Arizona construction labor: A case study of union decline

Labor relations in the Arizona construction industry provide an interesting and informative case study of what occurs when unions push costs beyond what the market will bear. The industry was highly unionized, even including the homebuilding sector, in the late 1960s and early 1970s, when a series of strikes and major wage and benefit increases led one sector after another in the industry to turn to open-shop contractors. The construction unions and unionized contractors attempted to counter this move by agreeing to wage, benefit, and rule concessions, but the trend to open-shop work continued. Currently, the unions control only a small segment of the work with little prospect of improvement. Although special factors may have reduced union power more in the Arizona construction industry than nationally, developments in this state do indicate a probable decline in the national union share of work beyond what was found in the 1984 nationwide study. Professor Emeritus of Management; former Director, Industrial Research Unit and Chairman, Labor Relations Council. David O. Northrup processed the Dodge data and constructed the tables.     

Construction union programs to regain jobs: Background and overview

All union initiatives discussed herein are based on union demands for monopoly. Unable to compete with the open-shop contractors on an economic basis, the construction unions seek to offset economic considerations with political initiatives. They have been remarkably successful in so doing; yet their membership continues to lag.⁴⁷ The question for the future is whether politically assisted monopoly will smother economics with the public as the big loser. The author is Professor Emeritus of Management and was formerly, Director, Industrial Research Unit, and Chairman, Labor Relations Council.     

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.     

Beyond cheap labour: trade unions and development in the Turkish metal industry

The ability of developing countries to export to more developed parts of the world is often associated with cheap labour. But such very obvious economic advantage is not always the end of the story. A fuller account needs to consider the wider institutional context. In some instances trade unionism can be an important part of this. This paper addresses trade unionism with specific reference to workers employed in large firms in Turkey that are significant exporters of consumer goods to the European market. The union examined is the largest union in the metal industry, an industry that is a driving force in the Turkish economy, and a major centre of trade unionism with over half a million of Turkey's three million trade unionists. The particular ‐ autocratic ‐ character of this union is critically examined and located with reference to wider forces of political economy and the specific constraints and difficulties to which its members are subject. Finally, the significance of this sort of trade unionism for economic ‐ and socio‐political ‐ development is discussed.     

Recent trends in the union wage premium

Estimates of union-nonunion wage differentials are updated by examining a wide variety of subgroups in the general population. Variations in union wage premiums are tracked over a 15-year period, allowing inter-temporal comparisons that are not usually available. One important finding is that union wage premiums have been generally rising since 1972–1973. It also appears that females and nonwhites no longer gain the huge payoffs from unionism that evidence has suggested. The impact of race and education on union wage premiums is weighed, and there is an examination of how levels of education, association with blue-collar or white-collar occupations, and employment in specific industries affect union premiums. The author thanks Professor Jack Skeels for invaluable comments and Northern Illinois University for financial support.     

How employee involvement affects union commitment

I assess how employee involvement programs affect union commitment attitudes. Analysis of 229 survey responses indicates that participation attitudes have no effect on union commitment levels; previous participation has a positive effect; and organizational commitment has a negative effect. A similar pattern was observed on four subscales of union commitment: union loyalty, responsibility to the union, willingness to work for the union, and belief in unionism. I thank the employees, the unions, and the company at which this study was conducted. Also, I am grateful to suggestions and comments made by participants in the American University Department of Management Research Series. Finally, a word of thanks to Tom Case, Gordon Henry, David Jacobs, and Tom Vonk for their comments on earlier drafts of this paper.     

Union wage differentials and the effects of industry and local union density: Evidence from the 1980s

This study finds that the real union-nonunion wage differential has declined only slightly since 1985, a period of falling unionism. The study also finds that, in contrast to earlier research, local (geographic) union density positively affects union and nonunion wages. This paper has benefited from discussions with Bill Even and Barry Hirsch. The research support of the School of Business Administration Research Committee is greatly appreciated.     

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.     

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.     

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 contribution of exclusive representation to union strength

In this paper we show that exclusive representation and other union security agreements contribute substantially to union strength. A regression analysis of the growth of unionism among teachers during the 1970s measures just how potent exclusive representation and dues checkoff agreements are in stimulating union growth in the public sector. Further discussion prompts the conclusion that these powerful measures are especially inappropriate in the public sector, for they excessively coerce employees’ representation and benefit employers, not employees.     

Unions and fringe benefits: Additional evidence

Arguing that the fringe benefit demand function is probably discontinuous, a two-stage estimating procedure is used to estimate the continuous component of the function while correcting for selectivity bias. Results reveal an asymmetrical union impact on health and pension fringes. Although the union effect is positive for health insurance, it is nil for pension fringes. Nevertheless, unionism positively influences the likelihood that pension and health plans will be available to workers. I am grateful to the Oakland University Research Committee for grant support.     

“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.     

Union organizing expenditures: Determinants and their implications for union growth

This paper explores some implications of the economics of union organizing. Following the literature, it is argued that the economic costs and benefits of organizing are systematically related to the proportion of the union’s jurisdiction already organized. Evidence is presented that unions do allocate a smaller proportion of their budgets to organizing when a greater proportion of their jurisdiction is already organized. Total union organizing expenditures, however, are found to increase over a broad range as the percentage organized increases. The supply of union-organizing services to unorganized workers apparently only declines at relatively high levels of union penetration. These critical levels of unionization have been attained only by a few U.S. labor organizations.     

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.     

Political instrumentality perceptions and desires for union representation

This paper examines the concept of union instrumentality in light of theoretical literature and contemporary trends in union political activity. A broad concept of union instrumentality, including a place for the concept of union political instrumentality (e.g., union influence on general elections or legislation), is suggested. The practical importance and applicability of the political instrumentality concept is demonstrated in empirical models of nonunion worker voting intent in union representation elections. As predicted, workers perceiving higher levels of union political instrumentality are significantly more likely than others to indicate a pro-union voting intent. Given the importance of political versus economic activity as a defining characteristic of labor movements and given recent increases in political activity by U.S. unions, these results have significant implications for the way we think about U.S. unions and for future union organizing and political activities. The author wishes to acknowledge helpful comments on an earlier version of this paper from Mario F. Boganno, Frederic C. Champlin III, William N. Cooke, James A. Craft, John T. Delaney, Richard B. Freeman, Daniel G. Gallagher, Cynthia L. Gramm, Charles R. Greer, Wallace E. Hendricks, Marick F. Masters, Lee P. Stepina, and William A. Wines. An earlier version of this paper was presented at the Thirty-Eighth Annual Meeting of the Industrial Relations Research Association, New York, NY, December 1985.     

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.     

Strike strategies and the minimum effective union

Research has shown that in an industry-wide strike, a union must be able to reduce output “by a substantial percentage below competitive levels” to impose hardship on producers. But a union may also be effective by pursuing selective strikes. If some producers are struck while others are free to operate, then the targeted producers may bargain with the union, and holdouts can be targeted for strikes. This article analyzes the effects of selective and general strikes on both a competitive industry and a duopoly. If there are side-payments among producers, then general strikes are easier to mount. If there is no mutual aid among employers, then selective strikes are less costly to implement. It is also shown that strikes are easier to mount in a duopoly than in a competitive industry. This may contribute to union formation and collective bargaining in noncompetitive industries. The analysis is modified to allow for firms of different sizes. The results show that unions must be able to remove more output from larger firms than smaller ones, suggesting that union formation may be focused more on larger firms. The author thanks Mark Loewenstein, James Fain, and Campbell McConnell for thoughtful comments and suggestions. The author gratefully acknowledges a research grant from the College of Business Administration of the University of Nebraska. I am responsible for any remaining shortcomings.     

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.     

Formalization,collectivization, and the demand for union services

Formalized collective bargaining rather than individual employer-employee negotiation is the fundamental characteristic of a unionized labor market. Formalization involves the substitution of rules for employer discretion. Collectivization substitutes simultaneous decision making on behalf of all workers in a unit for a set of individual employee decisions. Formalization and collectivization are present in nonunion as well as union labor markets and their extent varies within as well as between these two sectors. In particular, individuals may negotiate where they belong in a union environment, and the presence of rules invites negotiation over their interpretation. Nevertheless, because formalization and collectivization are obvious concomitants of trade union organization, their costs to both employers and employees should explain the probability of union organization, as well as the incidence of such antecedents of the modern trade union as the Italian padrone who acted as foreman, pay-master, and employment agency for newly-arrived immigrants to the United States; and the Indianjamdar, a construction industry recruiter-foreman. Our occasional observations of union-induced costreductions may appear to counter the implicit assumption in much of the trade union literature that unions always induce suboptimal combinations of factor inputs and factor payments (nonunion firms could choose union-induced parameters on their own and do not). Because these cost reductions may be accompanied by increased costs imposed by unions, however, the cost reductions discussed below imply nothing about overall effects of unions on employers or employees. I wish to thank John Pencavel for helpful comments on earlier versions of this paper. For further analysis of these points, see Flanders (1968). See Epstein and Monat (1973) for a discussion of the services provided by labor contractors.