Young workers in New York now earn no more than their counterparts did in 1979, despite being better educated. Over the past three decades, workers between the ages of 18 and 29 have been affected by political and economic changes that have held down wages and have severed the link between economic growth and improving living standards.

“What happens to young workers tells us a lot about the health of the larger labour market,” said James Parrott, chief economist and deputy director at the Fiscal Policy Institute think-tank. “Over the past 30 years, young workers have seen their wages stagnate, after adjusting for inflation. And the quality of their jobs has deteriorated.”

These findings come from a new report, Unions and Upward Mobility for Young Workers, released Thursday by the Fiscal Policy Institute and the Center for Economic and Policy Research (CEPR). According to John Schmitt, senior economist at CEPR and the report’s author, “The wage stagnation experienced by young workers is linked to the erosion of institutions that once ensured a broad sharing of economic prosperity.”

“Because young workers have less experience, they tend to be highly susceptible to the economic cycle and larger structural forces,” added Schmitt. “The decline in the value of the minimum wage, the growth in low-wage work, changes in trade policies, deregulation—all of these factors have exacted a heavy toll from young workers.”

The study found that unionization makes a substantial difference in how young workers fare in the job market. Young New Yorkers represented by unions earn 13 percent more than their non-union peers, and are much more likely to receive health and pension benefits. (These findings include controls for age, education and industry.)

However, just 16 percent of young workers in New York are represented by labour unions—compared to over 30 percent of all New York workers and a national average of 9 percent. For young women in New York, who are less likely than men to hold union jobs, the wage benefit of unionization is even greater: union jobs pay fully 15.5 percent more than non-union jobs.

According to FPI’s Parrott, union representation also means better benefits. He said, “Among New York’s young workers represented by a union, 58.3 percent have employer-sponsored health insurance, while only 42.7 percent of young workers not represented by a union have health insurance."

“Union jobs provide young workers with the foundation to become self-sufficient members of the workforce,” said Mike Fishman, president of Local 32BJ, the largest private sector union in New York. “With solid wages, benefits and job security, young people can support themselves and their families and save for the future.”

Economist Robert Gordon estimated in 2005 that real median earnings per hour in the US had hardly increased since 1966.

He said that the top 10% had captured 50% of the income gains in the past forty years. The top 1% gained more than all the bottom 50%.