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The Effect of International Competition on Union and Nonunion Wages

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  • David A. MacPherson
  • James B. Stewart

Abstract

Using data from the May 1975 to 1981 Current Population Surveys, the authors examine the impact of international competition on union and nonunion wages. Two findings emerge from the study. First, international competition, measured by import share, was a significant determinant of union and nonunion wages: a 10% rise in the import share lowered the union wage differential by about 2%. Second, the net negative effect of a given import share on both union and nonunion wages decreased sharply in absolute magnitude as the percentage organized increased.

Suggested Citation

  • David A. MacPherson & James B. Stewart, 1990. "The Effect of International Competition on Union and Nonunion Wages," ILR Review, Cornell University, ILR School, vol. 43(4), pages 434-446, July.
    • Handle: RePEc:sae:ilrrev:v:43:y:1990:i:4:p:434-446
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    1. repec:eee:labchp:v:3:y:1999:i:pb:p:2215-2288 is not listed on IDEAS
    2. Jirjahn, Uwe, 2024. "Corporate Globalization and Worker Representation," IZA Discussion Papers 16727, Institute of Labor Economics (IZA).
    3. Magnani, Elisabetta & Prentice, David, 2003. "Did globalization reduce unionization? Evidence from US manufacturing," Labour Economics, Elsevier, vol. 10(6), pages 705-726, December.
    4. Jacqueline Agesa & Kristen Monaco, 2006. "The Decreasing Influence Of Domestic Market Structure On Racial Earnings Differentials: 1984 To 1996," Contemporary Economic Policy, Western Economic Association International, vol. 24(2), pages 224-236, April.
    5. Gaston, Noel & Trefler, Daniel, 1995. "Union wage sensitivity to trade and protection: Theory and evidence," Journal of International Economics, Elsevier, vol. 39(1-2), pages 1-25, August.
    6. Jacqueline Agesa & Richard U. Agesa, 2012. "Imports, unionization and racial wage discrimination in the US," Applied Economics, Taylor & Francis Journals, vol. 44(3), pages 339-350, January.
    7. Persyn, Damiaan, 2008. "Trade as a Wage Disciplining Device," IZA Discussion Papers 3786, Institute of Labor Economics (IZA).
    8. George J. Borjas & Richard B. Freeman & Lawrence F. Katz, 1992. "On the Labor Market Effects of Immigration and Trade," NBER Chapters, in: Immigration and the Work Force: Economic Consequences for the United States and Source Areas, pages 213-244, National Bureau of Economic Research, Inc.
    9. Jorge Saba Arbache, 1999. "Trade Liberalisation and Insider Power: The Case of Brazil," Studies in Economics 9902, School of Economics, University of Kent.
    10. Debasmita Basak & Arijit Mukherjee, 2021. "Competition, External Economies of Scale, and Unionized Wage," Journal of Industry, Competition and Trade, Springer, vol. 21(4), pages 585-592, December.
    11. Keith Bender, 1997. "Specification issues in the modelling of union status determination," Applied Economics Letters, Taylor & Francis Journals, vol. 4(8), pages 481-485.
    12. Arijit Mukherjee, 2012. "Product market competition, open shop union and wage," Journal of Economics, Springer, vol. 107(2), pages 183-190, October.
    13. Grodzicki, Maciej J. & Możdżeń, Michał, 2021. "Central and Eastern European economies in a Goldilocks age: A model of labor market institutional choice," Economic Modelling, Elsevier, vol. 104(C).
    14. Paulo Bastos & Udo Kreickemeier & Peter W. Wright, 2010. "Open‐shop unions and product market competition," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 43(2), pages 640-662, May.
    15. De Santis, Roberto A., 1997. "The impact of a customs union with the EU on Turkey's welfare, employment and income distribution: An AGE analysis," Kiel Working Papers 843, Kiel Institute for the World Economy (IfW Kiel).
    16. Minsik Choi, 2001. "Threat Effect of Foreign Direct Investment on Labor Union Wage Premium," Working Papers wp27, Political Economy Research Institute, University of Massachusetts at Amherst.

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