Union Density Effects In The Supermarket Industry
Higher union density (the percentage of employees in an area who belong to unions) is known to raise the wages of union members. We find that in the supermarket industry, higher density locally also leads to higher wages for non-union members. Despite this, workers who are not in unions lose ground relative to union members. For a 10% increase in local union densities in the supermarket industry it is estimated that the wages of union employees in that labor market will increase by 5.3% and by 1.2% for nonunion. Hence, the union wage premium will increase in regions with higher union densities. At the time of the last national examination of the retail industry in 1977, union influence in the retail food industry was near its peak. Subsequently union membership and influence have declined. In 1993 a reported 25.7% of supermarket employees listed themselves as union members, a decline from 29.4% in 1984 (NBER, 1995). After conducting an extensive review of wage estimation literature, we focus on the structure of wages in the supermarket industry between 1984 and 1993. The effect of union penetration in local markets on nonunion wages or the "spill-over" effect, is an important focus of this study. While it is widely accepted that the higher the union percentage in local labor markets the higher the wages for those in the union, the corresponding effect has not been closely examined for the nonunion sector. To investigate this phenomenon we first replicate as closely as possible the results of a previous supermarket wage study (Belman and Voos, 1993). Following a baseline comparison of this initial estimation, we enlarge the data set to include individuals in rural areas and from additional years. By using a more sophisticated estimation technique we find that increasing union densities positively affect union and nonunion wages. The significant results for the nonunion sector is of particular importance, as this is the first confirmation of this effect to the best of our knowledge.
|Date of creation:||1999|
|Contact details of provider:|| Postal: 317 Classroom Office Building, 1994 Buford Avenue, St. Paul, MN 55108-6040|
Web page: http://foodindustrycenter.umn.edu/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Dale L. Belman & Paula B. Voos, 1993. "Wage Effects of Increased Union Coverage: Methodological Considerations and New Evidence," ILR Review, Cornell University, ILR School, vol. 46(2), pages 368-380, January.
- Ashenfelter, Orley & Johnson, George E, 1972.
"Unionism, Relative Wages, and Labor Quality in U.S. Manufacturing Industries,"
International Economic Review,
Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 13(3), pages 488-508, October.
- Orley Ashenfelter & George E. Johnson, 1971. "Unionism, Relative Wages, and Labor Quality in U.S. Manufacturing Industries," Working Papers 382, Princeton University, Department of Economics, Industrial Relations Section..
- Voos, Paula B. & Mishel, Lawrence R., 1985. "The Union Impact on Profits: Evidence from the Supermarket Industry," Working Papers 203012, University of Wisconsin-Madison, Department of Agricultural and Applied Economics, Food System Research Group.
- Budd, John W & Na, In-Gang, 2000. "The Union Membership Wage Premium for Employees Covered by Collective Bargaining Agreements," Journal of Labor Economics, University of Chicago Press, vol. 18(4), pages 783-807, October.
- Budd, J.W. & Na, I.G., 1994. "The Union Membership Wage Premium for Employees Covered by Collective Bargaining Agreements," Papers 94-09, Minnesota - Industrial Relations Center.
- James J. Heckman, 1976. "The Common Structure of Statistical Models of Truncation, Sample Selection and Limited Dependent Variables and a Simple Estimator for Such Models," NBER Chapters,in: Annals of Economic and Social Measurement, Volume 5, number 4, pages 475-492 National Bureau of Economic Research, Inc.
- Jean Kinsey & Ben Senauer, 1996. "Consumer Trends and Changing Food Retailing Formats," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 78(5), pages 1187-1191.
- Kinsey, Jean D. & Senauer, Benjamin, 1996. "Food Marketing In An Electronic Age: Implications For Agricultural Producers," Working Papers 14303, University of Minnesota, The Food Industry Center.
- Kathryn L. Shaw, 1984. "A Formulation of the Earnings Function Using the Concept of Occupational Investment," Journal of Human Resources, University of Wisconsin Press, vol. 19(3), pages 319-340.
- Perloff, Jeffrey M & Sickles, Robin C, 1987. "Union Wage, Hours, and Earnings Differentials in the Construction Industry," Journal of Labor Economics, University of Chicago Press, vol. 5(2), pages 174-210, April.
- Kahn, Lawrence M, 1977. "Union Impact: A Reduced Form Approach," The Review of Economics and Statistics, MIT Press, vol. 59(4), pages 503-507, November.
- Schmidt, Peter & Strauss, Robert P, 1976. "The Effect of Unions on Earnings and Earnings on Unions: A Mixed Logit Approach," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 17(1), pages 204-212, February.
- Mundlak, Yair, 1978. "On the Pooling of Time Series and Cross Section Data," Econometrica, Econometric Society, vol. 46(1), pages 69-85, January.
- Daniel Diermeier & Roger B. Myerson, 1994. "Bargaining," Discussion Papers 1089, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Lee, Lung-Fei, 1978. "Unionism and Wage Rates: A Simultaneous Equations Model with Qualitative and Limited Dependent Variables," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 19(2), pages 415-433, June.
- Robinson, Chris, 1989. "Union Endogeneity and Self-selection," Journal of Labor Economics, University of Chicago Press, vol. 7(1), pages 106-112, January.
- Duncan, Gregory M & Leigh, Duane E, 1985. "The Endogeneity of Union Status: An Empirical Test," Journal of Labor Economics, University of Chicago Press, vol. 3(3), pages 385-402, July. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:ags:umrfwp:14313. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search)
If references are entirely missing, you can add them using this form.