Do minimum wages crowd out union density?

Abstract

Minimum wage legislation has spread across rich democracies in recent decades in response to rising inequality and in-work poverty. However, there are concerns that state regulation of wages could reduce incentives to join a union. We empirically test this crowding out hypothesis, using (1) an event-study macro-level analysis of trade union density in 19 advanced capitalist countries between 1960 and 2017 and (2) a multi-level analysis of 32 countries (1981-2020) where we use individual-level union membership as dependent variable. We find no evidence that statutory minimum wage adoption crowds out union density. We also test whether the most vulnerable groups of employees (young, low-skilled and low-income) have a lower propensity to join a union when a minimum wage is introduced but find no effect either.