Product Market Competition, Union Organizing Activity, and Employer Resistance

We develop and estimate a model of the union’s optimal extent of organizing activity that accounts for the decision of employers regarding resistance to union organizing. The central exogenous variable in the analysis is the quantity of quasi-rents per worker available to be split between unions and employers. We measure available quasi-rents per worker as the difference per worker between total industry revenues net of raw materials costs and labor costs evaluated at the opportunity cost of the workers. Using two-digit industry level data for thirty-five U.S. industries for the period 1955 through 1986, we find that both organizing activity and employer resistance to unionization are positively related to available quasi-rents per worker. However, there is still a strong negative trend in union organizing activity and a strong positive trend in employer resistance after controlling for quasi-rents per worker. Thus, the explanation for the decline in union organizing activity and the increase in employer resistance to unionization since the mid 1970’s lies elsewhere.