Union Members Get Back $6 for Every Dollar Contributed in Dues

The annual benefit of paying union dues is very high in Illinois, according to a new study.

For every $1 paid in dues and fees, a union member gets back an estimated $6.12 in after-tax income. This financial return on investment is in addition to other personal benefits, such as better health coverage and having a voice at work.

The report, The Application and Impact of Labor Union Dues in Illinois [PDF], was released yesterday by the Illinois Economic Policy Institute (ILEPI) and the Project for Middle Class Renewal at the University of Illinois at Urbana-Champaign.

While 15 percent of Illinois’ workers are represented by a union, they can voluntarily choose to leave their unionized workplace, opt out of paying certain dues, or vote to decertify their labor organization. Thus, labor unions in Illinois must continually demonstrate how workers benefit from contributing membership dues.

The report analyzed information submitted by labor unions to the federal government. The unions studied represent 744,439 total members in Illinois. The study finds:

  • The average union member contributes $663 in annual dues, fees, and other membership payments in Illinois to labor union locals.
  • Labor unions in Illinois spend 77 percent of dues on bargaining and representation.
  • Only 2 percent of all dues in Illinois are spent on political activities and lobbying– or $14 annually per member.

What Union Dues Do 1

There are many personal benefits to being a union member in Illinois:

  • Union membership increases the after-tax incomes of workers by $4,060 annually on average.
  • Unions increase the likelihood that a worker has health insurance by 14 percentage points.
  • Unions decrease the chances that a worker relies on food stamps by 2 percentage points.

What Union Dues Do 2

While there are significant individual benefits to being a union member in Illinois, labor organizations also have impacts on the broader Illinois labor market:

  • Union members create nearly 43,000 jobs that would not exist in Illinois without unionization– including over 10,000 direct jobs in labor organizations and almost 33,000 other jobs from the higher earnings and consumer spending of union households.
  • The net impacts of union members are a $3.6 billion increase in Illinois’ economic output and $218 million more in state income tax revenue than there would be without unionization.

Finally, while some critics argue that labor unions have “too much” political influence in Illinois, political campaign spending data from public disclosure agencies do not support this claim. In 2014 state and local elections in Illinois:

  • Labor unions contributed $31 million.
  • Business, finance, insurance, and real estate interests contributed $46 million.
  • Just three (3) wealthy individuals contributed $54 million.

What Union Dues Do 3

At an annual cost of $663, union dues and fees increase worker wages by $4,060 after taxes– a $6.12 personal benefit per dollar invested. The dues also increase the chances that a worker has health insurance coverage, reduce the chances that he or she relies on government assistance, and give the employee a voice at work.

Any attempt to weaken labor organizations in Illinois, if successful, would reduce these positive impacts that union members have on the state.

The full report can be viewed here: http://illinoisepi.org/countrysidenonprofit/wp-content/uploads/2013/10/ILEPI-PMCR-Application-and-Impact-of-Union-Dues-in-Illinois-FINAL.pdf

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