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Union Rent Seeking and Import Competition in U.S. Manufacturing

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  • RICHARD J. CEBULA
  • USHA NAIR-REICHERT

Abstract

We investigate how union rent seeking is affected by import competition. The myopic theory of union rent extraction assumes that unions attempt to maximize current rents. In such a scenario, unionization, even with import competition, may increase the rents earned by union workers. On the other hand, import competition may also induce unions to favor a more cooperative strategy in order to maintain insider employment. This empirical investigation at the industry level using data from 1975-1984 focuses on union rent seeking. This focus differentiates our study from previous work emphasizing union wages. The results indicate that union membership significantly and positively affects union rent seeking in the U.S. manufacturing sector, whereas import competition reduces union rents. Surprisingly, however, there is no compelling evidence that union rents are higher in more unionized import-competing industries as compared to the less unionized ones.

Suggested Citation

  • Richard J. Cebula & Usha Nair-Reichert, 2000. "Union Rent Seeking and Import Competition in U.S. Manufacturing," Journal of Labor Research, Transaction Publishers, vol. 21(3), pages 477-487, July.
    • Handle: RePEc:tra:jlabre:v:21:y:2000:i:3:p:477-487
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    Cited by:

    1. 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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