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Sluggish Institutions in a Dynamic World: Can Unions and Industrial Competition Coexist?

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  • Barry T. Hirsch

Abstract

During the 1930s and 1940s, collective bargaining emerged as the workplace governance norm in much of the U.S. industrial sector. Following its peak in the 1950s, union density in the U.S. private sector fell steadily, to only 7.4 percent in 2006. Governance shifted from a formalized union norm to one of constrained managerial discretion. In competitive and dynamic economic environments, a union tax on company earnings and slow response to economic shocks combine to produce poor performance by union companies. Two industries -- automotives and airlines -- are used to illustrate these points. If worker-based institutions are to flourish, they must add value and permit companies to perform at levels similar to those obtained under evolving nonunion governance norms.

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File URL: http://www.aeaweb.org/articles.php?doi=10.1257/jep.22.1.153
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Bibliographic Info

Article provided by American Economic Association in its journal Journal of Economic Perspectives.

Volume (Year): 22 (2008)
Issue (Month): 1 (Winter)
Pages: 153-176

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Handle: RePEc:aea:jecper:v:22:y:2008:i:1:p:153-176

Note: DOI: 10.1257/jep.22.1.153
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References

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Citations

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Cited by:
  1. MORIKAWA Masayuki, 2008. "What Do Japanese Unions Do for Productivity?: An Empirical Analysis Using Firm-Level Data," Discussion papers 08027, Research Institute of Economy, Trade and Industry (RIETI).
  2. Barry T. Hirsch, 2008. "Wage Gaps Large and Small," Southern Economic Journal, Southern Economic Association, vol. 74(4), pages 914-933, April.
  3. Fang, Tony & Ge, Ying, 2012. "Unions and firm innovation in China: Synergy or strife?," China Economic Review, Elsevier, vol. 23(1), pages 170-180.
  4. Greer, Mark, 2009. "Is it the labor unions' fault? Dissecting the causes of the impaired technical efficiencies of the legacy carriers in the United States," Transportation Research Part A: Policy and Practice, Elsevier, vol. 43(9-10), pages 779-789, November.
  5. Walsh, Frank & Strobl, Eric, 2009. "Recent Trends in Trade Union Membership in Ireland," The Economic and Social Review, Economic and Social Studies, vol. 40(1), pages 117–138.
  6. Edelman, Peter B. & Holzer, Harry J., 2013. "Connecting the Disconnected: Improving Education and Employment Outcomes Among Disadvantaged Youth," IZA Policy Papers 56, Institute for the Study of Labor (IZA).
  7. Burawoy, Michael, 2008. "The Public Turn: From Labor Process to Labor Movement," Institute for Research on Labor and Employment, Working Paper Series qt7vd7859r, Institute of Industrial Relations, UC Berkeley.
  8. Miguel Ricaurte, 2009. "Interindustry Wage Differences: An Empirical Review," Working Papers Central Bank of Chile 525, Central Bank of Chile.
  9. Brändle, Tobias & Baumann, Florian, 2013. "Union Bargaining and Intra-Industry Productivity Differentials: Theory and Evidence from Germany," Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 79852, Verein für Socialpolitik / German Economic Association.
  10. Miguel Ricaurte, 2010. "The Role of Labor Markets in Structural Change," Working Papers Central Bank of Chile 584, Central Bank of Chile.
  11. Fernando Rios-Avila, 2014. "Unions and Economic Performance in Developing Countries: Case Studies from Latin America," Economics Working Paper Archive wp_787, Levy Economics Institute.
  12. Pierre Brochu & Louis-Philippe Morin, 2012. "Union Membership and Perceived Job Insecurity: Thirty Years of Evidence from the American General Social Survey," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 65(2), pages 263-285, April.
  13. Morikawa, Masayuki, 2010. "Labor unions and productivity: An empirical analysis using Japanese firm-level data," Labour Economics, Elsevier, vol. 17(6), pages 1030-1037, December.
  14. Hirsch, Barry, 2013. "An Anatomy of Public Sector Unions," IZA Discussion Papers 7313, Institute for the Study of Labor (IZA).
  15. Christian Nsiah & Chen Wu & Walter Mayer, 2012. "An analysis of US State’s export performance in the Asian Market," The Annals of Regional Science, Springer, vol. 49(2), pages 533-550, October.

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