By: Josh Bivens and Celine McNicholas

Donald Trump’s Project 2025 contains a long list of proposals that would make it harder for workers to win unions and the benefits of collective bargaining. The plan directly attacks public-sector unions, suggesting that they are “not compatible with constitutional government” and calls on Congress to consider banning them (p. 82). If such attacks led to even a 50% reduction in the share of public-sector workers covered by a union contract, it would cost U.S. workers roughly $77 billion annually in lost wages and benefits—and the harm would not just be confined to the workers losing union coverage. The calculation of this estimate is described briefly below, but the methodology section provides a full accounting.

The wage and benefit loss can be broken down into two parts—a direct effect and a “spillover” effect. The direct effect of an attack on unionization rights that led to a 50% reduction in public-sector collective bargaining coverage would be more than 3.9 million public-sector workers who no longer had the significant union premium for wage and benefits—a premium that boosts their pay by roughly 11% overall. This would constitute roughly $37.9 billion in lost wage and benefit income.

But recent research has highlighted that “spillover” effects of workers losing unionization status are often at least as large as direct effects. These spillover effects include a reduced union wage premium for workers who remain unionized, as unions’ ability to demand higher wages for members is undercut by a growing non-union workforce who are potential substitutes for employers. These spillover effects also include a reduction in the union “threat” effect that keeps even the wages of non-union workers higher when unionization rates are high. This threat effect can be seen clearly in the actions of non-unionized auto companies raising pay on the heels of a large union victory by the United Auto Workers (UAW) that boosted pay in unionized firms. The spillover effects of 2.7% of the U.S. workforce losing union coverage would be a $7.2 billion reduction in unionized wages as the union wage premium shrank in response to declining union coverage, as well as a $31.8 billion loss in the wages of non-union workers stemming from a reduced union “threat” effect.

Adding these up yields a total effect of $76.9 billion in lost wages and benefits stemming from this attack on public-sector collective bargaining rights, with more than half of this falling on workers outside of those public-sector workers losing unionization rights. Project 2025 could have even more costly implications for workers if its call to consider an outright ban on public-sector unions were put into action. If Donald Trump is elected, he and his allies will pursue this agenda that decimates public-sector unions and costs workers billions of dollars in lost wages and benefits.

Methodology

The wage and benefit loss stemming from a 50% reduction in the unionization rate of public sector workers can be broken down into two parts—a direct effect and a spillover effect.

Direct effect

The direct effect is straightforward: Unionized workers earn higher wages and benefits. When their unionization status is stripped away, their wages and benefits fall.

The union wage premium in the public sector averaged 8% between 2018–2023, according to unionstats.com.

The union benefit premium has been estimated at roughly 25% by a number of studies—see Brown (2024) and Knepper (2023), for example.

In the public sector, employer-provided benefits comprise roughly 20% of total compensation (this estimate comes from Tables 6.2.D and 6.3.D from the National Income and Products Accounts of the Bureau of Economic Analysis).

All of these combine to a union total compensation premium of 11% (0.25 x 0.2 + .08 x 0.8).

The total wage bill of unionized public-sector workers can be calculated from data from unionstats.com if we are willing to assume public-sector workers work an average of 1,780 hours per year (roughly the number of hours worked by private-sector workers if one multiplies the 34.3 hours paid per week estimate from the Current Employment Statistics data collected by the Bureau of Labor Statistics by 52 weeks per year).

Taking the hourly wage of unionized public-sector workers ($38.50) from unionstats.com and multiplying the number of unionized public-sector workers (roughly 7.7 million) and then multiplying by 1,780, one gets a wage bill of $508 billion.

Because wages are 80% of public sector workers’ total compensation, dividing $532 billion by 0.80 yields a total compensation bill of $665 billion.

Applying the 11% total compensation premium to this number and multiplying by 50% (to account for half of the unionized public-sector workforce losing this premium) gives a direct effect of $37.9 billion.

Spillover effects

Fortin, Lemeuix, and Lloyd (2021) estimate “spillover” effects from deunionization. These spillover effects hit both still-unionized workers and non-union workers. The still-unionized workers experience a lower wage premium as unionization falls. Non-union workers see wage losses as non-union employers no longer are spurred to keep wages competitive with union firms. These researchers estimate that a 1 percentage point reduction in the share of all workers covered by a union contract leads to a 0.33% decline in wages of unionized workers, and a 0.11% decline in the wages of non-union workers.

If half of all currently unionized public sector workers lose their union status, this constitutes a 2.7 percentage point decline in the share of the total U.S. workforce covered by a union.

This implies a wage reduction of 0.9% (2.7 x 0.33%) in wages of unionized workers and a 0.3% (2.7 x 0.11%) reduction in the wages of non-union workers.

Using data from unionstats.com and assuming 1,780 hours worked per year in both the private and public sector, one can calculate the entire unionized and non-unionized wage bill for the U.S.

For union workers, the average wage of union workers ($38.12) is multiplied by the number of union workers (10.5 million, calculated as the 14.4 million union members before the attack on public sector collective bargaining minus the 3.9 million workers who would lose coverage) times 1,780. This gives a wage bill of $715 billion.

For non-union workers, the average wage of non-union workers ($35.85) is multiplied by the number of non-union workers (148.5 million, calculated as the 144.6 million non-union workers before the policy change plus the 3.9 million workers newly deunionized by the policy change) times 1,780. This gives a wage bill of $9.5 trillion.

If we assume that benefits are 12% of total compensation for both sets of workers (this is the economy-wide average according to the Bureau of Economic Analysis Tables 1.10 and 7.8 if one only looks at employer-provided benefits and not government social insurance), then:

The total compensation bill for union workers is $812 billion ($715 billion divided by 0.88).

The total compensation bill for non-union workers is $10.8 trillion ($9.5 trillion divided by 0.88).

For union workers, multiplying the total compensation bill ($812 billion) by the reduction in pay due to spillover effects identified above (0.9%) yields $7.2 billion.

For non-union workers, multiplying the total compensation bill ($10.8 trillion) by the reduction in pay due to spillover effects identified above (0.3%) yields $31.8 billion.

The sum of these spillover effects is $39.0 billion.

The sum of direct plus spillover effects is $76.9 billion.