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.     

Induced inefficiency as a response to the union threat

Milkman and Mitchell (1995) extend Rosen’s (1969) threat-effect hypothesis to suggest that the threat of unionization can induce inefficient underutilization of labor by nonunion firms. If firms follow this strategy, the apparent paradox of competitive coexistence in the face of higher union wages reflects induced nonunion firm inefficiency rather than superior union firm efficiency. Furthermore, this strategy decreases demand for nonunion workers in a partially unionized industry. A generalized cost function analysis of data from sawmills in the Pacific Northwest yields evidence that nonunion firms use this strategy.     

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.     

Membership and wage impact of right-to-work laws

This paper examines the effects of “Right-to-Work” laws on union membership and on the earnings of union and nonunion members. Using regression analysis, we find that once the simultaneous equations bias between the degree of unionization and RTW laws is eliminated, RTW laws have no statistically significant influence on union membership. Similarly, using a human-capital earnings model, we find that RTW laws have no significant influence on the wages of all workers, union workers, or nonunion workers. However, we did find evidence that such laws may promote aggressive union wage policies resulting in a larger union/nonunion relative wages advantage in RTW states than in non-RTW states.     

The effect of the united mine workers of America on the probability of severe injury in underground coal mines

This paper examines the efficacy of the United Mine Workers of America (UMWA) in achieving safe working conditions by reducing the probability of severe injury. A detailed data base has been constructed for underground mines during the period 1986–1988. The results obtained fail to provide convincing evidence that the UMWA reduces the severity of injury, even though the UMWA has safety committees and inspectors in the mines where it is the bargaining agent. Further testing reveals that there is no significant difference in the probability of injury due to roof falls, haulage, and handling material, between union and nonunion mines.     

Police recognition strikes: Illegal and ill-fated

This study investigates the relationship between strike activity by nonunion public employees and unionization. This study examines strike activity and unionization rates of some 600 nonunion municipal police departments from 1972 to 1978 and finds that recognition strikes occur primarily where bargaining laws provide little or no protection of bargaining rights for municipal police. These strikes, however, do not help nonunion police gain recognition. The author thanks John Delaney for helpful comments on this paper.     

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.     

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.     

Unions and coal mine safety: Comment

In a recent article in this journal, Appleton and Baker tried to account for the variability in mine injury rates by using several variables, one of which we claim to be an inadequate measure of the climate for safety brought about by unionization. In this paper, we criticize their empirical work for lack of documentation, misinterpretation of analyses, and poor model specification; and their generalizations to global union effects and to specific union practices. We also offer several suggestions that could improve the applicability of future research to decisions about whether coal miners’ unions beneficially influence their members’ safety. The authors would like to thank C. Bise, J. Kiusalaas, T. Long, and E. Ray from The Pennsylvania State University for their suggestions during the review of this article.     

Health conditions and job hazards: Union and nonunion jobs

Blue-collar union members are more likely than nonunion blue-collar workers to report health conditions caused by job accidents and by bad working conditions caused by noise, smoke, heat, and dust. This is consistent with blue-collar union members’ evaluation of hazardous job conditions and with their indemnity claims filing behavior for industrial injury or occupational disease. Union members are also more likely to be found in industries with higher injury rates. Age and marital status are positively associated and being female and education are negatively associated with a self-reported job related health condition. We thank Steve Zrebiec for research assistance and Bill Greene for the maximum likelihood routines. The views expressed are those of the authors and not necessarily those of the National Council on Compensation Insurance or Brigham Young University.     

Compensating payments and hazardous work in union and nonunion settings

This paper extends the results of past research on estimated compensating payments and estimated injury rate equations for the union and nonunion sectors. It allows for both simultaneity in the determination of income and safety and structural differences in their determinants across the two sectors. Although union settings are found to maintain larger compensating payments for hazardous work than nonunion settings, they also appear to contain higher injury rates, all else constant. A fuller understanding of these results will require further analysis of the differing institutional mechanisms for compensation and safety determination in union and nonunion labor markets. The author thanks Lori Kletzer, Paul Leigh, David Ross, and seminar participants at Williams College for helpful comments on earlier drafts of this paper. Ajaz Hussain provided able research assistance.     

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.     

Union rent seeking and import competition

conclusion We empirically evaluate two issues: (1) how the union rent seeking responds to import competition and (2) whether union bargaining power, as proxied by the proportion of the labor force in an industry that is unionized, moderates the impact of import com-petition on union wage differentials. Unlike other studies, our emphasis is on the influ-ence of import competition on union rent seeking, rather than on union wages per se. Our primary results indicate that while import competition negatively and significantly affects union rent seeking, the extent of unionization does not substantially influence the impact of import competition on the union wage differentials. This is a somewhat surprising result since the literature suggests that union wages are greater in the pres-ence of stronger unions.     

Workplace hazards and workers’ desires for union representation

This paper investigates “voice” responses to hazardous and otherwise disagreeable working conditions in the form of workers’ expressed desires for union representation. Using data from three surveys conducted between 1977 and 1982, workers exposed to significant health and safety risks on the job are found to be substantially more likely to report a willingness to vote pro-union than are comparable workers not similarly exposed. This finding is obtained using both subjective and objective measures of hazard and both union and nonunion workers. Management resistance, however, appears to play a strong role in determining the actual extent of unionization. Between 41 and 48 percent of workers in hazardous jobs desire union representation but have not achieved it. Support for this research was obtained from the Institute of Industrial Relations, University of California, Berkeley. Computational help was provided by Keun Lee and Glenn Shor. Valuable comments on an earlier draft were obtained from William Dickens.     

Product selection and costs in a partially unionized industry

This paper examines differences in costs among union and nonunion firms operating in the multiple and competitive lumber markets; develops a model of output and product selection decisions; and then estimates the cost function implied by the model for a sample of sawmills that produce green and dry lumber. Overall, the average variable costs for the green technology are about 67 percent higher for union mills and, for the dry technology, costs are about 30 percent higher. However, differences inminimum average variable costs are negligible in the dry market but are significant in the green market. The results suggest that some union mills may be able to coexist with nonunion mills in a competitive industry by specializing in market niches determined by comparative cost advantages. The authors gratefully acknowledge comments from James Bennett, Jo Anna Gray, Chris Ellis, Stephen Haynes, Joe Kerkvliet, and an anonymous referee.     

Unionization decisions of members and nonmembers of an employee association

The determinants of intent to unionize were investigated using the responses of 405 employees of a large public university, 243 of whom were members of an employee association. Members and nonmembers indicated significantly different levels of union vote intent, general beliefs, specific beliefs, and normative pressures. They also used a different union vote decision model. General beliefs about unions appear to play a significantly greater role in unionization decision of nonmembers. On the other hand, while considering unionization, specific beliefs about unions were significantly more important for association members. Association members were less likely to vote for unionization.     

The effect of unionization on labor productivity: Some time-series evidence

This paper presents evidence concerning the effect of unionization on the average productivity of labor using time-series data from the private, domestic sector of the U.S. economy over the 1948–73 period. Aggregate technology is specified by a constant-returns-to-scale, Cobb-Douglas production function which incorporates union and nonunion labor and proxies for both embodied and disembodied technical change. Maximum likelihood estimates of the model indicate that union membership significantly decreased average labor productivity, holding constant the quality and mix of capital and labor and controlling for cyclical effects. I thank John Addison, Maxim Engers, Barry Hirsch, William Johnson, Duane Leigh, Roger Sherman, and Jonathan Skinner for helpful comments on an earlier version of this paper. Of course, responsibility for remaining errors is mine.     

Unionization and tenure and rank outcomes in Ohio Universities

We explore whether unionization affects tenure and promotion outcomes. Using data on 4,276 faculty from seven Ohio public universities, we find that unionization increases the probability that an individual will be tenured. Unionization also increases (decreases) the probability that an individual will be a full (assistant) professor. Moreover, unionization may standardize the promotion process across disciplines. The largest effect on the promotion process is related to length of service. Faculty who are with an institution longer are more likely to be tenured or in higher ranks. This result occurs for two reaization (1) The tenure and promotion processes are directly related to the number of years an individual works at an institution. Tenure decisions usually have time limitations, and although promotion decisions are not as directly tied to time, one generally becomes a full professor after the attainment of tenure and the rank of an associate professor; (2) Controlling for other factors, senior union faculty are more likely to be tenured or full professors, and they appear to be able to obtain higher ranks more easily. Our thanks to the session participants at the 1996 Missouri Valley Economics Association Conference, to Professor Michael Magura of the University of Toledo who provided most of the data and to an anonymous referree for insightful comments.     

Heterogeneity and union membership determination

This paper formalizes theoretical and empirical analyses of the determination of union membership. It is argued that an important (and usually ignored) consideration affecting the union status of workers is the externalities between (potential) union members: The gain a worker derives from unionization is affected by the characteristics of the workers who already belong to the union, and the gain union members derive from admitting an additional worker to membership depends on that worker’s characteristics. Thus, two conditions must hold if a worker is to join a union: (1) unionization should increase his wage, and (2) union members must benefit from adding him. The main implication of this analysis is that in a given industry/occupation a union is more likely to form among workers withlower rents. To test this proposition, I present an empirical analysis using data from the May 1979 Current Population Survey (CPS) Public Use Sample. A procedure for measuring worker’s rent is discussed and certain relationships between rent and union membership are identified. I am most indebted to Finis Welch for many valuable comments and suggestions throughout the preparation of this study. I have also benefited from comments made by Mark Killingsworth, Kevin Murphy, Mark Plant, the editor of this journal, and an anonymous referee. The generous availability of the computer facilities at Unicon Research Corporation is appreciated.     

TEACHER UNIONS AND THE COST OF PUBLIC EDUCATION

Do teacher unions affect the cost of public education? Based upon data from two national surveys and holding measures of educational output and other factors constant, the authors of this paper find that teacher unions raise costs by 7 to 15 percent. The estimated differential is not reduced by treating unionization as endogenous, by distinguishing between large and small districts, or by distinguishing between districts in large and small cities. The union effect on cost works through teacher compensation, production technology, and factor use, and is borne primarily by taxpayers, with little or no effect on average student achievement.