Labor Unions, Bargaining & Discrimination: Analyzing Membership, Laws & Economic Impact, Slides of Economics

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Collective Bargaining,DiscriminationLabor Unions, and

Why Unions?

Union Membership by Occupation, 2008

Professional and Technical^ Install and Repair^ Transportation Construction^ Production 0 5 10 15 20 Clerical Workers Service Workers^ Sales Workers^ Managers Percent Union Membership Docsity.com

Public Sector Status, 2008Union Membership by

Unionization by State

• Union Membership by Industry,
• 17.0 9.7 6.1 25.9 10.
• 7.2 10.0 8.0 7.2 9.5 9.3 7.
• 5.9 6.0 7.
• 14.0 7.3 6.8 5.8 4.2 6.5 4.1 5.
• 23.8 16.
• 14.7 21.0 13.1 11.5 8.6 16.8 11.9 16.1 17.2 13.0 11.2 20.4 15.5 15.5 25.4 12.9 14.7 11.3 13.5 14.8 12.2 11.
• CT MA MD NJ RI 21.6 16.0 15.3 16.

Unionism’s Rise and Fall (^101505)

Percent Union Membership (^1880 1900 1920 1940 1960 1980 2000) Docsity.com

• • Change in labor lawsStructural Hypothesis – – Shift to servicesGlobalizationUnionism’s Decline

• Managerial Opposition Hypothesis^ –^ –^ –^ – –^ Shift to sunbeltSmaller firmsDemographics: women, youngPart-time workReagan and PATCO

• Substitution Hypothesis – Growth of gov’t provided benefits Docsity.com

• • Competitive market: WEconomic models: – MaximizersModels of Union Behavior 0 , L 0

• – Monopoly unionEfficient contracts^ •^ •^ •^ Wage rates?Employment?Wage bill?^ W^ W^0 u^ I^1 I^2 Lu L 0^ π^1^ S Labor D

Why Do Strikes Occur?

• • Accident ModelAsymmetric Information Models – – – Misperceptions regarding other’s concession curveInfo gap between union leadership and membershipInfo gap between union and firm^ Expected Strike Length^ Union Resistance

W^ $ t^ Employer Concession

• • • Wage advantageEfficiency and productivityProfitabilityEconomic Impact of Unions

• • Distribution of earningsMacroeconomic effects

Union Wage Advantage

• • • • • • Spillover effect: laid-off union workers spill over into non-union sectorThreat effect: non-union firms pay higher wages (WProduct market effect: shift consumer demand to non-union marketsWait unemployment effect: mitigates spillover effectSuperior worker effect: firms hire better workersCWD effect: unions jobs have fewer amenities^ D T) to deter union

W WN (^) U LU LN S^ U^ S^ N W WS (^) T LN LS^ S D^ N^ S^ spill Union sector Non-Union sector

Union Wage Advantage

• Nearly all studies find that unions reduce profits. – If unions reduce profits in monopolistic industries, then no efficiencyloss occurs.Firm Profitability

-^ Voos and Mishell (1986): unionization causes 20% to 23% reduction in profits If unions reduce profits in competitive industries, then an efficiencyloss occurs since firms will leave the industry. (Output will be lower andprices higher) The empirical evidence is mixed on whether there is an efficiency loss.

• Increasing inequality – – Spillover effect lowers non-union wagesIncrease wages of skilled blue-collar workersDistribution of Earnings

• Decrease inequality – – relative to unskilled blue-collar workersEqualize wages within firmsEqualize wages across firms

– Reduce the white-collar/blue-collar differential^ Empirical evidence is that unions reduceearnings inequality on net Docsity.com