Labor unions: Victims of their political success?

Conclusion A glimpse of the future of private sector unions may be gleaned from examining the past. Union densities have declined for nearly half a century, and structural and demographic changes, global competition, and various other factors have caused much of this decline. However, as recognized by early union leaders, legislative successes that diminish the role of collective bargaining naturally contribute to a diminished role for unions in the workplace and union decline must inevitably follow. We thank Bruce Kaufman for valuable comments and suggestions on an earlier draft of this paper.     

Two faces of union voice in the public sector

Summary and Concluding Observations Employee voice through unions is manifest in various ways in the public sector including unionization itself, strikes, political activity, and challenging managerial prerogatives. In each of these areas there are two faces to voice just as there are two faces to unions. Voice can be used in a more influence-peddling and muscle-flexing bargaining fashion to enhance rent seeking and noncooperative behavior with negative effects on productivity, competitiveness, and resource allocation. Voice can also be used more positively by articulating preferences and trade-offs, improving communications, and involving employees and enhancing their commitment to the organization. In all likelihood both faces of voice apply to unions in the public sector just as they do in the private sector. In the private sector, however, the negative monopoly face of unions has been increasingly constrained by competitive market forces such as globalization and trade liberalization as well as by the industrial restructuring to services and the information economy. Rents are obviously harder to obtain when there are fewer rents on the bargaining table. There is little survival value to pricing yourself out of the market now that market forces are more prominent. In such a private sector environment, unions have generally declined, strikes have dissipated, and managerial prerogatives have been enhanced.     

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.     

Union Organization in Great Britain

Union membership and density in Britain has experienced substantial decline since 1979. The fall in private sector membership and density has been much greater than in the public sector. The size of the union sector, measured by employer recognition, has shrunk. Membership decline has been accompanied by financial decline. Much of the decline occurred before 1997, under Conservative governments. Since 1997 and the return of a Labour government, the position has in some respects stabilized. Currently, unions have a substantially reduced economic impact, but a continued, if limited, role in workplace communication and grievance handling, often as part of a voice regime including nonunion elements.     

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.     

Interstate Variations in Private Sector Union Density in the U.S.

This paper uses union density variations across state and state-industry cells in 1985, 1995, and 2005 to examine the factors that contributed to the decline in private sector unionization in the U.S. In addition to the conventional variables, it develops two measures to gauge the effects of union-management strife. Estimations indicate that union density varied directly with union organizing efforts and inversely with the employer opposition to unionization. Decomposition analysis reveals, however, that these variables do not explain why union density declined because changes in their marginal effects were favorable to unionization. Declining union density instead is attributable mostly to the shift factors subsumed under the intercept term over 1985–1995, and shift factors cum negative changes in sensitivity of unionization to workforce characteristics over 1995–2005.     

Challenging Misconceptions about Organizing Women into Unions

In many countries, women are the fastest growing group of unionized workers. As unions scramble to restore their flagging membership, women become central to the process of union membership renewal. Yet survey data collected from union organizers in Canada show that unions are only partially meeting women’s demand for union representation, in large part because of gender bias in union organizing practices. To develop this argument, this article offers data analysis that challenges four popular misconceptions about women and unions which contribute to gender bias in union organizing practices. These misconceptions are: women are less likely to support unions than men; high rates of unionization in the public sector rather than women themselves explain the high rates of union growth amongst women; small workplaces are a particular barrier to organizing women and women are more passive and avoid conflict, therefore reducing their likelihood of withstanding a hostile organizing drive. Having challenged these misconceptions, the article concludes with a discussion of the many ways in which union organizing practices are gender biased. Issues discussed range from the limited number of women hired as organizers to the tendency of unions to target small male‐dominated workplaces for organizing, over women‐dominated workplaces, in spite of the latter’s greater likelihood of success.     

Judging unions’ future using a historical perspective: the public policy choice between competition and unionization

VII. Conclusion In discussing the future of private sector union membership one needs to evaluate the early period of union ascendancy (1930s through the early 1950s) as well as the past few decades when unions have been in decline. We know trends currently in place are unfavorable to unions. What conditions would be favorable? When the earlier period of union growth us studied, two factors become prominent — the competitiveness of the labor market and the ability of unions to fullfill their major goal of either extracting economic rents or remedying market failures that result in exploitive employment relationship.     

Male-female differences in the potential for union growth outside traditionally unionized industries

Using recent NLS data on preferences for union representation, this paper examines whether differences by sex exist in the potential for union organizing outside of traditionally unionized industries. The methodology distinguishes between workers’ preferences for union representation and the relative supply of union jobs in explaining interindustry differences in the extent of unionization. Within the private sector, women employed in industries other than those traditionally unionized are found to have at least as strong a preference for unionization as do comparable men but a considerably lower opportunity for unionized employment given the desire for union representation. Comparing the public sector with traditionally organized industries, the greater extent of unionization in the public sector is largely explained by a stronger desire for union representation on the part of both male and female public sector employees. The helpful comments of Rodney Fort, Daniel Hamermesh, Robert Hutchens, and Jon Sonstelie on an earlier draft of the paper are gratefully acknowledged.     

WAGES AND EMPLOYMENT IN PUBLIC-SECTOR UNIONS

We model the politics of wage and employment determination for unionized public-sector workers who can strike. If the employment level affects the identity of the decisive voter in budget referenda and other elections, then unions may be able to increase wages by increasing employment. We identify conditions under which public sector unionization will lead to increased wages and employment; we also show that a majority of voters may favor unionization. (JEL 545, J51, H4)     

External legitimacy of unions: Trends in New Zealand

Just 5 years ago, at the pinnacle of their success, New Zealand unions negotiated collective agreements covering over 720,000 employees and were successful in persuading some 603,000 of these employees to join. In May 1991, the Employment Contracts Act, which withdrew totally any state-endorsement or sponsorship of union activity, radically altered their position. Union membership fell by around 40 percent in the four years since the enactment of the Act — from 603,000 to 376,000 members in December 1994; the overall number of unions remaining has declined to around 80; a number of unions have become insolvent and have filed for liquidation; staff retrenchments within unions has been widely reported and, in some cases, this has led to a reduction in services and capacity. Data for 1993 suggest that union decline may have “bottomed out” with unions losing fewer than 20,000 members in that year. However, decline is again apparent in the 1994 data. The removal of external legitimacy has had a significant impact on unionization rates. We review the conditions under which the restoration of legitimacy would bring about a reversal of union decline.     

Financial and political resources of nine major public sector unions in the 1980s

Current research offers two potentially competing perspectives on union strength: membership and financial/political resources. We update and broaden the research on the financial and political resources of nine major public sector unions in the U.S. by reporting these unions’ financial assets, net worth, revenues, and political action committee (PAC) receipts during the 1980s and the early 1990s. We find that unions may expand their financial and political resources even though membership levels stagnate or decline. Overall, the unions have amassed larger asset bases, even though some have actually lost members. On a per member basis, federal executive branch unions do not appear as financially weak as the level of their financial resources suggests. Postal unions as a group are clearly the strongest in terms of per member financial and political resources. Federal executive branch unions have experienced a striking reduction in their PAC activity, while the postal and the state and local union PACs have grown substantially. Our analysis indicates that union membership may not adequately measure union strength.     

Some empirical observations of relevance to the analysis of union wage determination

Six important empirical characteristics of the union sector need to be incorporated into future research on wage determination. These are 1) the extent of unionization, 2) the statistical correlates of unionization, 3) divergent trends in union and nonunion earnings, 4) union/nonunion wage differentials, 5) the determinants of union and nonunion wage change, and 6) wage imitation. Examination of these characteristics suggests the following about union wage determination. Union wages have advanced relative to nonunion since the mid 1950s, despite relative shrinkage of the union sector. Union wage changes show less sensitivity to business-cycle pressures than nonunion. Limited spheres of wage imitation surround certain major union negotiations. These observations can be fitted into recent analyses of wage determination under long-term employer employee relationships, and have relevance for anti-inflation policy. Research for this paper was undertaken while the author was a Senior Fellow at the Brookings Institution and was supported by a grant from the Alfred P. Sloan Foundation. Views expressed should not be attributed to the Brookings Institution, its staff or trustees.     

Unions as value-adding networks: Possibilities for the future of U.S. unionism

VII. Conclusions The decline in private sector union density in the U.S. coincided with increased innovation at the local level. One trend in particular, value-adding unionism, may offer some hope for those who believe that workers, the economy, and the nation benefit from strong, independent trade union movement. Unions that can add value to firm performance while at the same time fulfilling their responsibilities to represent the collective and individual interests of their membership have greater appeal to potential union members seeking opportunities for both representation and participation. Since they add economic value to firms, they may also reduce the level of managerial resistance that we have seen in recent history. Farber and Western (2001) argue that the overall U.S. decline in union density is almost entirely due to falling employment in unionized firms and increases in nonunion firms. This value-adding approach offers one strategy to preserve and expand union employment in firms where it is already established, thus slowing or reversing the decline. Moreover, as structural changes in the economy have led to shifts away from sectors with high levels of union density, they have at the same time put a premium on the ability of firms to respond quickly to changes in the marketplace and the competitive environment. Value-adding unions can provide the infrastructure for organizational networks that facilitate the communication and coordination necessary to adjust to such changes. Thus, new forms of representation that provide unions and their members with greater opportunities in decision making, management, and governance can add value to both management and labor. I thank Charles Heckscher and Bruce Kaufman for comments on earlier drafts of the paper and the National Science Foundation, Rutgers University, and MIT for financial support.     

The Effects of Labor Unions on Workplace Performance: New Evidence from France

How do unionization and collective bargaining affect firm profitability? In this paper, we revisit this question using a nationally representative sample of French establishments. In addition to examining union/non-union differences in profitability, we explore the possible sources from which unions capture profits. The results indicate that unionization in France is associated with poorer financial performance in the workplace. The results also indicate that concentration-related profits do not provide an important source of union rents in France. Finally, this study provides strong support for the hypothesis of union appropriation of the returns from long-lived physical capital.     

Exclusive representation in public employment: A public choice perspective

Public sector unionization has grown rapidly in recent years, and research has suggested that among the reasons for such growth is legislation granting special privileges to public employee unions. This paper examines one form of legislative privilege, exclusive representation, from a public choice perspective. It is shown that exclusivity reduces employees’ freedom of choice, increases the welfare of union leaders at the expense of union members, limits employment opportunities to “outsiders,” entrenches the monopoly provision of public services, and generates conflict and instability in labor relations.     

What did Unions do? The Case of Illinois Coal Mining in the 1880s

This study asks what unions did for Illinois coal miners in the 1880s. It measures the outcomes provided by a traditional union and the Knights of Labor, primarily via difference-in-differences applied to a panel of coal mining counties in Illinois. Neither the traditional union nor the Knights of Labor was able to raise wages, provide benefits, or reduce hours per workday. The traditional union reduced days of work per year. Circumstantial evidence suggests the unions were able to ensure prompt payment of wages due.     

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.     

Private sector unions: The myth of decline

Conventional wisdom holds that private sector labor unions are in “crisis” due to the loss of millions of members over the past two decades which has resulted in a dramatic decline in their economic viability and political power. Financial data for selected years between 1960 and 1987 are analyzed to show that, contrary to prevailing opinion, private sector unions are financially prosperous despite membership erosion. Evidence is also presented which indicates that union political efforts and influence have increased rather than declined in recent years. Resources have been allocated to political advocacy to obtain a more favorable public policy environment for labor organizations and to achieve gains that have eluded unions in collective bargaining. The author gratefully acknowledges the assistance of Ms. Sybil Jones at the National Institute for Labor Relations Research.     

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.