The effect of unions on employee benefits: Updated employer expenditure results

As a practical matter, employee benefits are probably more important than ever to workers and employers so research on various aspects of benefits continues to be important. A legitimate part of the ongoing research literature is periodically checking the earlier results to see which relationships have remained constant and which have changed. With respect to the connections between labor unions and employee benefits, the theoretical and empirical framework established by Freeman and Medoff’s (1984) two faces of unionism continues to (appropriately) dominate the contemporary research agenda. I thank Michael Lettau at the Bureau of Labor Statistics for his help with the Employer Costs for Employee Compensation data and his hospitality while 1 analyzed these data at the Bureau of Labor Statistics. The Bureau of Labor Statistics bears no responsibility for the author’s analysis and interpretation of the data.     

Public employee unions: A study in the economics of power

This paper examines how public employee unions influence the allocation of public sector jobs. The empirical results indicate that vote maximizing public officials’ employment decisions are influenced by the political clout of highly-unionized employees. The political clout of public-sector unions influences the functional distribution of public-sector jobs by increasing demand for the relatively more organized functions. These results suggest that consideration should be given to the growth of public sector collective bargaining in the allocation of public sector resources. The author wishes to acknowledge the helpful suggestions of Bernard Lentz.     

Compensation,employment, and the political activity of public employee unions

It has been hypothesized that because public employee unions are politically influential, they have a bargaining advanatage over their private-sector counterparts. Previous studies, however, have not directly measured the political activities of public employee unions and have instead usually used some type of unionization proxy. This paper uses unpublished data from the International City Managers Association to develop a more direct measure of union political activity. Using this measure, it is found that an increase in union political activity leads to higher compensation and employment for public employee union members.     

Union use of employee pension funds: Introduction and overview

Summary and Conclusions A case can be made that labor unions are seeking to gain control of the financial leverage of employee pension funds as a means of offsetting a secular decline in membership which has occurred over the past twenty years and which has been accelerating. Pension fund assets are now substantial and are growing very rapidly so that even partial or indirect influence over investment policies could have major impacts on the economy. Unions have already achieved success on a limited scale with the pension fund weapon. Their intention to achieve widespread influence through this vehicle is signalled by the establishment in January, 1981, of a monthly newsletter,Labor & Investments which is devoted exclusively to the union use of employee pension funds. In sum, it is clear that the union use of employee pension funds is a very timely and significant topic. The papers that follow may not provide definitive answers to the many questions produced by this new initiative, but they do enhance our understanding of the issues involved.     

Privacy,technology, and conflict: Emerging issues and action in workplace privacy

IV. Conclusion Growing employee awareness of the degree to which their personal privacy is compromised in the workplace, particularly with regards to information/telecommunicatton-system use and work monitoring, has created an organizational and political climate that may yield significant restrictions on employee monitoring and on how employers maintain and distribute employees’ personal information. While both federal and state governments have generally deferred to the right of the employer-as-owner to set conditions of employment that may include intrusions into employee privacy (Grodin, 1991), a number of statutory restrictions have been promulgated or proposed that will significantly expand employee privacy rights in the workplace. Additionally, it is probable that unions will aggressively assert employee privacy rights within the context of collective bargaining, potentially using employee dissatisfaction with privacy intrusions as a basis for organizing nonunion firms.     

Union decline: A view from Canada

Important changes are occurring in the Canadian unions’ political and economic environments. This paper argues that such changes may be detrimental to Canadian trade unions, given their structural and institutional situation. To support this argument, private-sector union and nonunion firms in Alberta are compared. This comparison uncovers some structural (union members’ employment patterns and union firm characteristics) and institutional (union services) attributes of unions. Combined with the politico-economic environments that Alberta unions have faced since the early 1980s, these attributes have led to a decline in union membership. Because these attributes are shared by many other Canadian unions, those unions may increasingly confront some of the same hardships currently plaguing their Alberta counterparts. I am indebted to Brian Bemmels, Alan Murray, and John G. Fricke for helpful comments on an earlier version of this paper, and to Mike Jones for his research assistance.     

Bonuses,unions, and labor productivity in South Korea

Using a set of time-series (1972–1989) and cross-sectional data on eight two-digit Korean manufacturing industries, we examine the variability of South Korea’s employee bonus system and the effect of the employee bonus on productivity. A test of the variability of the bonus showed that the bonus rate (ratio of the bonus to the wage) was positively influenced by industrial output, so the bonus is not merely a disguised wage. An augmented Cobb-Douglas production function estimation shows that the bonus has a positive and significant productivity effect. Capital-intensive and laborintensive industries did not have significantly different productivity effects due to the bonus. Lastly, Korean unions reduced labor productivity and negatively affected the productivity effect of the bonus. Also, compared with the previous period, the productivity effect of the bonus has become negative since the1987 Great Labor Offensive.     

Pensions and the uses of ignorance by unions and firms

Pensions are contingent claims contracts that are often fashioned by collective bargaining under conditions of asymmetric information and market power. Pensions are not an employer’s or a union’s optimal contract; they represent compromise. Employers use pensions to minimize labor costs and to adjust to market changes. Pensions help unions improve and protect their members’ work lives and help unions to survive as institutions. When workers’ estimations of their pensions differ from their employers’ estimations a moral hazard can exist. Less mobile workers and those with less influence subsidize the pension benefits of other workers or reduce an employer’s costs. Econometric results based on data from the President’s Commission on Pension Policy show that certain workers, namely women, overvalue their plans, which provides an opportunity to lower labor costs and redistribute benefits. Unions have a contradictory effect on information. The author thanks participants in the Cornell University Collective Bargaining workshop and the Harvard Labor Economics workshop. I especially thank James Medoff for his comments.     

How new lawyers use E-voice to drive firm compensation: The “greedy associates” phenomenon

Discussions and Conclusions How can we distinguish the GA phenomenon from unions? Unions’ raison d’etre is employee representation through collective bargaining, supported by a permanent institutional structure of professional officers and business agents and a revenue base from dues. The GA sites are idiosyncratic, based on the voluntarism and self-interest of secret founders, and lack any sort of disciplined approach to negotiation. Both unions and the GAs have adversarial relationships with management. Rather than bargaining, however, the GAs engage in concerted and surreptitious sniping. Both gather and share information, but unions use it to advance the interests of the collective whereas the GAs are left to their own individual devices when dealing with their employers. The GA sites suffer from problems of possible disinformation being posted by partners and others in the firms, and there have at times been false postings. The sock-puppet issue not only masks identities but also distorts the communication flow such that it is difficult to distinguish real conversations from ersatz relationships.     

Interindustry patterns in unfair labor practice cases

This paper studies unfair labor practice charges filed against unions and employers in two-digit manufacturing industries. Such cases were found to follow distinct and consistent patterns across industries, suggesting that litigiousness in labor-management relations is, among other things, part of the relationship’s culture. Cases against employers and unions by individuals appear to be unrelated to many of the factors studied, thus supporting the view that such cases are the product of workers’ unrealistic expectations.     

The Ross-Dunlop debate revisited

An alternative interpretation of the Ross-Dunlop debate of the 1940s is provided, which reveals little difference in the opinions of these two theorists on the role of optimizing behavior and of economic factors in explaining trade union behavior. Importantly, both saw theories of union activity based on simple economic maximands as unable to incorporate some “political” features of those unions. The recent wave of economic analyses of trade unions however seems to have answered such criticism to a large extent. A survey of this work is provided to show how many of Ross’s “unanswered questions” can be explained by models where rational trade unions maximize relatively straightforward objective functions. This work is based on chapter 1 of the author’s M.A. thesis at the University of Melbourne. Many thanks are due to Ian McDonald for his generous help, and to Greg Whitwell for his comments on an earlier draft of this paper. The author is presently a graduate student at Yale University.     

General Feelings Toward Unions and Employers as Predictors of Union Voting Intent

The union voting intention literature shows that many nonunion employees who indicate that they think unions are instrumental in increasing wages, benefits, and working conditions would vote against forming a union. Although American workers have often been characterized as pragmatic with regard to their support for unions, the “disconnect” between union beliefs and union voting intentions just described suggests that more subtle forces are at work. In this paper, it is shown empirically that union instrumentality is a limited predictor of union voting intentions for a recent national cross-section of workers. Rather, more general feelings toward unions and employers are primary. These accounted for a large portion of the variance in union voting intentions, with general feelings towards unions by far the most critical predictor. A concluding section discusses whether the results may reflect changes in union power and changes in employee views of unions. Areas for future research are discussed.     

The AFL-CIO v. CTW: The competing visions, strategies, and structures

As the AFL-CIO approached its twenty-fifth biennial convention in July 2005, seven unions formed a new Change to Win (CTW) coalition to challenge the federation for lead position as the voice of the labor movement. These unions, most of which have disaffiliated from the AFL-CIO, formed the CTW to demonstrate their unsparing discontent with John Sweeney’s leadership of the federation. We examine the reasons for the current breach in the house of labor, the competing visions offered by the AFL-CIO and CTW, and the likelihood that the CTW’s strategy will revive unions. We find that the gulf between the two factions is philosophically deep and practically irreconcilable. The CTW advocates an “engineered breakthrough” approach to revitalize labor whereas the AFL-CIO relies on a more conservative “accelerated evolution” path. There are no guarantees that the CTW’s strategy will work. It presupposes an unmet demand for unions that can be tapped through vast new investments. If the current model of unionism is lacking, as the CTW suggests, a viable replacement must be found. The CTW, with its limited resources, will have to experiment until it finds the right model, if one does indeed exist. The task of rebuilding labor is daunting, but it arguably requires a bold and fundamentally different course from what has been pursued. From this perspective, the breakup seems a logical development.     

The involvement of canadian unions in political activities: An exploratory analysis

A conceptual framework is presented that depicts the political activities of public employee unions. The framework explicitly recognizes that access to elected officials affects unions’ ability to achieve political influence. Data covering 95 local unions in 26 major Canadian municipalities are used to test the framework. The results generally support the framework and suggest several observations about the effectiveness of union political activities. We are grateful to Susan Schwochau for helpful comments on an earlier draft of this paper.     

The future of public sector unionism in the United States

The future of nonpublic safety, non-teacher, non-federal public sector unions is bright. As a result of past success, the unions, led by AFSCME, have an organizing culture and sufficient power within the sector to maintain and increase density. However, the challenges that lie ahead in the 21st century will surely test the strength of AFSCME and the other public service unions. The large gains in public employee membership achieved in the last third of the 20th century are not likely to come with the relative ease with which they were achieved during that period. The remaining unorganized workers are in locations and occupations that have not been historically fertile ground for unions, public or private. In addition, the threat of privatization of jobs requires public unions to re-think their traditional strategies and organize in the more hostile private sector while simultaneously protecting the public sector from attacks. The public sector unions recognize that they have a tenuous grasp on their relatively strong position and must organize to maintain and strengthen their position. Absent dramatic changes in federal private sector labor law, and adoption of numerous public sector labor laws, the resources necessary for organization will be tremendous. The future is bright for the public sector unions only because they have demonstrated a willingness to adapt to change, make sacrifices, and deploy sufficient resources to achieve growth. The views herein are the author’s and do not necessarily represent the views of AFSCME.     

The composition of public sector compensation: The effects of unionization and bureaucratic size

This paper examines the effect of the political power of public sector unions on the composition of public sector compensation. Public employee unions provide a relatively low-cost vehicle for organizing workers’ political activity in support of the rent-seeking behavior of local politicians. The unions also provide a conduit for employees to capture part of these rents as payment for political services. Since the public has little interest in paying for the political activities of public workers, these payments are most likely to be made through fringe benefits so as to minimize public scrutiny. The authors would like to thank an anonymous referee for helpful suggestions. Any errors remain those of the authors.     

Agency costs,property rights,and the evolution of labor unions

Collective bargaining requires that an agent represent workers. This paper examines the implications for the trade union movement of the resulting agency costs. Without transferable rights in the union, union members lack the means and incentive to bring forth the innovative agent controls common to the modern corporation. Considerations of the bargaining strengths of employers and employees, each represented by an agent, provide an explanation of the simultaneous decline of private sector union membership (corporate share holders have been more successful at lowering agency costs) and growth of public sector union representation (where the union official, a “double agent,” serves the interest of both employee and bureaucratic employer). The authors acknowledge the helpful remarks Donald L. Martin whose earlier research on property rights in unions inspired this effort. Don Bellante’s work was supported by a grant from the Research Committee of the College of Business Administration, University of South Florida.     

Non-wage forms of compensation

Conclusions In the twenty years since the publication of What Do Unions Do?, employee benefits and contingent forms of non-wage compensation have increased in importance and scope in human resources and industrial relations practice and policy. Nevertheless, Freeman and Medoff’s (1984) seminal work, and the associated research in Freeman (1981, 1985), has stood the test of time. The theoretical and empirical agenda for research on unions and non-wage forms of compensation established in those works continues to be the leading framework for conceptualizing and analyzing this important issue.     

Member support for union mergers: An analysis of an affiliation referendum

A changing labor relations climate has caused many national unions to merge with smaller independent unions in recent years. One aspect of the merger process concerns the willingness of independent union members to support affiliation with a national union (Chaison, 1986). This article examines the determinants of indivudual-level voting behavior using data gathered from members of an independent union who rejected a proposed affiliation with a national union in a membership referendum. Logistic regression results indicate that affiliation supporters perceived the affiliation as improving union effectiveness, were influenced by social support among co-workers in favor of the merger, and perceived the saliency of the independent union’s support for the affiliation proposal. Conversely, affiliation opposition was influenced by the employer’s “vote no” campaign and by perceptions that affiliation would lead to an increased probability of strikes and to future increases in dues.     

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.