Union and nonunion wages at the firm level: a combined institutional and econometric analysis

Article Abstract:

This paper presents an analysis of union-nonunion wage differences at the intra-firm level. At this level of analysis, modeling of the union effect can be informed by a historical overview of the organizational context of unionization, which is not as feasible at other levels of analysis. The findings suggest that a simultaneous equation (2-stage) model, in which union status is treated as an endogenous variable, is not appropriate in this case. Moreover, OLS estimations of the union effect on wages from a one-stage model in which union status is exogenous are found to be efficient and unbiased. The study suggests that combining institutional details of the organizational context with econometric analysis facilitates a better understanding of not only the magnitude of wage differences but also of how the differences may be interpreted in the context of industrial relations. (Reprinted by permission of the publisher.)

Analysis, Wage surveys

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The effect of type of union on member-nonmember wage differentials

Article Abstract:

The union-nonunion wage differential can be decomposed into bargaining and membership effects. While some analysts suggest that they are not separable and that bargaining power is a function of membership density, others argue that they are separable and that the former derives from monopoly power while the latter stems from socialization. Our results support the latter view. We derive estimates of bargaining and membership effects for workers covered by national, industrial, and craft union contracts as well as for all covered workers taken together. Since industrial and craft unions differ in structure and organization, we expect differences in the socialization effects among types of unions. It is clear from our results that union membership per se in each case gives a large positive wage advantage. (Reprinted by permission of the publisher.)

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Unions and jobs: the U.S. auto industry

Article Abstract:

The downturn in the number of new jobs in manufacturing industries in general and the automobile industry in particular in the U.S. is changing the structure of the U.S. economy, but the United Automobile Workers union still clings to the premise that the company is the enemy, which has led indirectly to the increased exporting of manufacturing jobs overseas. The number of jobs in the U.S. has increased by 30 million since 1970, while in the same period the number of jobs has declined in Western Europe by three million and increased by only seven million in Japan. It is argued that the increase in nonunion jobs in this period is the reason for the continued rise in the number of U.S. jobs. The history of and outlook for unionism in U.S. manufacturing in general and the automobile industry in particular is discussed.

Employment, Automobile industry, Labor relations, United Automobile Workers

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