact on wages than unions do, so that the cumulative wage premium of unions and bargaining councils averages more than 16%. For the public sector this can be as high as 22%.