Right-to-work and union compensation structure

There are many reasons to expect that right-to-work legislation should affect unionism, independently of whether or not such legislation reflects the sentiments of the electorate. The strongest reason is that employees protected by right-to-work legislation can quit a union without quitting their job. This should make collective job actions more difficult and prompt local union leaders to strive more for consensus among members. If so, unions in right-to-work states should negotiate less pay for seniority than do unions in non-right-to-work states. PSID wage data generally confirm this prediction. The authors thank James Bennett, Art Blakemore, Dan Heldman, Barry Hirsch, Stuart Low, and an anonymous referee for comments on an earlier draft.     

Unionism and employment conflict resolution: Rethinking collective voice and its consequences

IX. Conclusions and Overall Assessment The central proposition advanced by F&;M is that the collective voice/response face of unionism more than counterbalances the monopoly face of unionism. Following this reasoning, it may be concluded that union workers would remain unionized and nonunion workers would become unionized. But what if the collective voice/response face of unionism does not more than counterbalance (let alone “dominate”) the monopoly face of unionism? Suppose that, consistent with the evidence presented herein, the exercise of voice in the employment relationship leads to further deterioration of the employment relationship rather than to the effective redress of worker grievances? In this circumstance, existing unions would lose members, and unorganized workers would choose not to become union members. Supposition aside, there is no question that unionization continues to decline sharply. When F&;M's book first appeared, about one in five private sector workers belonged to a union; today, less than one in eight private sector workers belongs to a union. But while F&;M and, later, Freeman and Rogers (1999), attributed the decline in unionization to employer/management opposition and weak labor law, some of this decline can be attributed to worker resistance. Such resistance may stem, in turn and following F&;M, from recognition of the net negative consequences of unionism's monopoly face, but also, and contrary to F&;M, from recognition of the net negative consequences of unionism's collective voice/response face. If workers judged unions' voice response face, in particular, grievance procedures, to be effective in redressing worker grievances, more union workers would likely remain union members and more unorganized workers would join unions — even in the “face” of employer opposition. While there is little question that there are widely varying types of real-world employment relationships or that unions are best suited to protecting worker interests in certain of these (usually highly adversarial) relationships, the fact that workers as a whole decreasingly choose to become union members suggests that they do not perceive union voice to be effective in redressing deteriorated employment relationships or to be more effective in this respect than nonunion voice options. Such reasoning is consistent with the picture sketched in this paper — a different picture from that forwarded by F&;M — of unionism and grievance procedures as largely reactive, adversarial-oriented mechanisms for dealing with workplace conflict resolution, especially in a pluralist, mixed-motive type of employment relationship.     

Unions,incentive systems,and job design

I model the relationship between incentive systems and job design and how unions influence both. The basic idea is that it is easier to monitor worker effort for jobs designed to be routine and inflexible. Pay based on monitoring is used in this scenario rather than incentive pay based on production. Jobs with worker flexibility and autonomy call for incentives based more on output. Unions typically oppose output-based pay, thus inducing job design change. The empirical work supports this view and shows that incentive pay is much less likely for union workers and unions have a clear negative effect on job characteristics that lead to use of incentive pay. In particular, union jobs are more repetitive, have more measurable criteria, and involve less judgmental criteria and less data analysis.     

PENSIONS AND WAGE PREMIA

We hypothesize that the magnitude of the pension-wage compensating differential should vary by sector, because sectoral differences in firms 'technologies result in cost differences in providing non-wage benefits'. Using data from the Survey of Consumer Finances, we find that the pension-wage compensating differential is smaller in the union sector and large firms than in small, nonunion firms. Controls for sectoral selectivity do not alter the results. Thus, workers at unionized and large firms pay a lower implicit price for their pensions either because pensions have productivity-enhancing effects, or because these firms pay workers economic rents via pensions. (JEL 532, J31, 541)     

Right-to-work laws and union density: New evidence from micro data

Although union density is much lower in Right-to-Work (RTW) states than in states permitting union shops, most studies have found that after correcting for omitted-variable and simultaneity biases, RTW laws do not have independent impact on union density. However, these studies typically use data sets which include certain government, agricultural, supervisory and transportation workers who are not subject to RTW legislation thus diluting the effect of RTW laws. When these employees are excluded from the data set, we find that RTW laws do significantly affect union density in the private sector.     

DO UNIONIZED FIRMS HIRE BETTER WORKERS?

It is a strong prior among many economists that unionized firms hire better-quality workers to offset higher union wages. In fact, standard economic theory does not support this prior. The key insights introduced by this paper are that, first, unions will likely raise future wages to reflect improvements in worker quality and, second, that unionized firms, anticipating this, often do better by hiring lower-quality workers. This surprising result has empirical support.     

Equality Bargaining: Where,Who, Why?

It is common to identify a role for trade unions in combating sex inequality at work through collective bargaining. This article uses a survey of paid union officers to identify the context in which equality bargaining by unions is likely to occur, using the specific issue of bargaining on equal pay. It concludes that equality bargaining is a function of women’s voice within unions, the characteristics and preferences of bargainers themselves and of a favourable public policy environment. Bargaining on equal pay is also more likely in centralized negotiations that cover multiple employers.     

Labor union coercion of employees: The use of fringe benefits

In bargaining on fringe benefits, labor unions violate Section 8(b)(1)(A) of the National Labor Relations Act if they restrict benefits to members only. Even if fringe benefits are provided for nonunion members, a violation of the Act occurs if more stringent eligibility rules are required for nonmembers than for members. Sometimes unions deny fringe benefits to union members if fines or dues are not paid, but National Labor Relations Board has ruled that workers are restrained in violation of Section 8(b)(1)(A) if fringe benefits are withheld due to nonpayment of fines or dues.     

The free rider argument for compulsory union dues

This paper examines the free rider argument for compulsory union dues. The contemporary theory of collective goods does not support the union argument because a free rider problem is not a sufficient condition to rationalize the private use of coercion. The paper evaluates quantitative data on union security and applies the theory of local public goods to union services. The focus is on efficiency aspects of security arrangements.     

Characteristics of cities that pass living wage ordinances: Are certain conditions more conducive than others?

Cities that have passed living wage ordinances often do so because of the strong political appeal of local living wage campaigns as a response to the declining value of the minimum wage, the outsourcing of municipal services, and rising income inequality. These campaigns generally consist of coalitions of community organizations, religious groups, and often times labor organizations. Organized labor is not the primary force behind most living wage campaigns, but they are an important constituency. Unexplored, however, are the labor market and other characteristics of those cities that have passed ordinances. This paper looks at data from the Current Population Survey (CPS) and compares cities that passed living wage ordinances to those that did not. Cities in states with high union density, and with higher levels of income inequality and larger immigrant populations appear to be more likely to pass living wage ordinances than those cities that do not have these demographics. But as important as union support may be, without key demographic and economic characteristics, it is nonetheless insufficient to achieve living wage ordinances in most cases.     

Empirical evidence on the union free-rider problem: Do right-to-work laws matter?

This study provides detailed statistics by state, industry, occupation, and worker characteristics on private sector wage and salary workers covered by union collective bargaining agreements but who are not union members. A distinction is made between those workers who value the benefits of coverage more than the cost of membership, the true free riders, and those who do not, the induced riders. A probit union membership equation is estimated on a sample which excludes the covered nonmembers. Predicted probabilities are then calculated from the estimated model, yielding a quantifiable measure of the true free-rider problem. The author gratefully thanks Barry T. Hirsch, David A. Macpherson, and an anonymous referee for their constructive comments and insightful ideas. Any errors remain the sole responsibility of the author.     

Union dues and wage premiums

This study explores whether union wage premiums reflect compensating differences or noncompetitive rents. It is argued that if (1) there exists substantial dues variability, and (2) there is a positive wage-dues relation among union workers, at least part of the observed union premium is noncompetitive. Empirically, these two conditions are substantiated both within and across industries using the PSID microdata base. On average, 44 percent of the overall union premium is attributable to noncompetitive sources. Senior Economist, Office of Research and Evaluation, Bureau of Labor Statistics and Special Assistant for Policy, Evaluation and Research, U.S. Department of Labor. Comments are gratefully acknowledged from James Cunningham, H. Gregg Lewis, Wesley Mellow, William J. Moore, Jack E. Triplett and an anonymous referee. Points of view or opinions stated in this document do not necessarily reflect the official position or policy of the U.S. Department of Labor.     

Political support for minimum wage legislation

Conclusion Even if minimum wage laws reduce employment opportunities for some workers, other individuals may benefit from their enactment. In particular, union members and residents of states with high wage levels would be expected to encourage their senators to vote in favor of minimum wage legislation. Examination of senators’ votes on the 1966 and 1974 minimum wage bills indicates that senators favoring passage of these bills are likely to come from states with high union membership and, to a lesser extent, high wage levels. The equations explaining senators’ votes on these bills were disaggregated by political party affiliation and length of membership in the Senate. Democrats were more likely than Republicans to support minimum wage bills. Virtually no difference was observed between senators who voted on both the 1966 and 1974 measures and those who voted on only one. Perhaps the most encouraging result reported is the similarity of coefficients generally observed for corresponding 1966 and 1974 equations. This similarity suggests that the equations reported herein could be used to predict votes on future minimum wage bills. The results suggest also that the general mode of analysis can be fruitfully applied to other economic legislation.     

Nurses' Pay Formation in Swedish Health Call Centres

This article analyses the pay formation process for nurses in the new organizational form of health call centres (HCCs) in Sweden. It finds that HCC tele‐nurses have gained a better labour market position than both the average call centre employees in other sectors and some other nurses. This specialization of the nursing occupation may thus have importance for gendered pay formation in public healthcare. In evaluating pay formation, the article draws on case studies carried out by the author. It analyses the shift from centralized bargaining towards more decentralized and individualized pay formation and the importance of union organization, economic and professional factors that have contributed to relatively higher pay for these workers. The article concludes with a discussion of the implications of this process for the gender pay gap in the state sector and limitations to future gains.     

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.     

The (Parlous) State of German Unions

We trace the profound decline in German unionism over the course of the last three decades. Today, just one in five workers is a union member, and whether this degree of penetration is consistent with a corporatist model built on encompassing unions is now moot. The decline in union membership and density is attributable to external forces that have confronted unions in many countries (such as globalization and compositional changes in the workforce), to some specifically German considerations (such as the transition process in post-communist Eastern Germany), and to sustained intervals of classic insider behavior on the part of German unions. The "correctives" have included mergers between unions, decentralization, and wages that are more responsive to unemployment. At issue is the success of these innovations. For instance, the trend toward decentralization in collective bargaining hinges in part on the health of that other pillar of the dual system of industrial relations, the works council. But works council coverage has also declined, leading some observers to equate decentralization with deregulation. While this conclusion is likely too radical, German unions are at the crossroads. We argue that if they fail to define what they stand for, are unable to increase their presence at the workplace, and continue to lack convincing strategies to deal with contemporary economic and political trends working against them, their decline may become a rout.     

Membership and wage impact of right-to-work laws

This paper examines the effects of “Right-to-Work” laws on union membership and on the earnings of union and nonunion members. Using regression analysis, we find that once the simultaneous equations bias between the degree of unionization and RTW laws is eliminated, RTW laws have no statistically significant influence on union membership. Similarly, using a human-capital earnings model, we find that RTW laws have no significant influence on the wages of all workers, union workers, or nonunion workers. However, we did find evidence that such laws may promote aggressive union wage policies resulting in a larger union/nonunion relative wages advantage in RTW states than in non-RTW states.     

Building safety: The role of construction unions in the enforcement of OSHA

Because unionized workers are more likely to exercise their rights under OSHA, it is hypothesized that OSHA is more stringently enforced at unionized construction workplaces than at comparable nonunion workplaces. A comparison of OSHA enforcement in union and nonunion construction sites demonstrates that union sites face higher probabilities of inspection and receive greater scrutiny during inspections than do comparable nonunion sites. Further, union employers are required to correct violations of safety and health standards more quickly and bear higher overall penalty costs than their nonunion counterparts. As a result, the construction industry operates under a “two-tiered” safety and health regulatory system. The author thanks Ronald B. Mitchell of Harvard University for comments on an earlier version of this paper.     

The impact of union direct voice on voluntary and involuntary absenteeism

Using a Spanish panel of large establishments, we test the reliability of the exit-voice theory to understand absenteeism (making the distinction between voluntary and involuntary absences). In the Spanish institutional framework, union direct voice (as opposed to union representative voice) is proxied by the existence of a collective agreement at the firm level. We find a positive influence of union direct voice on involuntary absenteeism, which is consistent with a greater protection of workers’ rights through that institution. We do not find a robust effect of direct voice on voluntary absenteeism. The first result lends support to the exit-voice theory but not the second one. Our interpretation underlines the need for re-construction of the exit-voice theory as a more general and precise one.     

L’après-communisme et le déclin du syndicalisme à l’Est : leçons de Pologne et d’ailleurs

Trade unions in Eastern Europe have declined in almost all aspects since 1989, due not just to economic restructuring but to subjective factors such as reactions to communist-era legacies and skilled workers’ animosities towards the unskilled, which made union officials themselves skeptical of the value of unions. Starting around the turn of the new century, however, five factors now favor revival: survival imperatives of the union bureaucracy, incorporation into the European Union, emerging cross-border labor solidarity, a new generation of workers, and the end of postcommunism in the firm, or the dismissal of unessential workers, which means union officials no longer need to defend the unskilled. Three obstacles, however, continue to work against union revival: ideological (continued distrust of unions), organizational (plethora of small firms), and structural (location in the global economy). Organized labor is likely to remain weak, with a few stronger unions emerging in the manufacturing sector that are more elitist, male, and less class oriented than those in the past, while unions chiefly in the public sector would flounder. Such an arrangement is not conducive to stable liberal democracy.