Political support for minimum wage legislation: 1989

A model explaining senators’ votes on minimum wage increases in 1966 and 1974 was applied to the 1977 and 1989 votes with similar results. The extent of unionization in each state was positively associated with votes in favor of minimum wage increases. State wage levels were not significantly associated with senators’ votes. These results held for Republican senators as well as for all senators. However, neither wage levels nor unionization rates was a significant factor explaning Democrats’ votes on minimum wage increases.     

The political influence of unions and corporations on COPE votes in the U.S. senate, 1979–1988

The political influence of unions and corporations is examined by analyzing Senate roll-call votes on COPE-identified legislation for the period 1979–1988. Union PAC contributions and union membership both have significant positive effects on three different types of COPE legislation: Narrow Union, General Labor, and Non-Labor. In addition, corporate PAC contributions to senators’ opponents reduce their pro-union voting behavior on Narrow Union and General Labor bills. There is no evidence that the political influence of unions in the U.S. is declining.     

ELECTORAL POLITICS AND THE EXECUTIVE VETO: A PREDICTIVE THEORY

We argue that winner-take-all voting in states and the unequal distribution of electoral votes across states in presidential elections makes incumbent presidents rationally place more weight on the preferences of voters in closely contested, larger states when making policy decisions. This hypothesis is tested by examining whether presidential veto decisions are influenced by the floor votes of senators from these electorally crucial states. In a pooled sample of 325 individual bills from 1970 through 1988, we find significant evidence of this behavior by incumbent presidents.     

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.     

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.     

The different meanings of corruption in the context of the Teamsters Union

Conclusion  TDU’s poor showing in the conventions misrepresented the attitudes of the union’s membership. This fact became clear after the government reached a court-monitored settlement to its RICO suit of the union. The settlement changed the political dynamics within the union, most importantly by providing for the direct election of national leadership. The new rules, combined with a factional split among the incumbents, allowed an insurgent slate, supported by TDU, to win the election in 1991. With a plurality of the membership’s votes, Ron Carey, a self-proclaimed reformer, became president of the union. I thank Bruce Kaufman, John Remington, Catherine Rios, Leah Vosko, Clifford Doerksen, and Robert Gregg for their help in reading this work and their many useful comments and suggestions.     

Union density effects in the supermarket industry

Unions provide higher than competitive wages for members, but their effect on non-union wages is not clear. We investigate the effect of union density on supermarket wages from 1986 to 1993, a period of declining real wages and declining union membership. Full-information maximum likelihood techniques are used to estimate log wage equations for both the union and nonunion sectors. Decomposition techniques then separate the union wage premium into the relative effects of densities and union membership. We find a significant, positive effect of union density for both union and nonunion employees. This effect explains approximately one-third of the union-nonunion wage differential. This research was conducted while Johansson was a graduate research assistant at the University of Minnesota.     

CARBON GEOGRAPHY: THE POLITICAL ECONOMY OF CONGRESSIONAL SUPPORT FOR LEGISLATION INTENDED TO MITIGATE GREENHOUSE GAS PRODUCTION

Over the last 5 years, the U.S. Congress has voted on several pieces of legislation intended to sharply reduce the nation's greenhouse gas emissions. Given that climate change is a world public bad, standard economic logic would predict that the United States would “free ride” and wait for other nations to reduce their emissions. Within the Congress, there are clear patterns to who votes in favor of mitigating greenhouse gas emissions. This paper presents a political economy analysis of the determinants of “pro‐green” votes on such legislation. Conservatives consistently vote against such legislation. Controlling for a representative's ideology, representatives from richer districts and districts with a lower per‐capita carbon dioxide footprint are more likely to vote in favor of climate change mitigation legislation. Representatives from districts where industrial emissions represent a larger share of greenhouse gas emissions are more likely to vote no. (JEL Q54, Q58, R50)     

MINIMUM WAGE EFFECTS WITH OUTPUT STABILIZATION

What are the effects of legal minimum wage rates on the U.S. economy? Does minimum wage legislation promote the economic self-interest of high wage union labor and impede the economic self-interest of capitalists as our earlier research [Cox and Oaxaca 1982] suggested? This paper uses a nine sector econometric/simulation model of U.S. industry from 1975–1978 to answer these questions in the context of stabilization policies which hold aggregate real output constant. While most simulated percentage effects are small, those for the unskilled workers themselves are not. A 15.7 percent increase in the average nominal wage rate of unskilled labor, as a result of minimum wage legislation, produced an 11 percent decrease in unskilled employment, 2.2 million jobs lost, while increasing the real wage of unskilled workers by 15 percent. Simulated changes in several key variables support our earlier observations that the self-interests of labor unions, with skilled workers, conflict with those of capitalists over the issue of minimum wage legislation.     

Heterogeneity and union membership determination

This paper formalizes theoretical and empirical analyses of the determination of union membership. It is argued that an important (and usually ignored) consideration affecting the union status of workers is the externalities between (potential) union members: The gain a worker derives from unionization is affected by the characteristics of the workers who already belong to the union, and the gain union members derive from admitting an additional worker to membership depends on that worker’s characteristics. Thus, two conditions must hold if a worker is to join a union: (1) unionization should increase his wage, and (2) union members must benefit from adding him. The main implication of this analysis is that in a given industry/occupation a union is more likely to form among workers withlower rents. To test this proposition, I present an empirical analysis using data from the May 1979 Current Population Survey (CPS) Public Use Sample. A procedure for measuring worker’s rent is discussed and certain relationships between rent and union membership are identified. I am most indebted to Finis Welch for many valuable comments and suggestions throughout the preparation of this study. I have also benefited from comments made by Mark Killingsworth, Kevin Murphy, Mark Plant, the editor of this journal, and an anonymous referee. The generous availability of the computer facilities at Unicon Research Corporation is appreciated.     

Minimum Wages in a Segmented Labor Market: Evidence from South Africa

The segmented labor market model describes the impacts of minimum wages on covered and uncovered sectors. This paper examines the impacts of an industry-specific minimum wage in South Africa, a state characterized by high unemployment, a robust union movement, and the presence of a large informal sector. Under the industry-specific wage law, formal agricultural and household workers are covered, while workers in other sectors are not. The unique aspect of this paper lies in the ability to compare the impacts of minimum wage legislation on formal covered, informal covered, formal uncovered, and informal uncovered workers. This natural experiment allows us to test whether industry-specific minimum wage legislation leads to higher wages, whether wage increases are restricted solely to covered formal sectors or if there are spillover effects, and whether such legislation manifests in disemployment effects. We find evidence of higher wages yet disemployment among black workers in formal markets. In informal markets we find no employment effects, but higher wages in formal markets appear to have spilled over into informal markets in covered sectors.     

Does the Minimum Wage Bite into Fast-Food Prices?

We study the effect of increases in effective minimum wages on the prices of several fast-food items using quarterly city-level data from 1993–2014, a period during much of which the federal minimum wage declined in real value while state-level legislation flourished. For one product, a burger, we find a robust price elasticity of 9 % with respect to the minimum wage. This estimate indicates substantial cost pass-through when contextualized by the effect of minimum-wage increases on restaurant wage bills. Our estimate for pizza is suggestive of a similarly large pass-through rate but is less precisely estimated, and our estimate for fried chicken is near zero, but estimated even less precisely. Taken as a whole, our estimates point toward sizable cost pass-through of minimum wage increases to consumer prices. These results contribute to a mixed literature on the consumer burden of minimum wage increases.     

Property rights in state legislatures: rural-urban differences in support for state anti-takings bills

In the 1990s over half of US states adopted bills redefining the unconstitutional “taking” of private property by government regulation. This article reports on analysis of legislative voting on these bills in five states. The researchers mapped district-by-district votes on anti-takings bills in five state legislatures and combined these maps with socioeconomic, political, land use, and land ownership data, to develop a portrait of support for and opposition to the legislation. Although the bills were a part of the national agenda of conservative Republicans to reshape social and environmental policy, the research shows that legislative support often crossed party lines, with rural and small-town Democrats and Republicans joining in support against outnumbered urban and suburban legislators, most of whom were Democrats but substantial numbers of whom were Republicans. The research results suggest that although the popularity of anti-takings bills may have waned, the bills may represent only one manifestation of deeper social, political, and economic forces that are almost bound to re-emerge in other forms in the future.     

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.     

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.     

Congressional support for unions’ positions across diverse legislation

Organized labor has become increasingly active in national politics. This development has encouraged research into union political activities, particularly in the area of legislative politics. But little research has been published on the basis of congressional support for union positions on diverse public policy items. This paper has examined the correlates of congressional support for unions’ positions across 33 roll-call votes taken in the first session of the 98th Congress. Empirical analyses suggest that certain factors, such as legislators’ party affiliation and constituents’ ideology, are consistent correlates of such support across diverse legislation. The authors wish to thank John Delaney and Jack Fiorito for their generous comments on a previous version of the paper. They also wish to thank the union lobbyists who granted interviews. A Faculty Research Grant from the Graduate School of Business, University of Pittsburgh, provided partial support.     

The economics of the decision to join a union

This article attempts to bring about a synthesis of the theory of human capital and the disparate and largely empirical literature on the impact of unions on an individual worker’s terms and conditions of employment. This is done by modeling the decision of a worker to join a unionized firm or vote for a union in an NLRB election. From this model both the theoretically correct valuation and some empirical estimates of the value of the major wage and nonwage (seniority, discipline and discharge, strikes, dues) impacts of unions are presented. Extensions to risk averse workers, free rider problems, union elections and contract ratification votes are also briefly considered.     

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.     

Union wage premiums by gender and race: Evidence from PSID 1980–1992

We find that the overall union wage premium is relatively stable (ranging from 22.3 to 28.4 percent), but there seems to be a convergence of union wage premiums across different demographic groups between 1980 and 1992. Nonwhite men (whose premium ranges from 23.5 to 36.2 percent) show the largest gain, followed by white women (17.1 to 30.5 percent), white men (19 to 26.4 percent), and nonwhite women (10 to 20 percent). One explanation for this convergence of union wage premiums might be the “equalization hypothesis” associated with unions. This converging trend could have important implications for the future of unions. If union membership can explain a portion of the gender/racial wage gap, and if women/nonwhites can obtain, through union membership significant wage premia, increased female/nonwhite union participation in highly unionized sectors that offer high union wage gains could, in time, greatly decrease the gender/racial wage differential. This study was supported in part by National Science Foundation funds [OSR-9350540]. An earlier version of this paper was presented at the Southern Economic Association conference in New Orleans in 1995. We thank Emilia Lulcheva and Michael Lauze for their able research assistance and William Warren for his valuable editorial comments on an earlier draft of this paper. The usual caveat applies.     

The union wage effect in Canadian manufacturing industries

Data for Canadian manufacturing industries, at the two-digit level, are used to examine the component elements of the union wage effect. The results show that absence of compulsory union membership for all employees in the bargaining unit served by a union does not significantly impair the ability of the union to negotiate wage gains. That is, our results imply that there is little reason for unions to devote much effort to negotiating the stronger forms of union security — union or closed shops. A second implication of our results is that significant bargaining advantages may accrue to unions with an international (U.S.) link, relative to Canadian national unions.