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The Effect of the Union Wage Differential on Management Opposition and Union Organizing Success

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  • Richard B. Freeman

Abstract

This paper argues that under current U.S. institutional arrangements, in which managements opposition to unions is as important as workers and unions,the magnitude of the union wage premium actually reduces organization rather than increasing it. It reduces organizing success by lowering profits, thus giving management a greater incentive to oppose unions. It shows that in the traditional monopoly model, any given premium can cause management to donate more resources to opposing a union than workers will donate to organizing. Empirical evidence from NLRB elections supports the model in which larger premiums induce greater opposition and thus reduce union organizing success.

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File URL: http://www.nber.org/papers/w1748.pdf
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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 1748.

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Date of creation: Oct 1985
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Publication status: published as Freeman, Richard B."The Effect of the Union Wage Differential on Management Opposition and Union Organizing Success," American Economic Review, May 1986.
Handle: RePEc:nbr:nberwo:1748

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Cited by:
  1. Elisabetta Magnani & David Prentice, 2000. "Did Globalization Reduce Unionisation? Evidence from U.S. Manufacturing," Working Papers 2000.17, School of Economics, La Trobe University.
  2. Daniel Maceira & Maria Victoria Murillo, 2001. "Reforma del sector social en América Latina y el papel de los sindicatos," Research Department Publications 4276, Inter-American Development Bank, Research Department.
  3. Rafael Gomez & Konstantinos Tzioumis, 2006. "What do unions do to executive compensation?," LSE Research Online Documents on Economics 19865, London School of Economics and Political Science, LSE Library.
  4. Pablo Ruiz Verdú, 2002. "Employer Behavior When Workers Can Unionize," Business Economics Working Papers wb020803, Universidad Carlos III, Departamento de Economía de la Empresa.
  5. Ruiz-Verdu, Pablo, 2007. "The economics of union organization: Efficiency, information and profitability," Labour Economics, Elsevier, vol. 14(5), pages 848-868, October.
  6. Elisabetta Magnani & David Prentice, 2006. "Outsourcing and Unionisation: A tale of misallocated (resistance) resources," Working Papers 2006.03, School of Economics, La Trobe University.
  7. David Neumark & Michael L. Wachter, 1992. "Union Threat Effects and Nonunion Industry Wage Differentials," NBER Working Papers 4046, National Bureau of Economic Research, Inc.
  8. Richard Disney & Amanda Gosling & Stephen Machin, 1994. "British unions in decline: an examination of the 1980s fall in trade union recognition," IFS Working Papers W94/04, Institute for Fiscal Studies.
  9. Corneo, Giacomo, 1995. "Social custom, management opposition, and trade union membership," European Economic Review, Elsevier, vol. 39(2), pages 275-292, February.
  10. Richard B. Freeman, 1987. "Contraction and Expansion: The Divergence of Private Sector and Public Sector Unionism in tht U.S," NBER Working Papers 2399, National Bureau of Economic Research, Inc.
  11. Daniel Maceira & Maria Victoria Murillo, 2001. "Social Sector Reform in Latin America and the Role of Unions," Research Department Publications 4275, Inter-American Development Bank, Research Department.

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