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Union wages, strikes and profits

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  • Stephen Blumenfeld
  • Andres G. Victorio

Abstract

A model is used to propose the countervailing effects of a strike upon wages. Wages may rise if unions succeed in obtaining concessions. They may fall if firms succeed in neutralizing the potential damage to their profits. Some US evidence suggests that wages fall whenever strikes increase in intensity, somewhat corroborating the view that unions have continued to become weaker over time.

Suggested Citation

  • Stephen Blumenfeld & Andres G. Victorio, 2012. "Union wages, strikes and profits," Applied Economics Letters, Taylor & Francis Journals, vol. 19(6), pages 517-520, April.
    • Handle: RePEc:taf:apeclt:v:19:y:2012:i:6:p:517-520
    DOI: 10.1080/13504851.2011.587760
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    References listed on IDEAS

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    1. David Card, 1990. "Strikes and Wages: A Test of an Asymmetric Information Model," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 105(3), pages 625-659.
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    4. Sparks, Gordon R & Wilton, David A, 1971. "Determinants of Negotiated Wage Increases: An Empirical Analysis," Econometrica, Econometric Society, vol. 39(5), pages 739-750, September.
    5. Orley Ashenfelter & John H. Pencavel, 1969. "American Trade Union Growth: 1900–1960," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 83(3), pages 434-448.
    6. D. A. L. Auld & L. N. Christofides & R. Swidinsky & D. A. Wilton, 1981. "The Effect of Settlement Stage on Negotiated Wage Settlements in Canada," ILR Review, Cornell University, ILR School, vol. 34(2), pages 234-244, January.
    7. Oliver Hart, 1989. "Bargaining and Strikes," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 104(1), pages 25-43.
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