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

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  • John Pencavel

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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Bibliographic Info

Article provided by ILR Review, Cornell University, ILR School 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. Oswald, Andrew J, 1985. " The Economic Theory of Trade Unions: An Introductory Survey," Scandinavian Journal of Economics, Wiley Blackwell, vol. 87(2), pages 160-93.
  2. Orley Ashenfelter & James N. Brown, 1985. "Testing the Efficiency of Employment Contracts," Working Papers 573, Princeton University, Department of Economics, Industrial Relations Section..
  3. Layard, Richard & Nickell, Stephen & Jackman, Richard, 1991. "Unemployment: Macroeconomic Performance and the Labour Market," OUP Catalogue, Oxford University Press, number 9780198284345, September.
  4. Orley Ashenfelter, 1971. "Racial Discrimination and Trade Unionism," Working Papers 390, Princeton University, Department of Economics, Industrial Relations Section..
  5. Johnson, George E, 1985. " The Economic Theory of Trade Unions-An Introductory Survey: Comment," Scandinavian Journal of Economics, Wiley Blackwell, vol. 87(2), pages 194-96.
  6. Rees, Albert, 1989. "The Economics of Trade Unions," University of Chicago Press Economics Books, University of Chicago Press, edition 1, number 9780226707105, June.
  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.
  8. 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.
  9. 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.
  10. Booth,Alison L., 1994. "The Economics of the Trade Union," Cambridge Books, Cambridge University Press, number 9780521464673.
  11. 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.
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Cited by:
  1. Hirsch, Boris & Schnabel, Claus, 2011. "Let's take bargaining models seriously: The decline in union power in Germany, 1992 - 2009," IWQW Discussion Paper Series 10/2011, Friedrich-Alexander-Universität Erlangen-Nürnberg, Institut für Wirtschaftspolitik und Quantitative Wirtschaftsforschung (IWQW).
  2. Janelle Jones & John Schmitt, 2014. "Union Advantage for Black Workers," CEPR Reports and Issue Briefs 2014-04, Center for Economic and Policy Research (CEPR).

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