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.     

Empirical evidence on the union free-rider problem: Do right-to-work laws matter?

This study provides detailed statistics by state, industry, occupation, and worker characteristics on private sector wage and salary workers covered by union collective bargaining agreements but who are not union members. A distinction is made between those workers who value the benefits of coverage more than the cost of membership, the true free riders, and those who do not, the induced riders. A probit union membership equation is estimated on a sample which excludes the covered nonmembers. Predicted probabilities are then calculated from the estimated model, yielding a quantifiable measure of the true free-rider problem. The author gratefully thanks Barry T. Hirsch, David A. Macpherson, and an anonymous referee for their constructive comments and insightful ideas. Any errors remain the sole responsibility of the author.     

A note on pensions and firm performance: First evidence from german micro data

Using a large new data set we present results from the first econometric study of the effects of pensions on firm performance in Germany. We find evidence for positive effects on wages, reduction of labor turnover, training, and profits. We use data from the Hannover Firm Panel Study which was financially supported by the Volkswagen Foundation.     

How international trade affects union wages: New evidence

We reexamine the effect of import competition on union wages using the NBER Industry Data for Imports and Exports by SIC category 1987– 1994 (Feenstra, 1996). We find that the effect of import share on union wage levels and wage growth is zero by the end of the twelve-year period covering 1983– 1994. These results suggest that although import competition initially reduced union wages in the late 1970s and early 1980s, by 1987 union wages were largely unaffected by import competition. Apparently, the diminished import effect results from increased union strength over the period, particularly in highly organized industries. The authors appreciate the comments of Barry T. Hirsch and Wm. S. Mounts. David Macpherson aided in the development of our CPS data sets.     

State plant closing laws: Their union support

Restrictions on entrepreneurial decisions have traditionally been directed at controlling the conditions of work, the physical environment, and the safety and healthfulness of products. Now, however, newly proposed industry regulation takes a different approach: to control business closing and reinvestment decisions. This approach to business regulation relies on two conventional economic arguments, externalities and monopoly power, for its justification. This paper makes a first effort at explaining statistically the political attractiveness of this regulation at the state level. We contend that the legislation will tend to receive its strongest political support in those states where the costs of the restrictions can be externalized to the rest of the country. The authors are indebted to Michael Maloney and John Warner for comments and assistance in interpreting the logit model.     

Mandatory agency shop laws as an explanation of Canada-U.S. union density divergence

X. Conclusion During a period of strength the Canadian labor movement was able to secure enduring legislation providing for their institutional protection. In the 1940s Justice Rand justified his decision by invoking the spirit underlying the operationalization of a collective bargaining regime. In the 1990s the Canadian Supreme Court continued this tradition by refusing to hollow out unions’ rights to a secure financial base and autonomy in decision making. Between the 1940s and the 1990s, the unions' voice was heard in legislatures throughout the country through the NDP. Canadian unions now benefit from, among other things, first-contract arbitration, job protection for striking workers, and a card process of union certification. Thus, although current Canadian attitudes towards unions show considerable detachment, the embeddedness of legal protections helps hold such challenges as RTW in Alberta at bay. During the same years, American labor was unable to translate its strength of numbers into gains in public policy: in fact, as union density peaked, legislation such as the Taft-Hartley Act and Landrum-Griffin Act eroded union institutional protections. An earlier version of this article appears as “Union Security in Canada,” in The Internal Governance and Organizational Effectiveness of Labor Unions, edited by S. Estreicher, H. C. Katz, and B. E. Kaufman, Kluwer Press. We are grateful for their permission to reproduce portions of the chapter. Comments from Dennis Nolan (University of South Carolina) and John Godard (University of Manitoba) are greatly appre-ciated. The article benefited from their excellent suggestions. Research assistance from Fred Jacques is acknowledged. We follow the Canadian spelling of “labour” for accuracy when it is used in citations, quotes, and titles.     

Unemployment,union density,and wages

We investigate, both theoretically and empirically, whether long-run industry unemployment rates modify the wage impact of union density on the earnings of members. Our theory suggests that the density effect increases as unemployment increases. Our empirical estimates use wage equations exclusive and inclusive of unemployment and of the interactive effect of unemployment and density in influencing wages. Based on a 1985 sample of manufacturing production workers, our findings indicate that the wage effect of union density for union workers as usually measured is only 41 percent as large as the effect when unemployment is in the model.     

The association between experiential and material expenditures and subjective well-being: New evidence from Hungarian survey data

In the last decade, a number of studies using experimental designs have stated that spending money on experiences rather than on material goods tends to make people happier. In this research we used a novel survey approach to examine the relationships between experiential and material expenditures and life satisfaction. In two studies based on cross-sectional survey data from nationally representative samples in Hungary, we estimated linear and non-linear models. We found no significant evidence supporting the greater return received when buying experiences. Even in the non-linear models the difference between the marginal utilities was not statistically significant at any expenditure rate, although the marginal utility of experiential purchases appeared to be linear, whereas the marginal utility of material purchases was rather decreasing. Nevertheless, our results suggest that a reallocation of an average person’s expenditures (spending more on experiences and less on material goods) might be associated with a slightly higher well-being.     

Consequences of work force reduction: Some employer and union evidence

Despite the popularity of workforce cutbacks in the 1990s, largescale empirical stud-ies at the bargaining unit level are rare. I explore some of the consequences of per-manent work force reduction using data from both employer and union respondents. About 56 percent of employer participants and 57 percent of local union officials reported a permanent reduction of bargaining unit employees. In comparing bargain-ing units that experienced a permanent reduction of union members, results obtained from both employers and union officials indicated a significant negative impact on over-all employee satisfaction and labor climate. Additional analyses with union respon-dents revealed that the reduction of bargaining unit employees was also associated with a higher rate of grievances and absenteeism and poorer relations between union members and their supervisors.     

The impact of changing union density on earnings inequality: Evidence from the private and public sectors

The degree of inequality in U.S. earnings has varied considerably over the past 20 years, including a dramatic, much documented rise since 1980. We examine empirically how changes in union density have contributed to these trends, using Current Population Survey data for 1977 and 1992. Inequality is measured as the mean logarithmic deviation of individual earnings from overall average earnings. A decomposition of the change in the inequality index reveals that decreases in private-sector union density have accounted for about 25 percent of the overall rise in earnings inequality during the past 15 years. Decompositions based on public-sector earnings indicate that increases in union density have produced inequality that is 29 percent below what it otherwise would have been. The analysis demonstrates that, among private sector workers, the results are sensitive to the population being studied: Changing union density accounts for 13 percent of the rise among prime aged males (a noticeably smaller fraction than found in existing studies) and only 4 percent among females and non-prime-aged males. The analysis also demonstrates that covariances between the subsamples explain why the union effect is larger in percentage terms for the whole sample than it is in either subsample.     

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.     

Self-employed immigrants and their employees: evidence from Swedish employer-employee data

We present a study of the employees of self-employed immigrants with unincorporated firms in Sweden using matched employer-employee data from 2014. Non-European immigrants are more likely than natives to have employees in their firms. Furthermore, immigrants, especially non-European immigrants, are more likely than natives to employ immigrants in their firms, and non-European immigrants are most likely to employ recently arrived non-European immigrants with low education in their firms. Males are more likely than females to have employees in their firms, but self-employed females are more likely than self-employed males to have female employees. This is the case for all immigrant groups as well as for natives. We conclude that self-employed immigrants play a role in the labour market integration process since they create employment opportunities for immigrant groups that have difficulty entering the labour market.

     

Tracking poverty with coarse data: evidence from South Africa

Household surveys often contain coarse data, which consist of a mixture of missing values, interval-censored values and point (fully-observed) values, making it difficult to construct a continuous money-metric measure of wellbeing. This paper assesses the sensitivity of poverty and inequality estimates to the multiple imputation of coarse earnings data and reported zero values using the 2001?C2006 South African Labour Force Surveys. Estimates of poverty amongst the employed are shown not to be sensitive to multiple imputation of missing and interval-censored data, but are sensitive to the treatment of workers reporting zero earnings. Poverty trends are generally robust to the choice of method, and a significant decline in poverty is evident. Inequality estimates, on the other hand, appear more sensitive to the treatment of zero values and the choice of imputation methods, and, overall, no particular trends in inequality could be discerned.     

The effects of right-to-work legislation on union outcomes: Additional evidence

The authors reexamine the role of open shop legislation in affecting union outcomes. New indices of union success are employed which include election voting behavior, the size of newly certified units, and the rate of union decertification. Three competing hypotheses are empirically tested: (1) the free rider argument predicting lower membership levels in right-to-work (RTW) areas; (2) the saturationist hypothesis predicting a higher level of organizing activity in RTW areas as a result of large concentrations of unorganized workers; and, (3) the hypothesis that legislation is vitiated by distinct organizing behaviors in RTW and nonRTW areas. Empirical results, based on SMSA data from 35 states, tend to provide support for hypotheses (2) and (3). Recently, RTW areas have experienced more prounion outcomes, and the union returns to regional attributes (measured by Chow tests) are found to be distinct in the two areas.     

Maternal employment and food produced at home: evidence from Japanese data

This paper examines whether mothers’ labor supply discourages home production, focusing on food preparation at home in Japanese families. Although empirical studies on home production are usually conducted using time use data, we use data collected by scanners, which cover daily goods purchased by over 10,000 households over 3 years. Based on the composition of daily food expenditures for foods consumed, we measure how many products are made using time-consuming processes at home, and examine if time-consuming home production is discouraged by mothers’ employment away from home. Controlling for unobserved heterogeneity among households using the panel structure of our scanner data, we first show that mothers’ out-of-home employment has a negative effect on home cooking. This effect is shared across economic classes, particularly when mothers work part-time, as compared with non-working mothers. Second, we show that this negative effect is more apparent in the low economic class. Households in this class show a particular decrease in time-consuming home cooking, especially when the mothers work part-time. Third, the smaller negative effect among the higher class can be explained by stronger health-consciousness and aversion to less-healthy products in this class.     

Reconsidering union wage effects: Surveying new evidence on an old topic

I examine evidence on private sector union wage gaps in the United States. The consensus opinion among labor economists of an average union premium of roughly 15 percent is called into question. Two forms of measurement error bias downward standard wage gap estimates. Match bias results from Census earnings imputation procedures that do not include union status as a match criterion. Downward bias is roughly equal to the proportion of workers with imputed earnings, currently about 30 percent. Misclassification of union status causes additional attenuation in union gap measures. This bias has worsened as private sector density has declined, since an increasing proportion of workers designated as union are instead nonunion workers. Corrections for misclassification and match bias lead to estimated union gaps substantially higher than standard estimates, but with less of a downward trend since the mid 1980s. Private sector union gaps corrected for these biases are estimated from the CPS for 1973–2001. The uncorrected estimate for 2001 is .13 log points. Correction for match bias increases the gap to .18 log points; further correction for misclassification bias, based on an assumed 2 percent error rate, increases the gap to .24. Reexamination of the skill-upgrading hypothesis leads to the conclusion that higher union gap estimates are plausible. The conventional wisdom of a 15 percent union wage premium warrants reexamination.