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How Successful Have Trade Unions Been? A Utility-Based Indicator of Union Well-Being

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Author Info
John Pencavel

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Abstract

Can conventional economic analysis help in defining and measuring the success of labor unions? In this paper, a general indicator of union welfare is proposed and particular expressions for the wage and employment objectives of unions are rearranged to derive measures of union success or welfare. These indicators combine two measures: union density and the relative union-nonunion wage gap. The indicators are applied to describe the movement of union welfare in the United States over the past eighty years, the differences in union success among groups of U.S. workers, and the variation in union well-being across countries. The results suggest that U.S. unions’ success peaked in the 1950s and 1960s; they have tended to benefit black workers, especially black men, more than other groups; and in recent decades a very low unionization rate has contributed to make them less successful, overall, than unions in other countries with similar labor markets.

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Article provided by ILR Review, ILR School, Cornell University in its journal ILR Review.

Volume (Year): 62 (2009)
Issue (Month): 2 (January)
Pages: 147-156
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Handle: RePEc:ilr:articl:v:62:y:2009:i:2:p:147-156

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  1. Brown, James N & Ashenfelter, Orley, 1986. "Testing the Efficiency of Employment Contracts," Journal of Political Economy, University of Chicago Press, vol. 94(3), pages S40-S87, June. [Downloadable!] (restricted)
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  2. Ashenfelter, Orley, 1972. "Racial Discrimination and Trade Unionism," Journal of Political Economy, University of Chicago Press, vol. 80(3), pages 435-64, May-June. [Downloadable!] (restricted)
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  3. Oswald, Andrew J, 1985. " The Economic Theory of Trade Unions: An Introductory Survey," Scandinavian Journal of Economics, Blackwell Publishing, vol. 87(2), pages 160-93.
  4. Dertouzos, James N & Pencavel, John H, 1981. "Wage and Employment Determination under Trade Unionism: The International Typographical Union," Journal of Political Economy, University of Chicago Press, vol. 89(6), pages 1162-81, December. [Downloadable!] (restricted)
  5. Farber, Henry S, 1978. "Individual Preferences and Union Wage Determination: The Case of the United Mine Workers," Journal of Political Economy, University of Chicago Press, vol. 86(5), pages 923-42, October. [Downloadable!] (restricted)
  6. Pencavel, John & Hartsog, Catherine E, 1984. "A Reconsideration of the Effects of Unionism on Relative Wages and Employment in the United States, 1920-1980," Journal of Labor Economics, University of Chicago Press, vol. 2(2), pages 193-232, April. [Downloadable!] (restricted)
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  7. C. Bowdler & L. Nunziata, 2007. "Trade Union Density and Inflation Performance: Evidence from OECD Panel Data," Economica, London School of Economics and Political Science, vol. 74(293), pages 135-159, 02. [Downloadable!] (restricted)
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