Wage and nonwage outcomes in collective bargaining: Determinants and tradeoffs

Using unskilled labor wage rates and union contract scores derived from a sample of 500 U.S. manufacturing contracts, this study finds that in 1975 there was considerable variation in unions’ abilities to deliver higher wages and desirable nonwage contractual provisions to their members (though it is clear that the stronger unions have bargained high levels of both wages and nonwage items). There are a variety of union power, employee quality, union preference, and employer cost variables which impact upon the bargaining choices made between wages and nonwage provisions, and it appears that union strength tilts the compensation package toward wages. The authors, associate professors at the University of Illinois, are very grateful to Christopher Pawlowicz, Ronald Seeber, and Roger Wolters for their help in gathering data. They also are grateful to the Office of the Assistant Secretary for Policy, Evaluation and Research of the U.S. Department of Labor and to the Research Board of the University of Illinois for financially supporting this research. Such support in no way implies, however, that the Department or the University endorses the methods or conclusions in this study.     

The duration of unemployment in the construction industry

This paper examines the duration and frequency of unemployment contingent on personal characteristics using multinomial logit techniques. Both are important, since unemployment is the product of the duration and frequency of unemployment. The key result of this paper is that union and nonunion unemployment experiences are very different. Nonunion construction workers’ duration and frequency experiences depend on personal characteristics. In the union sector, in spite of rules which appear to favor experienced workers, duration experiences do not differ greatly by demographic group; only the probability of unemployment varies with personal characteristics. The report was prepared for the Employment and Training Administration. U.S. Department of Labor, under Research and Development Grant No. 91-42-77-33. Since grantees conducting research and development projects under Government sponsorship are encouraged to express their own judgment freely, this report does not necessarily represent the official opinion or policy of the Department of Labor. The grantee is solely responsible for the contents of this report. I have benefited from comments by Robert E. Hall, Franklin M. Fisher, Lester C. Thurow, James Medoff, Dennis Carlton, and especially Jerry Hausman. James Medoff supplied the CPS tape used in the study. Martin VanDenburgh gave expert programming advice.     

The retirement behavior of workers covered by union and nonunion pension plans

Previous authors have noted that there are significant differences between the provisions of union and nonunion pension plans. I present evidence that sheds light on two hypotheses. The first (Parsons, 1983) posits that union pensions should encourage earlier retirement because productivity falls as workers age, but union rules prohibit firms from lowering wages. The second (Freeman, 1985) argues that union pension plans reflect the preferences of older, more senior workers. I find some support for both hypotheses. I conducted some of the research for this paper as an economist with Unicon Research Corporation. I thank the National Institute on Aging for funding (grant number 5 RO1 AG06133-03). I also thank Fran Horvath, Mark Kennet, Mark Loewenstein, Bob McIntire, Tom Plewes, Bill Wiatrowski, and three anonymous referees for useful comments. All views and opinions expressed herein are the author's and do not necessarily reflect those of the Bureau of Labor Statistics, the National Institute on Aging, or Unicon Research Corporation.     

Trade unions and hiring standards

Summary and Conclusions The empirical data are compatible with the hypothesis that employers respond to union wage premiums by raising the educational component of hiring standards. This behavioral mechanism by which rents are liquidated appears to be bringing about a significant shift in the quality location of American workers. More education increasingly represents preparation for a union job. Normative considerations aside, the implications of the process for the distribution of income and for the allocation of educational resources would seem to warrant serious consideration. Washington University, St. Louis, Missouri. This paper was prepared under Grant No. 21-29-73-49 from the Employment and Training Administration, U.S. Department of Labor, but points of view expressed do not necessarily represent the official position or policy of the Department of Labor. The authors are indebted to Lee Benham, Roger Blair, Wesley Mellow and Frederick Warren-Boulton for helpful criticisms and suggestions. Carl Kaiser assisted with the computations. Edward Kalachek died suddenly on December 9, 1979.     

The “Helper” controversy in the construction industry

Helpers, whose role is to assist craftsmen, have been a subject of controversy in the construction industry for nearly a century. The AFL-CIO construction unions have attempted in various ways to control the work of helpers so that helpers cannot “pick up” the trade and then compete with craftsmen for jobs. With the help of the U.S. Department of Labor’s administration of the Davis-Bacon Act, these unions succeeded in almost eliminating the use of helpers on government-financed construction and most union jobs. This has meant that much unskilled and semiskilled work has been done by journeymen at skilled labor wages. The result has hurt union members and unionized contractors by aiding open-shop contractors, who use helpers extensively, to underbid their competitors and win increasing market share. This article examines the ramifications of the helper issue and related training problems from the turn of the century to the present, discusses various union policies, court decisions, and legislation affecting the issues, and concludes that the economies of utilizing helpers are sufficient to cast doubt on the efficacy or future success of current union attempts to limit narrowly the training and use of helpers. Professor Emeritus of Management; formerly, Director, Industrial Research Unit, and Chairman, Labor Relations Counsel.     

The effect of unionism on productivity in privately and publicly owned hospitals and nursing homes

This paper examines the effect of unions on productivity within a sample of publicly and privately owned hospitals and nursing homes to determine whether public ownership influences union behavior. The results show that the productivity of union contractors is much greater in private than in public projects. Within the sample of private projects, the estimates of the union-nonunion productivity difference are generally positive but very imprecise. Financial support was provided by the U.S. Department of Labor and the National Science Foundation. Steve Margolis gave me some helpful comments on an earlier draft. Katherine Foote provided excellent research assistance, and Jim Comer once again did a masterful job in getting the data set in shape.     

The dynamics of the U.S. occupational structure during the 1990s

During the 1990s, the U.S. economy experienced dramatic structural changes, such as the decline in the defense industry following the end of the Cold War, an extraordinary amount of corporate restructuring and downsizing, a dramatic increase in computer usage in the workplace, the adoption of NAFTA, and the emergence of the global economy. These changes would lead one to expect fairly significant upheaval in the U.S. occupational structure. In fact, my findings indicate relatively remarkable stability of the U.S. labor market and its occupational structure. Moreover, many of the changes which have occurred have been beneficial. I thank an anonymous referee for helpful comments. I also thank Steven Hippie, Jay Meisenheimer, and Tiffany Stringer of the Bureau of Labor Statistics of the U.S. Department of Labor for providing some of the data for this study, as well as insight into their appropriate interpretation and use. Research support provided by Dowling College is gratefully acknowledged. The author assumes responsibility for any errors or omissions.     

The closed and union shop in Western Europe

Conclusion But in the final analysis the cases cited above in Switzerland, Belgium, or the Netherlands are only modest exceptions or glosses on the general absence of formal union or closed-shop arrangements continental or Western Europe, and this contrasts, of course, with the United States. Whether or not this particular divergence may be reduced in the future remains to be seen. Certainly, in the U.S. with the union movement increasingly aware of its relative (to the labor force) decline in numbers, if anything one could anticipate even greater determination to insist on strong union-security arrangements in the future. (Whether this might be offest by some growth in state right-to-work laws, is problematical). Forecasting the future of the closed or union shop, or other forms of union security in Western Europe is hazardous, although this paper does suggest some grounds for development of a trend in the direction of such developments in several countries. How then in retrospect does the West European experience relate to the broader theme of the conference, the free rider issue? Trade unionism in European history has been at least as much a social and political collective phenomenon, as it has been an economic phenomenon. Economists must be able to understand workers’ relationships to unions in terms of these collective realities, if their explanations of why workers do or do not join unions, or why unions may or may not feel compelled to seek the closed or union shop are to achieve a similar reality. This paper is submitted by the author in his private capacity. It is not intended to represent the position of the Library of Congress, where he is currently serving as a senior specialist, nor the University of Wisconsin. The paper has benefited from the comments of Morris Weisz, University of Wisconsin and Bruce Millen of the U.S. Department of Labor.     

Trust violators in the labor movement: A study of union embezzlements

Union embezzlements, considered by many as one of the most serious breaches of trust, have not been seriously examined. My study sheds light on this topic by studying violations of the federal statute which prohibits union embezzlements, 29 U.S.C. 501 §(c). During the period October 1, 1993 to September 30, 1995, 104 individuals were convicted of violating this statute due to their collective victimization of 98 unions. Some findings were: loses tended to be under $25,000; victim unions were small in financial and membership size; unions lack basic financial controls; and offenders were usually male, acted alone, and tended to be part-time officers. I was an investigator with the United States Department of Labor, Office of Labor Management Standards for more than eight years (1/89 to 6/97). The information in this article is the result of my independent research and does not represent the findings, view, or opinions of any agency of the United States government.     

Trade unions and quits: Australian evidence

This study uses data from the recent Australian Workplace Industrial Relations Survey to test the union voice hypothesis that unions reduce quits. Unlike the U.S., however, it is argued that union voice may not be directly correlated with union membership as a result of the protections afforded trade unions by the unique Australian industrial relations system. It is found that, while unions are inversely associated with quit rates, this effect is strongest where union membership is supplemented with a more direct indicator of what unions actually do in the workplace. The authors thank the Australian Commonwealth Department of Industrial Relations for the data used herein, Robert Drago, Bruce Chapman, and an anonymous referee for helpful comments and advice, and attendees at the Australian Labour Market Research Workshop, February 1993, Perth, at which an earlier version of this paper was presented.     

Public sector union democracy: A comparative analysis

A congressional subcommittee held “union democracy” hearings in 1998 and 1999 to debate the impact and effectiveness of the union-democracy protections provided by the Land rum-Griffin Act which provides union members in the private sector and U.S. Postal Service certain democratic rights and protections. What was not resolved at that hearing was whether state sector or public employee union members should also enjoy the same democracy protections. We survey the existing 28 state sector collective bargaining laws and find that the majority of state legislation falls considerably short of the protections provided by the Labor Management Reporting and Disclosure Act. Moreover the consequences of limited state-enacted union-democracy protections are discussed and assessed to determine whether LMRDA jurisdiction should also cover public sector union members.     

“Salting” the contractors’ labor force: Construction unions organizing with NLRB assistance

The sharp decline in construction union membership during the last twenty years has led to a number of programs by these unions and unionized contractors to reverse their losses of members and business. The union activities have included several novel approaches designed both to narrow the cost gap between unionized and “open-shop” (largely nonunion) construction as well as to regain members. This article deals with one such program, “salting,” that is, the placing of union organizers or members in a nonunion facility to disrupt, to increase the costs of, or to organize the open-shop contractor. Union salting programs are examined, using actual cases to demonstrate how they work in practice, and policies of the National Labor Relations Board, on which the success of salting is heavily predicated, are analyzed. Professor Emeritus of Management; formerly, Director, Industrial Research Unit, and Chairman, Labor Relations Council.     

Tax-funded unionism: The unemployment connection

Labor unions are widely regarded as private organizations which finance their activities exclusively through revenues collected from members and others who are covered by collective bargaining agreements. In reality, however, U.S. unions receive millions of dollars each year through grants and contracts from federal, state, and local governments for a variety of purposes, including aid to the unemployed; these funds are used (sometimes illegally) to finance union operations, including political activities. This article briefly explores the phenomenon of tax-funded unionism.     

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.     

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.     

Unionism and prices in the food retailing industry

It is frequently asserted that labor organizations have dominated the collective bargaining process in some industries, extracting higher wages than in the absence of unionism. One reason may be that oligopoly exists in the relevant product markets, so that firms obtain greater-than-normal returns regardless of the outcome of wage negotiation. Also, work stoppages may negatively affect market share, causing firms to be reluctant to resist labor demands. Under these circumstances, union share and product market concentration would be expected to be positively related to product price. This proposition is tested explicitly for the food retailing industry and confirmed. Opinions presented are those of the author and do not necessarily reflect views of the Economics and Statistics service or the U.S. Department of Agriculture. The helpful comments of Harry Harp and Gerald Grinnell are gratefully acknowledged.     

Countercyclical union wage premium? Evidence for the 1980s

Empirical results based on pooled male data from the Panel Survey of Income Dynamics indicate an overall union wage premium of about 11.92 percent for the 1980s. In response to fluctuations in local labor market conditions, proxied by the local unemployment rate, a much more flexible wage-setting process is found in the nonunion sector relative to the union sector. The long-term effect of unemployment on nonunion real wages suggests an approximate 0.6 percent decline for every one percentage point increase in unemployment, a statistically significant reduction, but the long-term effect of unemployment on real wages of union members is negligible. The union wage premium ranges between 11.6 to 12.3 percent for the sample years. Even though union wages are insensitive to short-run fluctuations in local labor market conditions, and are somewhat countercyclical in nature, widespread union wage concessions which occurred during the 1980s may now be exerting a downward pressure on union wages. We acknowledge financial support of National Science Foundation [OSR-9350540], the Ada Howe Kent Research Fund, and The Fogelman Academic Research Excellence Fund. We thank Barbara Ganley for valuable editorial comments and Noga Peled for her able research assistance. The usual caveat applies.     

The Occupational Cost of Being Illegal in the United States: Legal Status,Job Hazards,and Compensating Differentials

Considerable research and pervasive cultural narratives suggest that undocumented immigrant workers are concentrated in the most dangerous, hazardous, and otherwise unappealing jobs in U.S. labor markets. Yet, owing largely to data limitations, little empirical work has addressed this topic. Using data from the 2004 and 2008 panels of the Survey of Income and Program Participation, we impute legal status for Mexican and Central American immigrants and link their occupations to Bureau of Labor and Statistics (BLS) data on occupational fatalities and occupational hazard data from the U.S. Department of Labor to explore racial and legal status differentials on several specific measures of occupational risk. Results indicate that undocumented workers face heightened exposure to numerous dimensions of occupational hazard – including higher levels of physical strain, exposure to heights, and repetitive motions – but are less exposed than native workers to some of the potentially most dangerous environments. We also show that undocumented workers are rewarded less for employment in hazardous settings, receiving low or no compensating differential for working in jobs with high fatality, toxic materials, or exposure to heights. Overall, this study suggests that legal status plays an important role in determining exposure to job hazard and in structuring the wage returns to risky work.     

Is the U.S. unique in the decline of private sector unionism?

The U.S. is not unique in the decline of private sector unionism. Contrary to assertions of the “unique school,” unionism in the private sectors of Canada and Western Europe has also declined and for the same reason, structural changes in the labor market. “It is a capital mistake to theorize before you have all the evidence. It biases the judgment.” Sherlock Holmes. I acknowledge in particular the critique of my colleague, Neil Sheflin. I thank, too, for their useful comments, Larry Adams of the U.S. Department of Labor, Noah Meltz, of the University of Toronto, Alexander Troy, and my colleagues Jack Cullity, Stanley Kaish, and Peter Loeb. I appreciate the research support received from the Research Council, the International Program, and the Dean of the Graduate School — Newark of Rutgers University.