Wage and nonwage outcomes in collective bargaining: Determinants and tradeoffs

Using unskilled labor wage rates and union contract scores derived from a sample of 500 U.S. manufacturing contracts, this study finds that in 1975 there was considerable variation in unions’ abilities to deliver higher wages and desirable nonwage contractual provisions to their members (though it is clear that the stronger unions have bargained high levels of both wages and nonwage items). There are a variety of union power, employee quality, union preference, and employer cost variables which impact upon the bargaining choices made between wages and nonwage provisions, and it appears that union strength tilts the compensation package toward wages. The authors, associate professors at the University of Illinois, are very grateful to Christopher Pawlowicz, Ronald Seeber, and Roger Wolters for their help in gathering data. They also are grateful to the Office of the Assistant Secretary for Policy, Evaluation and Research of the U.S. Department of Labor and to the Research Board of the University of Illinois for financially supporting this research. Such support in no way implies, however, that the Department or the University endorses the methods or conclusions in this study.