Wages,productivity, and costs in union and nonunion hospitals

This paper considers the effects of labor unions on the economic performance of hospitals. Two data sets are considered. The first includes 275 hospitals from 13 urban areas; the second includes 114 hospitals from Ohio. The analysis is designed to determine whether or not union-induced productivity improvements occur within the rather noncompetitive hospital market and questions whether or not there are cost differences between union and nonunion hospitals. On the question of productivity, both data sets indicate that positive effects occur in the hospital sector. The answer to the second question is less clear. The primary data set indicates that unionized hospitals actually have lower costs than their nonunion counterparts, while the Ohio sample indicates that unionized hospital costs are lower, but not significantly so. The author wishes to thank Donald R. Williams and an anonymous referee for their valuable comments.     

Unions,politics, and protectionism

Conventional models of labor relations emphasize “business unionism,” that is, collective bargaining activities and outcomes. We argue that a more realistic model of behavior incorporates the union’s role as an agent of redistribution that seeks to benefit some members and union leaders primarily at the expense of other members, nonunion employees, and consumers. Union power to redistribute wealth is obtained from the special privileges that labor organizations obtain from government. This paper demonstrates how, as political entities, unions and their employers attempt to secure government-sanctioned wealth transfers through protectionism. The authors gratefully acknowledge research support provided by the Sarah Scaife Foundation and the Earhart Foundation.     

General Feelings Toward Unions and Employers as Predictors of Union Voting Intent

The union voting intention literature shows that many nonunion employees who indicate that they think unions are instrumental in increasing wages, benefits, and working conditions would vote against forming a union. Although American workers have often been characterized as pragmatic with regard to their support for unions, the “disconnect” between union beliefs and union voting intentions just described suggests that more subtle forces are at work. In this paper, it is shown empirically that union instrumentality is a limited predictor of union voting intentions for a recent national cross-section of workers. Rather, more general feelings toward unions and employers are primary. These accounted for a large portion of the variance in union voting intentions, with general feelings towards unions by far the most critical predictor. A concluding section discusses whether the results may reflect changes in union power and changes in employee views of unions. Areas for future research are discussed.     

Union presence and executive compensation: An exploratory study

While executive compensation has historically attracted considerable attention and controversy, this issue is becoming increasingly more contentious as organizations attempt to cut labor costs through reengineering and downsizing. Unions, governments, and workers are becoming critical of seemingly excessive executive compensation while employees are asked to make concessions. In fact, many labor organizations are specif-ically targeting executive compensation for criticisms: Witness their web sites tracking executive pay and numerous press releases and public statements. However, do unions, through their presence in a firm, affect executive compensation? While there is con-siderable research on the determinants and correlates of executive compensation, the literature is silent on the role of unions. We investigate the distinctive effects of union presence with data on a sample of Canadianbased metalmining firms. The differences between union and nonunion firms, as well as the unique effects of union presence, are analyzed and future research suggested.     

Doublebreasted operations and the decline of construction unionism

Labor relations in the construction industry are conducted under a legal framework that is both different and more favorable to unions than is that in industry generally. One aspect of this favored union environment is that construction employers are more subject to challenge than other employers if they operate both union and nonunion subsidiaries (“doublebreasted operations”). For almost a decade, the construction unions have attempted to obtain legislation disallowing this practice on the erroneous claims that it is unique to the construction industry and responsible for the decline of construction unions. This article examines the facts of the case and concludes that having both union and nonunion construction subsidiaries is no different from having both union and nonunion manufacturing subsidiaries insofar as the structure and operational organization of such companies are concerned; that the initial National Labor Relation Board decision in regard to doublebreasted operations in the construction industry was merely an application of precedent of some years previous in other industries; and that construction industry doublebreasted operations are much more a result than a cause of union decline. Professor Emeritus of Management; formerly, Professor of Industry; Director, Industrial Research Unit; and Chairman, Labor Relations Council.     

Agency costs,property rights,and the evolution of labor unions

Collective bargaining requires that an agent represent workers. This paper examines the implications for the trade union movement of the resulting agency costs. Without transferable rights in the union, union members lack the means and incentive to bring forth the innovative agent controls common to the modern corporation. Considerations of the bargaining strengths of employers and employees, each represented by an agent, provide an explanation of the simultaneous decline of private sector union membership (corporate share holders have been more successful at lowering agency costs) and growth of public sector union representation (where the union official, a “double agent,” serves the interest of both employee and bureaucratic employer). The authors acknowledge the helpful remarks Donald L. Martin whose earlier research on property rights in unions inspired this effort. Don Bellante’s work was supported by a grant from the Research Committee of the College of Business Administration, University of South Florida.     

Is collective bargaining a collective good?

This study argues that legislation imposes on collective bargaining an artificial collective goods characteristic as a legal property, which should be distinguished from collective goods in the economic sense. The law creates an artificial freerider problem. Congressional intent was to require compulsory unionism to the extent that all workers would be required to share in the expenses incurred by the union in the negotiation and administration of collective bargaining agreements. Recent court decisions have attempted to define the obligation of employees, employers, and labor unions in terms of this legislative intent.     

Déjà vu for airline industrial relations

Fifteen years after deregulation, labor relations in the airline industry returned to thestatus quo ante, as union power, particularly ALPA’s, still dominates. Without a long-term shift in bargaining power between the parties, costs and productivity have not changed much. Labor accounts for 60 percent of the cost difference between strong and low-cost carriers. American, Delta, United, Northwest, and USAir would require some combination of labor cost concessions or productivity increases of $1.6 billion to match the productivity-adjusted labor costs for low-cost carriers’ flight crews. To remain competitive, strong carriers and unions must develop strategies to deal with anachronistic work rules, provisions to contract out work, and premium pay for airline employees.     

UNIONS, PLANTS, JOBS, AND WORKERS

The relationship between unions and their members is an important, yet neglected, subject in recent studies of the sociology of work. This study develops and tests a theory of union satisfaction and participation that combines recent research in the sociology of work with previous explanations of union satisfaction and participation provided by industrial relations researchers, in an attempt to understand the relationship between unions, plants, jobs, and workers in U.S. manufacturing industries. This theory predicts that union members will be satisfied with their unions and participate more in them if there are extensive ties between workers, employers, and unions. These ties stem from the focus of labor/management relations in particular, and class struggles in general, on market outcomes and the historical linkage of union membership with employment in the United States. The theory also predicts that unions them-selves act as ties to specific work settings and that union participation is a forum for voicing dissatisfaction with specific characteristics of workers' jobs. Testing these predictions is complicated by contradictory nature of the structure and organization of work in advanced industrial societies. The analysis provides qualified support for this theory, with data drawn from more unions, plants, and union members than have been used to date. In addition to discussing modifications to the theory and analysis presented here, the study includes a discussion of its implications for the future of unionization and the organization of work, in light of declines in union membership, increased efforts to decertify unions and resist union organizing efforts, and deindustrialization in the United States.     

Union membership,economic rents,and migration behavior

This study represents an extension of the human capital paradigm as it relates to an individual’s decision to migrate. It differs from previous studies by incorporating union membership, a labor market variable, into the model. In effect, the National Labor Relations Act of 1935 granted a monopoly bargaining position to unions. The theoretical implication of a union’s monopoly bargaining position is that union wage levels will increase relative to nonunion wages. The increase of relative wages results in union membership granting a property right that possesses positive net present value and hence reduces an employed union member’s probability of migrating. Additionally, the supra-competitive remuneration of union members results in a surplus of labor supplied to union firms. Employers respond by using quality screening to hire workers from the larger labor pool. As a result, unemployed union members will on average possess higher levels of human capital, which will increase their probability of migrating above that of their unemployed nonunion cohorts.     

Outsourcing and union power

The outsourcing of union work and jobs either diffuses or diminishes union membership, depending on perspective and situation. The correlation of trends in union membership to trends in union power, while less than perfect, has until recently been relatively strong over the past sixteen years. The fact that as diverse a sample of unions as AFSCME, SEIU, and UAW have chosen to make outsourcing a prominent labor/public relations issue suggests that the correlation continues to be perceived by the union movement to be significant, notwithstanding the efforts of the “new” leadership of the AFL-CIO to break that link with respect to union political power by “taxing” member unions and their members to contribute both money and militancy to the 1996 election cycle. Although outsourcing may lead only to the diffusion of union membership either within or between unions, as opposed to the diminution of union membership, this fact has not received a great deal of attention. The net effect on total union membership of outsourcing from one union employer to another union employer is unclear, although the effect on the membership of the union at the outsourcing employer is not. The redistribution of membership within a union as a result of outsourcing is likely to have little immediate impact on union power. However, as even the best case scenario presented above suggests, it may have significant long-run deleterious effects on union bargaining power by taking labor out of a sheltered market and putting it into potentially competitive market. This is particularly likely to be the case when outsourcing (1) places the outsourced work into a different industry or wage contour and (2) creates the possibility of moving from sole-source to multiplesource supplier arrangements. The redistribution of membership between unions as a result of outsourcing is unlikely to have a major impact on union power broadly defined. It can have, however, serious deleterious effects in terms of the power of an individual union, as suggested in my “competitive case” scenario. The fact that one union’s losses due to outsourcing may be another union’s gain is of little consolation to the losing union. That act, in and of itself, may make the threat of outsourcing a potential union “Achilles heel” at the bargaining table by placing it into competition with some other, perhaps unknown, union as well as possibly nonunion competition. The most obvious threat to union power comes from outsourcing that diminishes union membership overall by transferring jobs from union to nonunion employers. The willingness and ability of employers to move work/jobs entirely out of the orbit of union control constitutes, in terms of power and particularly union bargaining power, a revisitation of the phenomenon of the “runaway shop.” It may also be viewed as a proactive form of hiring permanent replacements for (potentially) striking workers. The union options in dealing with such a challenge are to endeavor to preclude outsourcing through legislation or collective bargaining or to chase the work by organizing the unorganized, hopefully with the help of the unionized outsourcing employer. Neither option may be easy, but as the 1996 auto industry negotiations suggest, the former may be less difficult than the latter. The possibility that outsourcing from union to nonunion employer may provide unions with the power to organize from the top (outsourcer) down (outsourcee) cannot be entirely ignored as the issue of supplier “neutrality” reportedly was raised in the 1996 auto negotiations. The adverse effects of outsourcing on union political and financial power, by virtue of its impact on the level or distribution of union membership, can and may well be offset by an increase in union activism—as measured by dues levels, merger activity, organizing commitment, and political action. The adverse effects of outsourcing on union bargaining power are more problematical from the union standpoint. The effect of outsourcing, whatever its rationale or scenario, appears to be to put union labor back into competition. Thus, outsourcing constitutes yet another challenge to the labor movement in its ongoing and seemingly increasingly unsuccessful battle to take and keep U.S. union labor out of competition by proving itself able and willing to organize to the extent of the market and standardizing wages in that market.     

Sociotechnical Systems and Unions: Nicety or Necessity

Sociotechnical systems (STS) theorists havelargely ignored the role of unions both in theirtheoretical framework and in STS implementation. Thisoversight weakens the potential application anddissemination of STS theory and practice. STS democracy isfrequently seen by its proponents as preferable to uniondemocracy except when they come to the same conclusion.Unions have historically played a role in the development and success of seminal STSinitiatives but are not seen as a critical specificationfor success. Many practitioners have noted theinstrumental importance of unions in unionized settings without acknowledging class, conflict, or unionvalues. As such, many unions have dismissed or resistedSTS innovations. Despite these serious shortcomings, thelabor process argument has failed to produce a credible alternative to STS principles. Insome cases, the union role has been central to STSreforms and examples like these have prompted somenational union movements to promote work reform with an STS base. Recently, the American labor movementhas endorsed work reform approaches akin to STSapproaches. STS changes are seen not just as ways tochange managerial practices but also to alter unionstructures and functioning. As such, a union-rooted STSapproach provides greater societal and workplace impactbenefitting employees, employers, trade unions, and thesociety.     

Why unions support mandated benefits

A complete explanation for union support of mandated benefits must recognize that (1) unions promote the interests of their members primarily by restricting entry into labor markets and (2) those restrictions reduce the competitive advantage which unionized firms realize from efficiently providing fringe benefits. Only by exerting pressure on unionized firms to provide particular fringe benefits and then lobbying government to mandate those benefits at nonunion firms can unions hope to overcome a problem of their own creation.     

A theory of the organization of state and local government employees

Expansion of public employee labor organizations has brought considerable change in a sector previously considered outside the domain of the trade union movement. A model to explain this phenomenon among state and local government employees is developed and tested using data from the1977 Census of Governments. The percentage of employees organized is determined by a number of factors which affect the costs and benefits of membership and may be influenced by the level of employees’ earnings. Empirical evidence indicates that a higher level of organization is a product of government size, legal provisions, unionization in the private sector, and, in some government functions, the unemployment rate, and level of income.     

Construction doublebreasted operations and pre-hire agreements: Assessing the issues

Labor relations in the construction industry are conducted under a legal framework that is both different and more favorable to unions than is that in industry generally. Thus, construction employers are more subject to challenge than those in other industries if they operate both union and nonunion subsidiaries; construction unions, but not those in most other industries, may enter into agreements before anyone is hired (“pre-hire agreements”), require employees to join unions after ten days of employment instead of thirty, and require the contractor to notify them of job openings. Despite these advantages, construction unions represented only 22.2 percent of all construction workers in 1987, down from 40.1 percent in 1973, while nonunion, or “open shop,” construction accounted for more than 70 percent of the construction dollar volume as early as 1984. Attempting to overcome these trends, the construction unions have sponsored legislation in the current and last two congresses which would outlaw “doublebreasting,” i.e., one company owning both unionized and open shop subsidiaries, eliminate any restrictions on pre-hire agreements, and have the effect of forcing thousands of construction workers into unions regardless of their wishes. This article examines the reasons for the decline of construction unionism, analyzes the proposed legislation, discusses its probable impact, and concludes that it is lacking in justification for the common good.     

Employee E-mail and internet use: Canadian legal issues

VI. Conclusion The rapidly increasing use of Internet and e-mail in the workplace has introduced complicated issues related to the areas of potential liability of employers arising from the improper use of the Internet and e-mail by employees, as well as creating numerous privacy issues which must soon be addressed by all employers — union and nonunion. If employers specify and disseminate clear and concise e-mail and Internet use policies, they will be able to significantly reduce the risk associated with employee misconduct in this area. Not only should the policies be clear and concise, but they should also be communicated to the employees in such a fashion that all employees understand the policy and the consequences of breaching that policy.     

Union decline: A view from Canada

Important changes are occurring in the Canadian unions’ political and economic environments. This paper argues that such changes may be detrimental to Canadian trade unions, given their structural and institutional situation. To support this argument, private-sector union and nonunion firms in Alberta are compared. This comparison uncovers some structural (union members’ employment patterns and union firm characteristics) and institutional (union services) attributes of unions. Combined with the politico-economic environments that Alberta unions have faced since the early 1980s, these attributes have led to a decline in union membership. Because these attributes are shared by many other Canadian unions, those unions may increasingly confront some of the same hardships currently plaguing their Alberta counterparts. I am indebted to Brian Bemmels, Alan Murray, and John G. Fricke for helpful comments on an earlier version of this paper, and to Mike Jones for his research assistance.     

Do unions always decrease wage dispersion? The case of Brazilian manufacturing

The literature on the impact of unions on wages has established that unionized workers earn a wage premium when compared to their nonunion counterparts and that the dispersion of wages within the union sector is lower than in the nonunion sector. I examine the validity of these findings in the context of a developing country labor market and show that unionism does create a positive wage differential but that wage dispersion is greater in the union sector. These findings are explained by the greater variance in the characteristics of unionized workers, the vulnerability of nonunion workers to market conditions, and the structure of wage bargaining.     

Union-nonunion wage differentials and the functional distribution of income: Some simulation results from a general equilibrium model

During the past two decades, a number of studies have established the ability of unions to obtain wages for their members that exceed the payment to similar but nonunionized workers. This article investigates empirically the impact that this wage differential has on the real incomes of union labor, nonunion labor, and capital. The analysis is accomplished by solving explicitly a numerically specified general equilibrium system with and without the union wage premium. Comparison of real factor incomes in each equilibrium yields the desired information. The findings indicate that union labor gains as a result of the differential, while nonunion labor and capital lose. This outcome is realized both in terms of real income levels and in a redistributive sense. I would like to thank Nick Carlozzi and Aris Protopapadakis for valuable comments and Mary Agnes McPeak for excellent research assistance. Remaining errors are my responsibility alone.     

Solidarity Revisited: Group-level Effects on Individual-level Union Voting

Rooted in the theory of planned behavior, our empirical reinvestigation of archived union certification election data provided strong evidence that workgroup solidarity was a significant predictor of individual voting behavior. Specifically, group-level attitudes toward unions accounted for individual voting behaviors beyond the individual-level attitudes toward unions. This study offers a meaningful increment to our knowledge as it provides a quantification of the extent that employees are willing to, and actually, comply with subjective norms. Important practical implications for both unions and employers as well as directions for future research are discussed.