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Public Policy and Participation in Political Interest Groups: An Analysis of Minimum Wages, Labor Unions, and Effective Advocacy

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  • Jeffrey Clemens
  • Michael R. Strain

Abstract

Why do individuals join interest groups? Through what channels do interest groups and public policy affect one another? We study these questions by analyzing the interplay among labor unions, minimum wages, news coverage, and public opinion. Over the past decade, labor unions have played a significant role in advocating for state and federal minimum wage increases. Over this period, we find that each dollar in minimum wage increase predicts a 5 percent increase (0.3 pp) in the union membership rate among individuals age 16–40. We document four additional facts that shed light on the mechanisms that may underlie this finding. First, while we find increases overall in union membership, we find declines among the minimum wage’s most direct beneficiaries. This is consistent with a classic “free-riding” hypothesis. Second, we find increases in union membership among much broader groups that are not directly affected by the minimum wage. Third, we find that minimum wage increases predict increases in unions’ favorability ratings among the public. Fourth, we find that events in the legislative histories of minimum wage increases predict increases in counts of newspaper articles that simultaneously discuss the minimum wage and key players in the labor movement. Overall coverage of organized labor shifts towards articles that discuss the minimum wage. These facts are consistent with models in which a desire to affiliate with “effective advocacy” is an important driver of the decision to participate in unions and other politically oriented groups.

Suggested Citation

  • Jeffrey Clemens & Michael R. Strain, 2020. "Public Policy and Participation in Political Interest Groups: An Analysis of Minimum Wages, Labor Unions, and Effective Advocacy," NBER Working Papers 27902, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:27902
    Note: LS PE POL
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    References listed on IDEAS

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    1. Timothy Besley & Anne Case, 2003. "Political Institutions and Policy Choices: Evidence from the United States," Journal of Economic Literature, American Economic Association, vol. 41(1), pages 7-73, March.
    2. Falk, Armin & Fischbacher, Urs, 2006. "A theory of reciprocity," Games and Economic Behavior, Elsevier, vol. 54(2), pages 293-315, February.
    3. Jeffrey Clemens & Michael R. Strain, 2017. "Estimating the Employment Effects of Recent Minimum Wage Changes: Early Evidence, an Interpretative Framework, and a Pre-Commitment to Future Analysis," NBER Working Papers 23084, National Bureau of Economic Research, Inc.
    4. Jeffrey Clemens & Lisa B. Kahn & Jonathan Meer, 2021. "Dropouts Need Not Apply? The Minimum Wage and Skill Upgrading," Journal of Labor Economics, University of Chicago Press, vol. 39(S1), pages 107-149.
    5. Richard B. Freeman, 1998. "Spurts in Union Growth: Defining Moments and Social Processes," NBER Chapters, in: The Defining Moment: The Great Depression and the American Economy in the Twentieth Century, pages 265-296, National Bureau of Economic Research, Inc.
    6. Clemens, Jeffrey & Hobbs, Duncan & Strain, Michael R., 2018. "A Database on the Passage and Enactment of Recent State Minimum Wage Increases," IZA Discussion Papers 11748, Institute of Labor Economics (IZA).
    7. Clemens, Jeffrey & Strain, Michael R., 2018. "Minimum Wage Analysis Using a Pre-Committed Research Design: Evidence through 2016," IZA Discussion Papers 11427, Institute of Labor Economics (IZA).
    8. Travis J. Berge & Òscar Jordà, 2011. "Evaluating the Classification of Economic Activity into Recessions and Expansions," American Economic Journal: Macroeconomics, American Economic Association, vol. 3(2), pages 246-277, April.
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    Cited by:

    1. Jonathan Meer & Hedieh Tajali, 2023. "Effects of the minimum wage on the nonprofit sector," Oxford Economic Papers, Oxford University Press, vol. 75(4), pages 1012-1032.
    2. Suresh Naidu, 2022. "Is There Any Future for a US Labor Movement?," Journal of Economic Perspectives, American Economic Association, vol. 36(4), pages 3-28, Fall.

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    More about this item

    JEL classification:

    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
    • J08 - Labor and Demographic Economics - - General - - - Labor Economics Policies
    • J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects

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