WHY DO WORKERS JOIN UNIONS? THE IMPORTANCE OF RENT SEEKING

Union status models ignore the fact that rent-seeking prospective members have an incentive to bid up entry costs so that higher union wage gains make union jobs more costly to obtain. The standard presumption that higher union wages cause firms to substitute toward higher quality workers is shown to be incorrect under most plausible assumptions; the observed positive correlation between wage gains and the propensity to join a union underestimates the size of the true supply response. The union/nonunion wage differential reveals more about the social cost of unions than the gain to an individual worker from union membership.     

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.     

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.     

Perceptions of union power,service, and confidence in labor leaders: A study of member and nonmember differences

Attitudes toward specific aspects of unionization held by the subjects of large national samples of the U.S. work force (the1977 Quality of Employment Survey) and the general population (the1972–1978 General Social Surveys) are examined in two separate analyses. Comparisons of the attitudes held by union members and nonmembers are made on specific dimensions of union power and service and confidence in union leaders. Nonmembers are found to have stronger perceptions that unions are influential in running the country and that unions are stronger than employers. Conversely, union members have stronger perceptions that unions offer protection, job security, improve wages and conditions of work, are worth their dues, and have greater confidence in union leaders. Discriminant analysis of data over a five-year period also revealed that union members have a stable higher confidence level in union leaders than nonmembers. Explanations for such union member and nonmember differences are hypothesized. The authors wish to acknowledge the assistance of Brent Schooley. An earlier version of this paper was presented at the Western Academy of Management meetings at Monterey, California, 1981.     

Quality upgrading and restrictive hiring practices in unionized jobs

Most previous work has suggested that unionized employers upgrade labor quality of new hires, but has been silent on the behavior of unions when they control hiring. In this paper, it is argued that unions also have the incentive to upgrade quality, but to an extent less than or equal to upgrading by employers. Empirical support for this argument is provided using data from the National Longitudinal Surveys of young men and young women, in conjunction with an industry measure of union control over hiring. Years of schooling and worker IQ measure labor quality. The author may be contacted at 9271-B Jamison Avenue, Philadelphia, PA 19115. She thanks her dissertation committee members Masanori Hashimoto, Patricia Reagan, and especially Donald Parsons, for their detailed comments, and seminar participants at the Ohio State University for helpful suggestions on previous drafts.     

Union collective action,social movement unionism and worker freedom in New Zealand

Freedom of association can include the right of labour unions to take collective action in the interest of their members. In this regard, it is presumed that unions increase worker freedom. However, there is little literature on how worker freedom as self-actualization is linked to union collective action involving coalition-building with civil society. This article uses the notions of freedom according to Berlin (1969) and MacCallum (1967) to assess the meaning of such coalition-building for worker freedom. It then employs a radical democratic perspective (Laclau and Mouffe 2001) of union engagement with the Just Transition in New Zealand to explore how unions enhance worker freedom.     

Racial Submarkets in Government Employment: African American Managers in New York State

This paper reports on a study of the employment situation of African American managers within New York State government. We argue that affirmative action, while having created employment opportunities for minority professionals, has also created racial submarkets in government. We identify three categories of jobs, a mainstream category and two sorts of minority categories, based on the racial composition of incumbents and constituencies that they serve. African Americans in minority submarket positions appear to have equal pay relative to comparable African Americans in mainstream jobs. They are less likely to have civil service job protection. There is limited mobility between submarkets; more professionals move from the mainstream to minority positions than vice versa. In the current period of budget reductions in state government, black professionals experience considerable job insecurity and express dissatisfaction with the policies that created the minority submarket.     

SOFT SKILLS,HARD SKILLS,AND THE BLACK/WHITE WAGE GAP

This study examines the relative importance of soft skills versus hard skills across occupations and its impact on the observed wage gap between Blacks and Whites in the United States. It posits that the Black/White pay gap may vary across occupations that require the use of different types of skills. We classify occupations into hard‐skill intensive versus soft‐skill intensive jobs using the skill content measures of different occupations from the Occupational Information Network (O*Net). We then use data from the National Longitudinal Survey of Youth (NLSY) and Current Population Survey (CPS) to investigate the impact of job skill type on the wage gap. Consistent with our theoretical predictions, we show that this wage gap in white‐collar jobs is smaller for hard‐skills jobs than it is for soft‐skills jobs. Moreover, we demonstrate that, in response to variations in the wage gap across different occupations, Blacks are more likely to self‐select themselves into hard‐skills jobs, ceteris paribus. This shows not only that discrimination against Blacks varies across occupations, but also that such discrimination induces the self‐selection of Blacks into certain occupations. Moreover, this finding highlights the role played by co‐worker/customer discrimination in explaining the racial wage gap in the U.S. labor market. (JEL J15, J31)     

Unions,firms, and the return to seniority

Wages generally rise more slowly with experience in union than in nonunion settings. It has been argued that the lower slope of the earnings profiles reflects the preferences of the median worker. It is shown in this paper that the median worker model (assuming a median worker exists) does not lead to a uniformly less steeply sloped earnings profile. Instead, the lower return to seniority reflects the firm’s rational response to the union’s monopoly power. Thus, the lower slope in unionized firms reflects the objectives of firms, not unions, in the bargaining process. I would like to thank Bill Dickens, Bernie Grofman, Shu Kahn, and Donald Martin for useful comments and suggestions.     

The impact of unions on job satisfaction,organizational commitment,and turnover

Conclusion The research on the exit-voice hypothesis, both in the United States and abroad, shows convincingly that most of the variance in the negative union effect on job satisfaction can be accounted for by job quality, industrial relation climate, and wages. Union members see their jobs as less attractive than do nonunion workers in terms of skill requirements, task complexity, the amount of autonomy or discretion available, and opportunities for promotion. Union members also perceive the supervision they receive and the labor-management relations they experience as less satisfactory. They are, however, clearly better off with respect to wages, benefits, and pensions. But when it comes to job satisfaction, the economic advantages of union jobs are not sufficient to compensate for job content and work environment factors. It comes as no surprise to the job satisfaction researcher that job content — the nature of the tasks people are given to do — weighs heavily in overall job satisfaction scores. While there are individual differences in the degree to which people prefer intrinsically interesting jobs, there is ample empirical evidence showing that autonomy, skill variety, complexity, challenge, and advancement are important determinants of people's affective reactions to their jobs (Deci, 1975; Hackman and Oldham, 1980; Kanfer, 1990). The relative importance of job content factors to overall job satisfaction is also mirrored in the most commonly used measures of job satisfaction (Weiss et al., 1967).     

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.     

INFORMAL LABOR MARKETS AND ON‐THE‐JOB TRAINING: EVIDENCE FROM WAGE DATA

This study examines whether informal sector jobs are a source of training for young less‐educated workers. Controlling for worker and job characteristics, it is found that, in the early years of workers' careers in Mexico, wage growth in the informal sector is higher than in the formal sector. This result is consistent with general human capital investment on‐the‐job if the informal labor market is more competitive than the formal labor market due to frictions generated by labor regulations. (JEL O17, J24, J310)     

The compensation of national union presidents: Moderating effects of union size

Over the last forty years numerous reseachers from the fields of economics, finance, and human resources management have proposed and empirically evaluated a number of models in efforts to identify determinants of executive compensation. Recently, similar research efforts have been undertaken to identify compensation determinants for union officers, both at the local and national levels. As an extension of these works, this study found measures of union financial strength, job complexity, performance and tenure in office to be directly related to national union presidents’ compensation. Although union income and relative union member earnings were the strongest determinants of officer compensation for the sample of unions as a whole, analyses of three subgroups of unions based on size revealed very different findings for large as opposed to small and medium-sized unions.     

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.     

Whatever happened to the monopoly theory of labor unions?

This paper argues that unions act in accord with the conventional cartel or monopoly model. The basic premise is that it is useful to ask what a “union maximizes” because if more wealth is available, union decision-makers have an incentive to capture it for themselves or their membership. In the formal model, unions negotiate wage rates which maximize the monetary surplus above the supply price of labor, providing an endogenous answer to the questions of how union employment and wages are simultaneously determined. Comparative static analysis yields empirical predictions about the behavior of union employment, wage rates, and union-nonunion wage differentials. I would like to acknowledge helpful comments by Richard Anderson, Ray Battalio, Hugh Macaulay, Michael Ormiston and Akira Takayama on earlier drafts of this paper. The usual caveat applies.     

Technology and Job Separation Among Young Adults, 1980–98

This analysis uses data from the National Longitudinal Survey of Youth during the period 1980–98 to examine the relationship between the likelihood that a worker remains at the same job for two years and several measures of technology usage at the industry level. The relationship between job separation and technology usage is generally negative. Quits (not involuntary job loss) generally account for the negative relationship between job separation and technology. Some results suggest that less educated workers are more likely than college graduates to lose jobs in technology-intensive industries.     

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.     

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.     

The power and pay of international union officials

Secondary data are used to examine the relationship between the power of international union presidents and their pay. The analysis supported the hypotheses that (1) power and pay were positively related and (2) the relationship is more pronounced in unions that are larger and are less effective in bargaining as well as during periods characterized by conflict over the president’s role. While highlighting the political dimensions of union organizations, the data also support previous studies that found international union officers’ salaries to have a “rational” basis in the union’s bargaining effectiveness. I am indebted to Gabriella Belli for help with a number of statistical issues.     

The economic status of union workers in the United States

Although American labor unions evolved out of poverty, today’s typical union worker is relatively affluent. Current Population Survey data show that average annual household earnings in 2002 for full-time union workers were nearly $79,000, nearly double the median of all households (including ones with non-workers), and more than for nonunion worker households. While relatively few union workers are truly “poor,” a larger proportion (over one-third for members of teachers’ unions) comes from households with over $100,000 in annual income. A puzzle: why do union members tend to support liberal policies and politicians far more than their relative affluence would predict? Perhaps it partly reflects rent-seeking behavior.