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 impact of unionization on the entry of firms: Evidence from U.S. industries

Traditional models of entry-deterrence typically emphasize sunk costs or predatory pricing, but unionization might also discourage potential entrants. This paper explores this possibility through an empirical model of entry that includes unionization as an explanatory variable. We find that unionization has a statistically significant entry-deterring effect.     

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.     

Delayed-payment contracts as a means of discouraging unionization

Delayed-payment, self-enforcing implicit contracts are a viable means of discouraging unionization. A contract which would be terminated if employees unionize would reduce the expected gains from unionization for employees, because the firm would not be required to make the delayed payment. These contracts thus reduce the likelihood of unionization and are equivalent to requiring employees to post performance bonds that are forfeited to the firm if the workers unionize. Such contracts would benefit workers as well as the firm, and thus be viable, if unionization would impose deadweight losses (most likely as a result of discouraging specialized investment) and the firm’s promises are credible. Delayed-payment contracts designed for other purposes, such as discouraging shirking, would also discourage unionization if unionization increased the likelihood that the contract would be terminated. I am grateful to the anonymous referee for helpful comments on two drafts of the paper, particularly the suggestion on organization.     

A simultaneous-equations model of the relationship between public sector bargaining legislation and unionization

This paper estimates a simultaneous-equations model with public sector bargaining laws and union membership treated as jointly-determined variables. The extent of public sector unionization has a significant positive influence on the passage of prolabor bargaining legislation and bargaining legislation has strong, independent effects on the extent of public sector unionization. We gratefully acknowledge the research support provided by Minbo Kim and Parisun Chantonahom.     

Relationship between Financial Stress and Workplace Absenteeism of Credit Counseling Clients

The researchers examined how financial stress was associated with absenteeism of credit counseling clients. Data were collected by a national non-profit credit counseling organization, from consumers who telephoned seeking assistance in debt management. The results indicate credit counseling clients’ financial stress affects their absenteeism at work. Clients with high levels of financial stress are more likely to experience higher levels of absenteeism; thus spending work hours handling personal finances, which decreases the time they are at work. The results suggest some insight into providing financial education and assistance for employees with financial strains as productivity loss might influence their pay.Appreciation is extended to the InCharge Institute of America and the InCharge Education Foundation for supporting this research. Dr. Kim served as an InCharge Scholar during this research effort.     

The impact of unionization,right-to-work laws,and female labor force participation on earnings inequality across states

This study examines the effect of unionization, right-to-work laws, and participation of women in the labor force on income inequality. Two distinct models are developed using 1970 and 1980 census data on the 50 states in the U.S. First, an income inequality model is specified as a beta distribution of the second kind to estimate Gini measures of income inequality. Second, these Gini estimates are used in a simultaneous equations model. The 1970 results indicate that higher unionization rates decreased inequality while right-to-work laws increased inequality. In 1980, the measure of inequality was lower in states with higher female labor force participation. We thank an unknown referee and the editor for comments and criticisms that greatly improved the paper. The usual caveat applies.     

Union membership,market structure,and the innovation output of large and small firms

The determinants of the extent of union membership, industry concentration, and the innovation output of large firms and small firms are examined in a simultaneous-equations model. Data for 246 U.S. manufacturing industries are used to determine: (1) that there are significant interdependencies among these endogenous variables; (2) that contrary to recent findings, unionization is significantly lower in industries with high concentration and high innovation output; and (3) that although high unionization modestly reduces small-firm innovation output (as compared with large-firm innovation output), there is not a large difference in the effects of small-firm and large-firm innovation output on the extent of union membership across industries. I am grateful to John W. Ballantine for his comments on this study.     

The effect of unionization on labor productivity: Some additional evidence

Following Brown and Medoff (1978), a number of studies have investigated the effect of unionization on labor productivity using a log-linear, Cobb-Douglas model of technology. To derive this model, a first-order Taylor-series approximation to the intrinsically nonlinear unionization variable is made; the resulting linear equation is estimated with generalized least-squares (GLS) techniques. We demonstrate that this approximation introduces a bias that necessarily results in an overstatement of the absolute value of the exact union productivity effect. We illustrate the magnitude of this bias by comparing GLS estimates of the linear Brown-Medoff model with GLS estimates of the exact, nonlinear relationship, using aggregate time-series data from the private domestic sector of the U.S. economy.     

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.     

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)     

Union rent appropriation and ex post analysis

A data set of 106Fortune 500 firms is used to investigate the extent of union rent appropriation in 1977. The analysis identifies the existence of an appropriable asset with greater value in use than exchange as a necessary condition for union rent appropriation. The empirical analysis utilizes a new source of unionization data and explicitly addresses the problems associated with ex post analysis. The results suggest capital- and firm-specific efficiency are major sources for union rent appropriation. The authors thank Barry Hirsch for providing data used in this study and also thank Jon Nelson, David Macpherson, Mark Roberts, Chella Courington, seminar participants at The Pennsylvania State University, and an anonymous referee for helpful comments on an earlier draft of the paper. Machine readable copies of the unionization data and an appendix describing the programs used to generate the results are available from Ted W. Chiles at the Department of Economics, School of Business, Auburn University at Montgomery, 7300 University Drive, Montgomery, Alabama, 36117–3596.     

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.     

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.     

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.     

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.     

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.     

Unionization and Income Growth of Racial Minority Immigrants in Canada: A Longitudinal Study

This study examines the effect of unionization on the labor market integration of newly arrived immigrants in Canada. We find that non‐white recent immigrants gain access to unionized jobs at a slower rate than do white recent immigrants. The effect of unionization on earnings is somewhat lower for non‐white recent immigrants than for white recent immigrants. These findings are based on growth curve modeling of longitudinal data from the Survey of Labour and Income Dynamics (SLID). Therefore, unionization does not contribute to reducing the earnings gap of non‐white recent immigrants relative to white immigrants and the native‐born.     

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.     

In Whose Interest? Women Organizing on the Waterfront – St. John's,Newfoundland, 1948

In 1948, female fish and blueberry processors formed the Ladies' Cold Storage Workers Union in Job Brothers fish plant, St. John's, Newfoundland. This was accomplished in the context of structural and social change in the Newfoundland fishery that altered the social relations of paid work for the women. Literature on unionization generally assumes it to be a positive event for women workers, but closer examination of specific instances raises questions about economic, social and ideological conditions shaping experiences of unionization. Whose interests were served by the formation of the Ladies' Cold Storage Workers Union and how did women engage with “their union” in this moment?