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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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    1. 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.
    2. G L Clark & K Johnston, 1987. "The Geography of US Union Elections 1: The Crisis of US Unions and a Critical Review of the Literature," Environment and Planning A, , vol. 19(1), pages 33-57, January.
    3. repec:aia:aiaswp:wp4 is not listed on IDEAS
    4. Magnani, Elisabetta & Prentice, David, 2003. "Did globalization reduce unionization? Evidence from US manufacturing," Labour Economics, Elsevier, vol. 10(6), pages 705-726, December.
    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. 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.
    7. David Neumark & Michael L. Wachter, 1992. "Union Threat Effects and Nonunion Industry Wage Differentials," NBER Working Papers 4046, National Bureau of Economic Research, Inc.
    8. Robin Naylor, 1995. "Unions in Decline?," Nordic Journal of Political Economy, Nordic Journal of Political Economy, vol. 22, pages 127-142.
    9. Ruiz-Verdu, Pablo, 2007. "The economics of union organization: Efficiency, information and profitability," Labour Economics, Elsevier, vol. 14(5), pages 848-868, October.
    10. 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.
    11. G L Clark & K Johnston, 1987. "The Geography of US Union Elections 4: Patterns of Close Elections and Determinants of the Margins of Victory and Loss (the International Brotherhood of Electrical Workers Union and the United Auto Wo," Environment and Planning A, , vol. 19(4), pages 447-469, April.
    12. Ashwini K. Agrawal, 2012. "Corporate Governance Objectives of Labor Union Shareholders: Evidence from Proxy Voting," The Review of Financial Studies, Society for Financial Studies, vol. 25(1), pages 187-226.
    13. Gomez, Rafael & Tzioumis, Konstantinos, 2006. "What do unions do to executive compensation?," LSE Research Online Documents on Economics 19865, London School of Economics and Political Science, LSE Library.
    14. Corneo, Giacomo, 1995. "Social custom, management opposition, and trade union membership," European Economic Review, Elsevier, vol. 39(2), pages 275-292, February.
    15. 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.
    16. Maceira, Daniel & Murillo, Maria Victoria, 2001. "Social Sector Reform in Latin America and the Role of Unions," IDB Publications (Working Papers) 1419, Inter-American Development Bank.
    17. Dale Belman & Paula B. Voos, 2006. "Union Wages and Union Decline: Evidence from the Construction Industry," ILR Review, Cornell University, ILR School, vol. 60(1), pages 67-87, October.
    18. Sigfrido Lee & Carmen Urizar H., 2003. "The Effects of Unions on Productivity: Evidence from Large Coffee Producers in Guatemala," Research Department Publications 3166, Inter-American Development Bank, Research Department.
    19. Alexey Levkov, 2010. "Branching of banks and union decline," Supervisory Research and Analysis Working Papers QAU10-7, Federal Reserve Bank of Boston.
    20. 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.
    21. 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.

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