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How Successful Have Trade Unions Been?: A Utility-Based Indicator of Union Well-Being

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  • John Pencavel

    (Stanford University)

Abstract

Can conventional economic analysis help in defining and measuring the success of labor unions? In this paper, a general indicator of union welfare is proposed and particular expressions for the wage and employment objectives of unions are rearranged to derive measures of union success or welfare. These indicators combine two measures: union density and the relative union-nonunion wage gap. The indicators are applied to describe the movement of union welfare in the United States over the past eighty years, the differences in union success among groups of U.S. workers, and the variation in union well-being across countries. The results suggest that U.S. unions’ success peaked in the 1950s and 1960s; they have tended to benefit Black workers especially Black men, more than other groups; and, in recent decades, a very low unionization rate has contributed to make them less successful, overall, than unions in other countries with similar labor markets.

Suggested Citation

  • John Pencavel, 2008. "How Successful Have Trade Unions Been?: A Utility-Based Indicator of Union Well-Being," Discussion Papers 08-002, Stanford Institute for Economic Policy Research.
    • Handle: RePEc:sip:dpaper:08-002
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    References listed on IDEAS

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    Cited by:

    1. Hirsch, Boris & Schnabel, Claus, 2011. "Let's Take Bargaining Models Seriously: The Decline in Union Power in Germany, 1992-2009," IZA Discussion Papers 5875, Institute of Labor Economics (IZA).
    2. Janelle Jones & John Schmitt, 2014. "Union Advantage for Black Workers," CEPR Reports and Issue Briefs 2014-04, Center for Economic and Policy Research (CEPR).
    3. Boris Hirsch & Claus Schnabel, 2014. "What can we Learn from Bargaining Models about Union Power? The Decline in Union Power in Germany, 1992–2009," Manchester School, University of Manchester, vol. 82(3), pages 347-362, June.

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    More about this item

    Keywords

    Labor Unions; Wage Gap; Union Density;
    All these keywords.

    JEL classification:

    • J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects

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