Insights Blog

Measuring Worker Bargaining Power

April 22, 2022

In all the excitement about the crack in Amazon and Starbucks’ anti-union armor as workers post big union wins, one might think that labor power in America is rising. But unionization is just one of 10 indicators of worker bargaining power—and of these, only five show worker power is up.


Why does worker power matter? It depends on whom you ask.

Workers need greater power to command stronger wages, benefits, rights, and conditions on the job. Workers also want to know how much bargaining power they have if they contemplate quitting their jobs or asking for a raise.

Employers, meanwhile, want to know how much power workers have as they decide how much to pay workers and how much to offer applicants. And the Fed wants to know about bargaining power to decide whether to cause a recession or not (as Fed Chairman Paul Volcker did in the early 1980s recession to tame inflation and rein in worker power and wages).

Only four indicators show worker power rising, the other six are down. Contrary to some celebratory headlines, these indicators provide a clearer picture of workers’ bargaining power in today’s economy.

6 of 10 Indicators of Worker Bargaining Power Indicate Worker Bargaining Power Is Down

1. DOWN Inflation-adjusted wages and salaries. Wages are going up, but prices are going up faster.

2. DOWN Inflation-adjusted value of the federal minimum wage. In real terms, the federal minimum wage of $7.75 is much lower than its peak in 1968.

3. DOWN Labor's share of the nation's wealth. The share of gross national product that goes to labor (versus capital) peaked in the 1970s.

4. DOWN Productivity is rising faster than wages. Workers have been giving more to the economy than they have been getting.

5. DOWN Pay gap between managers and workers. Wage inequality continues to increase.

6. DOWN Expecting one or more job offers. The share of employed or unemployed jobseekers who expect one or more job offers has declined significantly.

7. UP Quit rate. The quits rate has risen in almost all sectors since the beginning of the pandemic—increasing by 16% in the private sector and 23% in government.

8. UP Reservation wage. The amount that people say they must be offered before they will work has increased for almost all workers, especially those at lower income levels.

9. UP Unemployment rate. The unemployment rate has continued to improve, inching down from 3.7% in Summer 2019 to 3.6% in March 2022.

10. UP Number of Jobs Available for Every Unemployed Worker.


Read more about these indidcators here