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What Effect do Unions Have on Wages Now and Would 'What Do Unions Do' Be Surprised?

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  • David G. Blanchflower
  • Alex Bryson

Abstract

We explore the various claims made by Freeman and Medoff (FM) in their famous book What do unions do? about the impact of unions on wages and update them with new and better data. The main findings are as follows. 1) Private sector union wage premium is lower today than it was in the 1970s. 2) The union wage premium is counter-cyclical. 3) There is evidence of a secular decline in the private sector union wage premium. 4) There remains big variation in the premium across workers. 5) There is big variation in industry-level union wage premia. 6) State level union wage premia vary less than occupation and industry level premia. 7) Union workers remain better able than non-union workers to resist employer efforts to reduce wages when market conditions are unfavorable. 8) There has been a decline in the unadjusted wage gap relative to the regression-adjusted wage gap. 9) Public sector wage effects are large and similar to those in the private sector.

Suggested Citation

  • David G. Blanchflower & Alex Bryson, 2003. "What Effect do Unions Have on Wages Now and Would 'What Do Unions Do' Be Surprised?," NBER Working Papers 9973, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:9973
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    Citations

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    Cited by:

    1. Ponzo, Michela & Scoppa, Vincenzo, 2008. "The Use of Informal Networks in Italian Labor Markets: Efficiency or Favoritisms?," MPRA Paper 11764, University Library of Munich, Germany.
    2. Ponzo, Michela & Scoppa, Vincenzo, 2010. "The use of informal networks in Italy: Efficiency or favoritism?," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 39(1), pages 89-99, January.
    3. Mathieu Bunel & Gilles Raveaud, 2011. "Union Membership does not pay," Working Papers halshs-00868217, HAL.
    4. Pierre Blavier & Jérôme Pélisse, 2022. "Négocier collectivement les salaires en entreprise : quels effets de la (non-)mobilisation des salarié·es ?," Post-Print hal-03887461, HAL.
    5. Munch, Jakob R. & Olney, William W., 2024. "Offshoring and the Decline of Unions," IZA Discussion Papers 17116, Institute of Labor Economics (IZA).
    6. Morikawa, Masayuki, 2010. "Labor unions and productivity: An empirical analysis using Japanese firm-level data," Labour Economics, Elsevier, vol. 17(6), pages 1030-1037, December.
    7. Stennek, Johan, 2015. "Why Unions Reduce Wage Inequality, II: The Relation between Solidarity and Unity," Working Papers in Economics 625, University of Gothenburg, Department of Economics.
    8. Blanchflower, David G. & Bryson, Alex, 2004. "The union wage premium in the US and the UK," LSE Research Online Documents on Economics 19987, London School of Economics and Political Science, LSE Library.
    9. Töngür, Ünal & Elveren, Adem Yavuz, 2014. "Deunionization and pay inequality in OECD Countries: A panel Granger causality approach," Economic Modelling, Elsevier, vol. 38(C), pages 417-425.
    10. MORIKAWA Masayuki, 2008. "What Do Japanese Unions Do for Productivity?: An Empirical Analysis Using Firm-Level Data," Discussion papers 08027, Research Institute of Economy, Trade and Industry (RIETI).
    11. Mathieu Bunel & Gilles Raveaud, 2012. "Union Membership does not pay: Evidence from recent French Micro Data," Economics Working Paper Archive (University of Rennes & University of Caen) 201232, Center for Research in Economics and Management (CREM), University of Rennes, University of Caen and CNRS.
    12. Stennek, Johan, 2012. "Why Unions Reduce Wage Inequality, I - A Theory of Domino Effects," Working Papers in Economics 539, University of Gothenburg, Department of Economics, revised Jun 2015.
    13. McGinnity, Frances & Russell, Helen & Privalko, Ivan & Enright, Shannen & O'Brien, Doireann, 2021. "Monitoring decent work in Ireland," Research Series, Economic and Social Research Institute (ESRI), number BKMNEXT414.
    14. Pierre Blavier & Jérôme Pélisse, 2022. "Négocier collectivement les salaires en entreprise : quels effets de la (non-)mobilisation des salarié·es ?," SciencePo Working papers Main hal-03887461, HAL.
    15. Guy Vernon & Mark Rogers, 2013. "Where Do Unions Add Value? Predominant Organizing Principle, Union Strength and Manufacturing Productivity Growth in the OECD," British Journal of Industrial Relations, London School of Economics, vol. 51(1), pages 1-27, March.
    16. Joel Waldfogel, 2016. "Faculty Preferences over Unionization: Evidence from Open Letters at Two Research Universities," NBER Working Papers 22149, National Bureau of Economic Research, Inc.

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    JEL classification:

    • J5 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining

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