Collective Bargaining Arrangements Closed Shops and Relative Pay

It is usually felt that workers in the union sector of the economy earn more than they would if they worked in the non-union sector ; and similarly that on average plants pay higher wages than comparable non-unionised plants. Recent evidence suggests that the average union/non-union ceteris paribus wage differential in Britain may in fact be quite small, but there is considerable variation around this average and that some groups of workers may obtain considerably larger differentials. Stewart (1983a) estimated a mean individual union membership differential for the manufacturing sector of around 8%, but found considerable variation with individual characteristics and across industries. Mulvey (1976), using aggregate industry-level data on coverage by collective agreements, found variation in the differential according to the level of bargaining and Geroski and Stewart (1986) found some evidence of difference in the differential according to the extend of coverage itself. The cumulated evidence clearly indicates that constancy of the diffential is not appropriate maintained hypothesis.