Excerpt
2025, Paper: "Wage inequality among workers has increased dramatically over the past 50 years (Song et al., 2019; Hoffmann et al., 2020). As theorized by Acemoglu et al. (2001), rising inequality may weaken unions’ appeal to relatively high earners. This paper provides the first empirical test of the causal impact of inequality on the labor movement, using three complementary research designs. First, we survey ∼200 U.S. union organizers, presenting incentivized hypothetical choices about how to allocate campaign resources across workplaces with varying degrees of wage dispersion. Second, we experimentally increase the salience of wage inequality by disclosing a pay report to members of the Writers Guild of America during an active strike. Third, we exploit a natural experi ment in Wisconsin—a pay reform that increased wage inequality among public school teachers. Linking administrative wage data to individual union dues payments, we identify which workers respond by withdrawing support. Across all three studies, we f ind that rising pay inequality significantly undermines collective action. This effect is concentrated among workers who stand to benefit most from individual bargaining in unequal environments. Moreover, our organizer survey reveals that inequality shapes not only worker support but also union strategy: in more unequal settings, organizers tend to target smaller bargaining units, aiming to reduce internal conflict over wage demands."