Unionization and nonunion wage patterns:

conclusion We argue that a nonunion worker’s support for unionization depends not only on the expected gain in wages, but also on the probability of retaining employment after union-ization. Incorporating this point generates no prediction that low-wage workers will receive the largest threat-induced supplements as they are the ones who are least likely to retain their jobs after unionization. In short, which group of workers will receive the largest union induced wage supplement is ambiguous.     

Direct and indirect effects of unionization on the wage levels of nurses: A case study of New Jersey hospitals

This study examines the determination of wage rates for nurses in hospital employment. Of particular concern is the effect of the recent increase in unionization by nurses on their wages, both directly and indirectly via threats from competing hospitals’ unionization. To improve on earlier work, the data are disaggregated and gathered from only one state to standardize for the legal, licensing, and reimbursement systems. We also look at the difference between highly skilled professional nurses, RN’s, and more general and less professional nurses, LPN’s. The results show that working conditions and competition in the market influence the wage rate as one would expect. The unionization of nurses, however, affects the wage levels differently for the two groups. We would like to thank Professors Robert Higgs and Alan Childs of Lafayette College, Professor David Fairris of Williams College, Professor James C. Luzier of Muhlenberg College, and an anonymous referee for their helpful comments and suggestions.     

OLIGOPOLY CAPITALISM, LABOR ORGANIZATION, AND WAGES OF WORKERS IN AMERICAN MANUFACTURING INDUSTRIES

This article investigates the interaction between oligopoly power, labor unionization, and worker wages. Using data from the Panel Study of Income Dynamics for workers in manufacturing industries little evidence is found that workers are exploited by oligopolistic employers, but rather wages for production workers increase with both unionization and employer's market power. There is evidence, however, that unionization reduces variation in wages due to increased oligopoly power.     

Unions,seniority, and public choice

This paper examines the implications of granting a seniority-based system to a union whose behavior is determined by a median voter rule. It is shown that the union will negotiate a sequence of wages that will contract union employment in each period. The model then is extended to include an active role for the firm. It is shown that when the firm has the opportunity to resist unionization, the union will not allow union employment to fall below some lower bound. This lower bound is then a steady-state equilibrium.     

The division of union rents

In this paper, a median voter model that recognizes the trade-off between higher wages and lower levels of employment is presented. It is argued that a seniority-based layoff rule creates the opportunity for mutually beneficial side-payments between older and younger workers. As a result, older workers reap more of the rents of unionization than do younger workers. The resulting distribution of union rents is found to be consistent with existing empirical evidence. We would like to thank Mike Baye and Gene Grossman for most useful comments on earlier versions of this paper. Any remaining errors, of course, are solely our responsibility.     

A dynamic model of public sector employer response to unionization

We model the response of public sector employers to unionization using the response of public school boards to teacher unionization as an example. While it is generally believed that public sector employers pay unionized workers more than nonunion workers, there is less consensus about where the money comes from. We model two cases which are possible employer reactions to unionization: re-allocating resources among types of expenditures and modifying the way in which services are provided. The model contains a political equilibrium that determines the union’s preferences and an economic equilibrium that reflects labor market conditions. We compare the predictions of the two cases regarding the effect of unionization on wages, turnover, allocation of expenditures, and productivity. We interpret existing empirical research on public sector unionization in light of these predictions and make recommenda-tions for future empirical work.     

The Effect of the Minimum Wage on Covered Teenage Employment

Unlike previous studies on the minimum wage, which focused on its effect on total teenage employment, we examine its effect on covered employment. A covered job was defined to be one paying the minimum wage or more. Using contemporary wages to classify workers this way may inflate the estimated effect of minimum wages on covered employment. To avoid this bias, covered jobs are identified using a logit procedure run over years in which the minimum age was not increased. We find that minimum wages reduced covered employment significantly more than total employment. We also show that covered employment may be overstated in the period following an increase in the minimum wage.     

Amenities and the labor earnings function

Desirable locations are, other things equal, expected to be characterized by a mix of higher rents or lower wages. That is, if one area is more attractive than others, inmigration would occur, driving up the demand for land (hence raising rents) and increasing the supply of labor (hence lowering wages). The in-movement will continue until utility is the same across locations in equilibrium. Failing to hold constant amenities in the traditional earnings functions employed by labor economists will result, then, in omitted-variable bias if worker characteristics (years of schooling, union membership, and so on) are correlated with amenities. By way of illustration, our empirical analysis suggests that as much as 50 percent of the apparent return to unionization may be due to the impact of undesirable amenities, resulting in compensating higher wages, in areas of union strength — unionization is being credited with wage gains that properly should be attributed to climate and other (dis)amenities. Similar, though smaller, effects on other coefficients of the earnings function variables are presented.     

Employment success of social assistance recipients: A provincial analysis by industry

Poverty continues to burden millions of Canadians each year, and social assistance (SA) is one program that provides last-resort financial assistance, conditional upon looking for and accepting work. Using tax panel data of SA recipients from across seven Canadian regions between 2000 and 2018, we model the probabilities of employment success (ES) across industry of employment, SA benefit amounts, unionization, and individual-level characteristics. We adopt an economic stance to explain reliance upon SA, examining the broader macroeconomic indicators of ES, and to demonstrate the factors associated with exiting SA. We find that many SA recipients do not present evidence of recent employment, indicating a disconnect between stated SA program aims and their outcomes. We provide evidence for increased SA benefits and unionization as significant predictors of ES of SA recipients.     

The relative effect of unionization and interjurisdictional competition on municipal wages

This study analyzes the effect on municipal employee wages of interjurisdictional competition in municipal service markets. The impact of market conditions are analyzed utilizing a bureaucracy model of local governmental decision making. The study develops hypotheses concerning the degree of competition in this market, constructs empirical measures of competition, and investigates the relationship between competition and wage levels for three categories of municipal workers. The empirical results suggest that local market conditions may be as important a determinant of local wages as local labor market conditions, including union membership. Also, the wage effect of unionization appears to be greater in less competitive local government environments. Financial support from the Earhart Foundation is gratefully acknowledged. We would also like to thank Werner Hirsch, Roger Folsom, and Geoffrey Nunn for helpful comments.     

Intensity of management resistance: understanding the decline of unionization in the private sector

IX. Conclusions Although Lipset and Katchanovski present many of the major societal and structural causes that have influenced the decline of private sector unions, they have unfortunately omitted a factor that can account for as much as 40 percent of the decline in private sector union membership, i.e., intensity of management opposition. The managerial incentives to stop unionization are formidable because unions raise wages and reduce profits. Economic reasons for American managers to stop unionization have grown as the wage between union and nonunion workers has widened over the past 40 years especially relative to EU nations. In addition, as managerial accountability to shareholders has risen and pay related to performance has grown, top executives have attempted to raise productivity through high-performance workplace practices or lowering real wages. Since many of these practices rely on top-level executives being able to make decisions on personnel quickly without challenges from employees or due process, they have fought unions more vigorously in order to maintain this discretion over workplace decisions. Although this behavior by management may result in a more efficient allocation of resources from both a micro-and macroeconomic perspective, the losses to society occur in terms of greater income inequality and less employee voice at the workplace and in the political arena.     

The effect of the extent of unionism on union and nonunion wages

This paper provides estimates, derived from micro wage equations, of the effects of unionism on the wages for both union and nonunion labor. These equations control not only for union status, but also include measures of the extent of unionism in product and labor markets. The results suggest,inter alia, that an increase in the extent of unionization in an industry has substantial positive effects on the wages of nonunion as well as union workers. Increases in the extent of union coverage within an occupation, however, have little or no effect on nonunion wages.     

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.     

Residence laws and unionization in municipal labor markets: The case of firefighters

An estimate is made of the impact of residence laws and unionization on compensation (wages plus major fringe benefits) as well as on employment of municipal firefighters. In addition, hypotheses about the manner in which residence laws exert these effects are econometrically tested using data obtained by surveying the mayors of 560 municipalities. The standard view — that is, that residence laws restrict labor supply — is not supported by the empirical evidence. Rather, the data are consistent with the hypothesis that residence laws affect compensation by altering the bargaining environment; for example, effects of unions are weaker when there are residence laws. The authors would like to express their appreciation to David Lewin and Ronald Ehrenberg for their helpful advice and thoughtful comments, and to two anonymous referees for suggestions which indubitably improved the paper. Significant research assistance was provided by Glen Elder. Financial support by the Institute of Industrial Relations is gratefully acknowledged.     

Wages,union membership,and public sector bargaining legislation: Simultaneous equations with an ordinal qualitative variable

A simultaneous equations model of teachers’ wages and unionization is constructed. The exogenous impact of collective bargaining legislation is captured by conditioning the wage-union system on an ordinal qualitative variable. A new estimation method involving N-chotomous probit and two-stage least squares is developed. The estimation results are consistent with a private interest theory of regulation, predicting that legislators will avoid direct subsidization of teacher wages. By comparison it is also shown that a conventional dummy variable specification of the qualitative legislative outcomes will yield misleading results. The authors gratefully acknowledge the helpful comments of John Addison, Cletus Coughlin, and Robert P. Trost.     

Efficiency Wages,Unemployment Benefits and Union—Firm Wage Bargaining: The Issue of the Choice of the Outside Option

This paper points out that there may be a logical consistency issue in choosing the reference wage in efficiency wage models. We have shown that defining the outside option in the efficiency wage logic as the market-clearing wage solves this difficulty, and is justifiable in terms of the assumed behaviour of workers and employers. The model that we examine confirms earlier findings of reinforcing effects between union-firm bargaining and efficiency wages. However, if union preferences vary between wages and employment, Summers’ reinforcing effect is no longer present for each value of the parameter describing these preferences. Above a certain threshold value of union preferences for employment, the two mechanisms do not reinforce each other anymore.     

Do HRM practices influence the desire for unionization? Evidence across workers,workplaces, and co-workers for Great Britain

We investigate the desire of nonunion workers in Great Britain to become represented by unions. Comparing our results to those from the United States, we find that workers in Great Britain are less likely to desire unionization and express lower dissatisfaction with their influence at work. The determinants of the desire for unionization are estimated controlling for a wide variety of individual and workplace variables. The roles of human resource management and employee involvement are isolated. We identify direct work-place and worker-level effects of these practices in reducing the desire for unionization and an indirect effect operating through the influence of employee relations, a major determinant of the desire for unionization. Also, we identify characteristics of co-workers that are associated with desire for unionization and examine the role information revelation may play in managerial strategies to forestall unions.     

The Mahatma Gandhi National Rural Employment Guarantee Scheme: A Policy Solution to Rural Poverty in India?

The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) was developed by the Indian government to reduce rural poverty through 100 days of guaranteed employment per year. Using focus group methods, we explore whether this scheme has provided rights' based social protection through guaranteed employment for Scheduled Castes, Scheduled Tribes and women in Kerala, Tamil Nadu and Odisha. We found that the experiences of participating in MGNREGA varied depending on how MGNREGA wages compared to market wages in the region, as well as local implementation of the program. Although MGNREGA offered some basic employment for marginalized groups, it did not provide substantial help to the most vulnerable. However, there was some evidence of small but significant shifts in labour relations. Higher wages, more opportunities for work, better implementation and a greater recognition of the caregiving responsibilities of women will be required for this policy to fully meet its goals.     

A THEORY OF TURNOVER AND WAGE DYNAMICS

We develop a model of turnover and wage dynamics with insurance, match‐specific productivity, and long‐term contracting. The model predicts that wages are downward rigid within firms but can decrease when workers are fired. We apply the model to study the impact of business cycles on subsequent wages and job mobility. Workers hired during a boom have persistent higher future wages if staying with the same firm. However, these boom hires are more likely to be terminated and have shorter employment spells. (JEL C73, D23, D82, J33)     

Contested milieux: Small firms,unionization, and the provision of protective structures

Three trends in the workplace point to the importance of considering work relations as well as governance structures for the development of protective benefits such as pensions. The increasing concentration of employment growth in smaller firms, the general decline of unionization, and the changing composition of the work force constitute the new exigencies of worker-employer contracts. The 1983 Current Population Survey Pension Supplement is used in conjunction with certification data from the National Labor Relations Board to examine the interaction between firm size and the influence, as opposed to the prevalence, of unionization in the provision of pensions. Unionization is found to be more influential in the provision of pensions for workers in small firms despite the established prevalence of unionization in larger firms. The implications of these trends for labor market theory are discussed.This is a revised version of papers that were presented at the annual meetings of the Gerontological Society of America, November 1988, and the American Sociological Association, August 1989.