Working-class structural power, associational power, and income inequality

Abstract

Under capitalism, workers have two sources of power: associational and structural. A vast body of social science research shows that workers’ power—often measured by union density—is associated with lower levels of income inequality. Drawing on a country-level, panel dataset for much of the post-World War II era (1960–2013), the author introduces a model of distributive outcomes that centers on the dual sources of workers’ associational and structural power. By differentiating the sources of workers’ power, the author examines the extent to which they bear on distributive outcomes across countries in the Global North. Using two-way fixed effects regression models, the author presents strong evidence that while workers’ associational and structural power are both statistically associated with lower levels of income inequality, it is workers’ structural—and not associational—power that drives egalitarian outcomes. Notably, counterfactual simulations demonstrate that, on average, structural power of the working class explains a gap up to approximately 4% in levels of income inequality over the past five decades across postindustrial countries.