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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.

Suggested Citation

  • Richard B. Freeman, 1985. "The Effect of the Union Wage Differential on Management Opposition and Union Organizing Success," NBER Working Papers 1748, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:1748
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    Cited by:

    1. 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.
    2. Magnani, Elisabetta & Prentice, David, 2003. "Did globalization reduce unionization? Evidence from US manufacturing," Labour Economics, Elsevier, vol. 10(6), pages 705-726, December.
    3. 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.
    4. Daniel Maceira & Maria Victoria Murillo, 2001. "Social Sector Reform in Latin America and the Role of Unions," IDB Publications (Working Papers) 1419, Inter-American Development Bank.
    5. Richard Freeman & Jeffrey Pelletier, 1990. "The Impact of Industrial Relations Legislation on British Union Density," British Journal of Industrial Relations, London School of Economics, vol. 28(2), pages 141-164, July.
    6. Rafael Gomez & Konstantinos Tzioumis, 2006. "What Do Unions Do to Executive Compensation?," CEP Discussion Papers dp0720, Centre for Economic Performance, LSE.
    7. 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.
    8. David Neumark & Michael L. Wachter, 1992. "Union Threat Effects and Nonunion Industry Wage Differentials," NBER Working Papers 4046, National Bureau of Economic Research, Inc.
    9. Elisabetta Magnani & David Prentice, 2010. "Outsourcing And Unionization: A Tale Of Misallocated (Resistance) Resources," Economic Inquiry, Western Economic Association International, vol. 48(2), pages 460-482, April.
    10. Ashwini K. Agrawal, 2012. "Corporate Governance Objectives of Labor Union Shareholders: Evidence from Proxy Voting," Review of Financial Studies, Society for Financial Studies, vol. 25(1), pages 187-226.
    11. Richard Disney & Amanda Gosling & Stephen Machin, 1994. "British Unions in Decline: An Examination of the 1980s Fall in Trade Union Recognition," NBER Working Papers 4733, National Bureau of Economic Research, Inc.
    12. Ruiz-Verdu, Pablo, 2007. "The economics of union organization: Efficiency, information and profitability," Labour Economics, Elsevier, vol. 14(5), pages 848-868, October.
    13. Ruiz-Verdú, Pablo, 2002. "Employer behavior when workers can unionize," DEE - Working Papers. Business Economics. WB wb020803, Universidad Carlos III de Madrid. Departamento de Economía de la Empresa.
    14. Corneo, Giacomo, 1995. "Social custom, management opposition, and trade union membership," European Economic Review, Elsevier, vol. 39(2), pages 275-292, February.

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