Wage differentials between union and nonunion sectors
This presentation is the property of its rightful owner.
Sponsored Links
1 / 53

Wage Differentials between Union and Nonunion Sectors PowerPoint PPT Presentation


  • 88 Views
  • Uploaded on
  • Presentation posted in: General

Wage Differentials between Union and Nonunion Sectors. Patterns, Current Population Survey, 2002 Union premium averages 21% Pattern by age (rising gap—seniority) Pattern by gender (gap bigger for women) Pattern by race (gap bigger for Blacks, Hispanics)

Download Presentation

Wage Differentials between Union and Nonunion Sectors

An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -

Presentation Transcript


Wage differentials between union and nonunion sectors

Wage Differentials between Union and Nonunion Sectors

Patterns, Current Population Survey, 2002

Union premium averages 21%

Pattern by age (rising gap—seniority)

Pattern by gender (gap bigger for women)

Pattern by race (gap bigger for Blacks, Hispanics)

Pattern by skill (gap biggest at low skill)


Wage differentials between union and nonunion sectors1

Wage Differentials between Union and Nonunion Sectors

Forms of Payment

Standard rate (straight time) Pay

Overtime Premia

Daily overtime included in 93% of agreements

6th or 7th day premia included in 26% of agreements

Holiday pay

Pyramiding (compensation for more than one overtime premium at once) prohibited in 69% of contracts

Most agreements specify how overtime is to be distributed among workers. Mandatory overtime negotiated.


Wage differentials between union and nonunion sectors2

Wage Differentials between Union and Nonunion Sectors

Forms of Payment

Piece Rate Pay: Pay for output

Only used where output is easy to measure and verify

Where rate can be agreed upon

Treats workers differently: unions may be uncomfortable

Example Safelite moves from straight time to piece rate

Average pay rises

Average output (windshields installed per worker per day) rises

Quantity vs Quality

Standard hour plans

Expected time for a project set. Paid for the job at presumed time. If worker produces at a faster pace, receive a bonus

Sears got in trouble for performing unnecessary procedures.

Quality vs Quantity again


Wage differentials between union and nonunion sectors3

Wage Differentials between Union and Nonunion Sectors

Forms of Payment

Multiple year plans: Raises prorated over time.

Value rises if front-loaded

Value falls if back loaded

Signing Bonuses (pay phased out)

COLA (cost-of-living adjustments)

Tie pay increases to the CPI, typical quarterly adjustments

48% of agreements in 1979

18% of agreements in 2002

Alternative: wage reopener to reassess only wages if economic circumstances dictate (7% in 2002)


Wage differentials between union and nonunion sectors4

Wage Differentials between Union and Nonunion Sectors

Forms of Payment

Profit sharing

10% of plans

ESOPs (Employee Stock Ownership Plans)

Unions are cautious about these, firms favor

Scanlon Plans, Gain Sharing

Union and management evaluate ideas designed to lower costs, raise productivity

Proceeds split (75% labor-25% firm typical)

Similar to 75/25 split between labor and other factors


Wage differentials between union and nonunion sectors5

Wage Differentials between Union and Nonunion Sectors

Forms of Payment

Two-tier wage systems: separate treatment of current, newly hired workers (27% of contracts in 2002)

Used most commonly in declining or threatened firms to preserve compensation for senior workers

Low-tier workers view firm low on equity

Low-tier workers view union unfavorably

Often phased out over time as senior workers retire, economic circumstances improve


Wage differentials between union and nonunion sectors6

Wage Differentials between Union and Nonunion Sectors

Forms of Payment

Roll-Up: Many benefits are tied to levels of base pay through percentages

Taxes (Social Security, Unemployment Insurance, Worker’s Compensation)

Pensions

Overtime Premia

Life Insurance

Paid Vacations, …


Wage differentials between union and nonunion sectors7

Wage Differentials between Union and Nonunion Sectors

Forms of Payment

Legal restrictions common across all firms may lower gap somewhat

FLSA (minimum wage, overtime)

ERISA (vesting, pension insurance)

COBRA Consolidated Omnibus Budget Reconciliation Act)

Portability of medical insurance

WARN


Compensating differentials between union and nonunion sectors

Compensating Differentials between Union and Nonunion Sectors

Other Forms of Compensation

Pensions (98% of contracts)

Defined Benefit Plan (73%)

Guarantees amount paid out, typically as a function of years of service as well as earnings

Defined Contribution Plan (27%)

Guarantees amount paid in

Cash Balance Plan (10%)

Similar to defined benefit plan except

Reporting includes interest earned as well as the set contribution. Minimum benefit is still guaranteed.

Benefit can be received in a lump sum

Benefit not tied to years of service


Compensating differentials between union and nonunion sectors1

Compensating Differentials between Union and Nonunion Sectors

Other Forms of Compensation

Health Insurance (99% of contracts)

Hospitalization (97%)

Prescription drugs (96%)

Physician visits (96%)

Mental health (93%)

Dental (90%)

Vision (73%)

Preferred Provider: Specified services for a guaranteed number of patients. Must select physician from group or pay extra. (74%)

Health Maintenance Organization: Access to specified services at specified institution(s) under direction of a named primary care physician. Specialist services from the group or not covered. (62%)

Fee for Service: Traditional (48%)


Compensating differentials between union and nonunion sectors2

Compensating Differentials between Union and Nonunion Sectors

Other Forms of Compensation

Paid Holidays (99%)

May specify rate for employees who work holidays

95% 7+ days, median is 11

Paid Vacations (92%)

2-6 weeks

Plans dictated by regularity of work, production process

Graduated: weeks rise with seniority. Most common. Big plants.

Uniform: set weeks for all. Manufacturing.

Ratio-to-work: Set by intensity of work in previous quarter, year. Transportation

Funded: Employer contributes to a pool. Employees draw from the pool during slack work. Construction


Wage differentials between union and nonunion sectors8

Wage Differentials between Union and Nonunion Sectors

Theory: Two –Sector Model

(Same model for differences in benefits or compensation)

Consider two sectors of an industry:

U: Union

N: Nonunion

What would the wage be in the two sectors if labor were freely mobile?


Wage differentials between union and nonunion sectors9

Wage Differentials between Union and Nonunion Sectors

Theory: Two –Sector Model

Consider two sectors of an industry:

U: Union

N: Nonunion

Suppose that workers are equally productive in both sectors

In the absence of restrictions on mobility, wages would be equal across the two sectors


Wage differentials between union and nonunion sectors10

Wage Differentials between Union and Nonunion Sectors

Nonunion

Union

Wage

Wage

WU

WN

Theory: Two –Sector Model: What happens to labor in the Union Sector? The Nonunion Sector?

Demand

Demand

NU’

NU

NN

Employment

Employment


Wage differentials between union and nonunion sectors11

Wage Differentials between Union and Nonunion Sectors

Theory: Two –Sector Model

Spillover Effect: Displaced labor in the union sector spills over to the nonunion sector


Wage differentials between union and nonunion sectors12

Wage Differentials between Union and Nonunion Sectors

Nonunion

Union

Wage

Wage

WU

WN

Theory: Two –Sector Model

Spillover Effect

Demand

Demand

NU’

NU

NN

Employment

Employment


Wage differentials between union and nonunion sectors13

Wage Differentials between Union and Nonunion Sectors

Theory: Two –Sector Model

Threat Effect: Firms in the nonunion sector raise wages to induce their own workers to resist incentives to unionize


Wage differentials between union and nonunion sectors14

Wage Differentials between Union and Nonunion Sectors

Nonunion

Union

Wage

Wage

WU

WN

Theory: Two –Sector Model

Threat Effect

Demand

Demand

NU’

NU

NN

Employment

Employment


Wage differentials between union and nonunion sectors15

Wage Differentials between Union and Nonunion Sectors

Theory: Two –Sector Model

Wait Unemployment Effect: Displaced labor in the union sector stays in the Union Sector to wait for jobs to open

Alternative: Share job loss across NU, each works NU / NU’


Wage differentials between union and nonunion sectors16

Wage Differentials between Union and Nonunion Sectors

Nonunion

Union

Wage

Wage

WU

?

WN

Theory: Two –Sector Model

Wait Unemployment

Demand

Demand

NU’

NU

NN

Employment

Employment

?


Empirical tests of wage differentials between union and nonunion sectors

Empirical Tests of Wage Differentials between Union and Nonunion Sectors

Wage = Price * Marginal Product

= Short-run demand curve

Marginal Product = f(Skill, firm attributes)

= f(Xi)


Empirical tests of wage differentials between union and nonunion sectors1

Empirical Tests of Wage Differentials between Union and Nonunion Sectors

Percent differential in the wage approximated by

WU – WN = Observed difference

At least some of the wage differential will reflect differences in productivity between the U and N sectors (sorting)

Suppose that union wages are well explained by the equation

WU = a0 + a1* XU

WN = b0 + b1* XN

Predicted Wage for a nonunion worker if s/he were in a union is

WN = a0 + a1* XN


Empirical tests of wage differentials between union and nonunion sectors2

Empirical Tests of Wage Differentials between Union and Nonunion Sectors

Percent differential in the wage approximated by

WU – WN = Observed difference

WU - WN = Explained difference

WN - WN = Unexplained difference


Wage differentials between union and nonunion sectors17

Wage Differentials between Union and Nonunion Sectors

Nonunion

Union

Wage

Wage

WU

WU

Theory: Two –Sector Model:Explained and Unexplained Differences in Wages

WN

WN

Demand

Demand

NU’

NU

NN

Employment

Employment


Wage differentials between union and nonunion sectors

Card, David. “The Effect of Unions on Wage Inequality in the U.S. Labor Market.” Industrial and Labor Relations Review 54 (January 2001): 296-315.

Card: Table 2:

  • Unadjusted union wage gap rising for men and women

  • Adjusted union wage gap stable (men) or falling (women)

  • Adjusted (explained) gap smaller than Unadjusted (unexplained) gap =>some of union wage effect is sorting on productivity

  • Wage inequality lower for men and women in the union sector (both overall and residual)

  • Wage inequality rising in both the union and nonunion sectors


Wage differentials between union and nonunion sectors

Bratsberg, Bernt and James F. Ragan Jr. “Changes in the Union Wage Premium by Industry.” Industrial and Labor Relations Review 56 (October 2002): 65-83.

  • Bratsberg and Ragan: What is the magnitude of the union wage gap, controlling for differences in productive attributes:

  • WN - WN = Unexplained difference

    = Adjusted Union Effect

    Estimates reported in Appendix and Time Path shown in Figure 1


Wage differentials between union and nonunion sectors

Bratsberg, Bernt and James F. Ragan Jr. “Changes in the Union Wage Premium by Industry.” Industrial and Labor Relations Review 56 (October 2002): 65-83.

  • Bratsberg and Ragan:

    Appendix: Union Wage Premium by Industry, adjusted for differences in education, experience, gender, minority status, marital status, SMSA, area of country, part-time status, occupational status.

    Overall, premium varies from 13% to 22%

    (Consistent with Card)

    Estimated adjusted premia vary from 2% (textiles, instruments) to 31% (construction), all positive


Wage differentials between union and nonunion sectors

Bratsberg, Bernt and James F. Ragan Jr. “Changes in the Union Wage Premium by Industry.” Industrial and Labor Relations Review 56 (October 2002): 65-83.

Appendix: Union Wage Premium by Industry, adjusted for differences in factors.

Some downward trend in premium, not dramatic (consistent with Card)

Trend effect by industry:

16 falling, 9 significant

16 rising, 9 significant

Is there are pattern to which industries are falling wage premia?

Figure 1

Falling: Construction, Mining, Wholesale, Retail, Finance

Start with high premium

Rising:Communications, Durable Goods

Start at low premium

Reversion to the mean?

Figure 2: Variance of union premia across industries


Wage differentials between union and nonunion sectors

Bratsberg, Bernt and James F. Ragan Jr. “Changes in the Union Wage Premium by Industry.” Industrial and Labor Relations Review 56 (October 2002): 65-83.

  • What Factors affect union wage premia over time, across industries?

    • Business cycles: Union contracts insulate wages from short-term fluctuations

      • Unemployment rate: should raise premium

      • Inflation: should lower premium

      • COLA: adds cyclical sensitivity back in

    • Deregulation: adds competitors that should lower bargaining power (Laws of Derived Demand)

    • Import penetration: Union insulates wages at least temporarily

    • Tests reported in Table 2


Wage differentials between union and nonunion sectors

Bratsberg, Bernt and James F. Ragan Jr. “Changes in the Union Wage Premium by Industry.” Industrial and Labor Relations Review 56 (October 2002): 65-83.

  • Conclusions:

    • Union wage premia in all industries

    • Premia becoming more similar across industries over time

    • Union wages less responsive to business cycles unless tied to inflation through COLAs

    • Decentralization has mixed effects on wage premia (generally lowers wages for both union and nonunion however)

    • Union wages more insulated from import competition


Wage differentials between union and nonunion sectors

Belman, Dale L. and Kristen A. Monaco. “The Effects of Deregulation, De-Unionization, Technology and Human Capital on the Work and Work Lives of Truck Drivers.” Industrial and Labor Relations Review 54 (January 2001): 502-524.

Deregulation has mixed effects on the union wage premium because it lowers wages for both union and nonunion workers.

Similarly, import competition may lower wage for both union and nonunion workers, but it lowers wages more for nonunion workers

Belman and Monaco document how deregulation has affected union and nonunion wages in trucking


Wage differentials between union and nonunion sectors

Belman, Dale L. and Kristen A. Monaco. “The Effects of Deregulation, De-Unionization, Technology and Human Capital on the Work and Work Lives of Truck Drivers.” Industrial and Labor Relations Review 54 (January 2001): 502-524.

Between 1935 and 1979

  • Entry in trucking routes restricted

  • Rates set bureaucratically

  • Back-hauls banned

  • Some types of freight banned

  • Created monopoly rents, some of which went to union workers

    These restrictions eliminated with deregulation

    Deregulation of trucking began in 1979.

    • Real wages fell by 21% between 1973-1995

    • Unionization density in firms whose main business was trucking fell from 55% to 25%


  • Wage differentials between union and nonunion sectors

    Belman, Dale L. and Kristen A. Monaco. “The Effects of Deregulation, De-Unionization, Technology and Human Capital on the Work and Work Lives of Truck Drivers.” Industrial and Labor Relations Review 54 (January 2001): 502-524.

    Table 2: Data on individual trucker earnings between 1973-1991

    Union members earn 28% more, adjusted for skill

    Holding individual productivity measures fixed, impact of deregulation estimated

    Impact on

    For-hirePrivate carriage

    Nonunion-0.163-0.125

    Union-0.079-0.087

    Impacts based on sum of coefficients from table 2

    =>Deregulation lowered wages for all, but lowered wages less for union members


    Wage differentials between union and nonunion sectors

    Belman, Dale L. and Kristen A. Monaco. “The Effects of Deregulation, De-Unionization, Technology and Human Capital on the Work and Work Lives of Truck Drivers.” Industrial and Labor Relations Review 54 (January 2001): 502-524.

    Another change in this market:

    • Communications and location technologies

    • Routing technologies

    • Computer technologies

      Technologies should raise worker productivity—

      • adjust routes to changes in weather, traffic, road construction

      • More efficient back hauls

      • More efficient partial loads

      • Communication without stopping

        Table 3 shows the use of various technologies by drivers in 1997


    Wage differentials between union and nonunion sectors

    Belman, Dale L. and Kristen A. Monaco. “The Effects of Deregulation, De-Unionization, Technology and Human Capital on the Work and Work Lives of Truck Drivers.” Industrial and Labor Relations Review 54 (January 2001): 502-524.

    Belman and Monaco document how these technologies have affected wages

    • Earnings

      • Satellites raise earnings

      • Dispatchers (old technology) lower earnings

    • Mileage rates (earnings per mile)

      • Old technologies tend to lower rates per mile; because

    • Miles

      • Satellite technologies raise miles (reduce wasted time off road; raise hours without raising penalties)


    Wage differentials between union and nonunion sectors

    Card, David. “The Effect of Unions on Wage Inequality in the U.S. Labor Market.” Industrial and Labor Relations Review 54 (January 2001): 296-315.

    Wage inequality lower for men and women in the union sector (both overall and residual)

    But…Wage inequality rising in both the union and nonunion sectors

    • Have changes in union density led to rising wage inequality?

      • Male union density fell from 31% to 19% from 1973 and 1993

      • Female union density fell from 14% to 13%


    Wage differentials between union and nonunion sectors

    Card, David. “The Effect of Unions on Wage Inequality in the U.S. Labor Market.” Industrial and Labor Relations Review 54 (January 2001): 296-315.

    Figures 1 and 2: Changes in union density by gender, skill, and public versus private sector employment

    • Public sector

      • Male and female density rising

      • Biggest increases at upper tail of skill distribution

    • Private sector

      • Male and female density falling

      • Biggest decreases at middle or lower end of skill distribution

    • Potential impact of density changes on inequality different for public, private sectors


    Wage differentials between union and nonunion sectors

    Card, David. “The Effect of Unions on Wage Inequality in the U.S. Labor Market.” Industrial and Labor Relations Review 54 (January 2001): 296-315.

    Figures 3 and 4: Changes in pattern of union premia by gender, skill, and public versus private sector employment

    • Wage premia largest for the least skilled for both men and women

    • Decline in wage premia faster for men as skill increases, (negative for men at highest skills)

    • Pattern identical

      • between public and private sectors

      • Between 1973 and 1993


    Wage differentials between union and nonunion sectors

    Card, David. “The Effect of Unions on Wage Inequality in the U.S. Labor Market.” Industrial and Labor Relations Review 54 (January 2001): 296-315.

    Table 8: Estimate of impact of union density changes on wage inequality by gender, public vs private sectors

    • Public sector union density rises for men and women

      • Lowers inequality by 1 percentage point for women and men

    • Private sector union density falls for men and women

      • No impact on inequality among women

      • 1 percentage point increase in inequality among men

  • Decline in union density has had only a small effect on earnings inequality in the united States


  • Wage differentials between union and nonunion sectors

    Buchmueller, Thomas C. John Dinardo and Robert G. Valletta. “Union Effects on Health Insurance Provision and Coverage in the United States.” Industrial and Labor Relations Review 55 (July 2002): 610-627.

    Percent covered by employer-provided Health Insurance fell from 71% in 1983 to 64.5% in 1997

    Unions raise probability of getting benefits

    How much of the decrease in benefits is due to decline in union density?


    Wage differentials between union and nonunion sectors

    Buchmueller, Thomas C. John Dinardo and Robert G. Valletta. “Union Effects on Health Insurance Provision and Coverage in the United States.” Industrial and Labor Relations Review 55 (July 2002): 610-627.

    Do differences in union and nonunion health insurance benefits reflect differences in firm, worker attributes or are they a consequence of union bargaining power?

    Explained vs unexplained differences in health insurance


    Wage differentials between union and nonunion sectors

    Buchmueller, Thomas C. John Dinardo and Robert G. Valletta. “Union Effects on Health Insurance Provision and Coverage in the United States.” Industrial and Labor Relations Review 55 (July 2002): 610-627.

    Table 3: Changes in union effect on health insurance (percent of workers)

    ObservedAdjusted

    199721.517.5

    198327.421.1

    => Some of union benefits premium is sorting on productivity

    => Union effect on benefits falling somewhat

    Union also raises probability of eligibility (shorter wait to get benefit, gap falling); union raises probability of take-up (higher quality benefits, gap rising)


    Wage differentials between union and nonunion sectors

    Buchmueller, Thomas C. John Dinardo and Robert G. Valletta. “Union Effects on Health Insurance Provision and Coverage in the United States.” Industrial and Labor Relations Review 55 (July 2002): 610-627.

    Differences in establishment size

    Table 5: Union impact on health insurance benefits is biggest in small firms (impact in % of establishments)

    • Virtually all large firms offer benefits

    • If union density had remained constant (especially in small firms) percentage covered by employer-provided health insurance would be 1.6 percentage point higher (25% of decline in employer provided benefits)

    • Adjusted gap is 2.9%


    Wage differentials between union and nonunion sectors

    Buchmueller, Thomas C. John Dinardo and Robert G. Valletta. “Union Effects on Health Insurance Provision and Coverage in the United States.” Industrial and Labor Relations Review 55 (July 2002): 610-627.

    Union Impact on benefit quality

    Table 6: Union impact on firm share of health insurance premium payment

    Single coverage: Adjusted difference is 9%

    Family coverage: Adjusted differences is 10%


    Wage differentials between union and nonunion sectors

    Buchmueller, Thomas C. John Dinardo and Robert G. Valletta. “Union Effects on Health Insurance Provision and Coverage in the United States.” Industrial and Labor Relations Review 55 (July 2002): 610-627.

    Union Impact on health insurance benefits for retirees

    Table 8:Proportion of establishments providing health insurance benefits that also provide benefits to retirees, by union status and establishment size

    Union gap rising due mainly to decrease in nonunion sector (4.5% in 1988, 14.5% in 1993) (Table 6: CPS data, adjusted, % of employees)

    Gap exists at all firm sizes, biggest at small firms

    Loss of union density may affect future retiree health benefits


    Wage differentials between union and nonunion sectors

    Allen, Steven G and Robert L. Clark. “Unions, Pension Wealth, and Age-Compensation Profiles.” Industrial and Labor Relations Review 39 (July 1986): 502-517.

    Union Impact on pension benefits

    Table 1:Other things equal

    Unions raise benefits at retirement by 6%, holding prior earnings fixed

    Unions lower age at retirement by about 1 year


    Wage differentials between union and nonunion sectors

    Allen, Steven G and Robert L. Clark. “Unions, Pension Wealth, and Age-Compensation Profiles.” Industrial and Labor Relations Review 39 (July 1986): 502-517.

    Union Impact on pension benefit increase after retirement

    Table 3:

    Union pensions grow at a faster rate than nonunion pensions

    Union effect on pension rises as years of retirement increases (17% for older retirees vs. 5% for youngest retirees)


    Wage differentials between union and nonunion sectors

    McHugh, Cutcher-Gershenfeld and Polzin. “Employee Stock Ownership Plans: Whose interests do they Serve?” IRRA 49th Annual Proceedings. (1997):23-32.

    ESOP: Employee Stock Ownership Plans

    Unions are skeptical

    • Potential for firm abuse

    • Potential union replacement by creating community of interest with management

      Unions have set guidelines for ESOPs: Table 1


    Wage differentials between union and nonunion sectors

    McHugh, Cutcher-Gershenfeld and Polzin. “Employee Stock Ownership Plans: Whose interests do they Serve?” IRRA 49th Annual Proceedings. (1997):23-32.

    ESOP: Employee Stock Ownership Plans

    Table 4: How do ESOPs differ in unionized firms?

    Greater labor influence in decisions

    • Share of stock owned by ESOP is bigger

    • More employee participation on Board, design of ESOP

    • Allocation of stock more likely based on hours (equal treatment)


    Wage differentials between union and nonunion sectors

    Freeman, Richard and Morris Kleiner. “Do Unions Make Enterprises Insolvent?”Industrial and Labor Relations Review 52 (July 1999): 510-527.

    If Unions raise wages, benefits, do they make firms insolvent?

    Samuel Gompers “The worst crime against working people is a company which fails to operate at a profit”


    Wage differentials between union and nonunion sectors

    Freeman, Richard and Morris Kleiner. “Do Unions Make Enterprises Insolvent?”Industrial and Labor Relations Review 52 (July 1999): 510-527.

    If Unions raise wages, benefits, do they make firms insolvent?

    Context

    • Unions raise wages, benefits

    • Unions raise productivity on average

    • Gain in wages outweighs gain in productivity

      • Virtually all studies find that unions lower rate of return on assets

      • Lower growth rate of firm

      • Lower stock price

    • Possible that what unions do is extract rents (excess profits) from firms, do not lower profit below market rate of return, do not threaten firm survival

      • Unions concentrate on larger firms

      • Firms in concentrated industries


    Wage differentials between union and nonunion sectors

    Freeman, Richard and Morris Kleiner. “Do Unions Make Enterprises Insolvent?”Industrial and Labor Relations Review 52 (July 1999): 510-527.

    If Unions raise wages, benefits, do they make firms insolvent?

    Subset of Compustat data (319 firms) with union information added, 1983-1990

    Union measures:

    • Dummy variable if any workers covered by union contract

    • Percent of workers covered by union contract

      Table 3: Union impact on profitability

    • Union presence associated with 3-9 percentage point lower net income on assets (latter is a bit high vs other estimates)

    • Adverse effect is larger when union density is lower!!


    Wage differentials between union and nonunion sectors

    Freeman, Richard and Morris Kleiner. “Do Unions Make Enterprises Insolvent?”Industrial and Labor Relations Review 52 (July 1999): 510-527.

    If Unions raise wages, benefits, do they make firms insolvent?

    Table 2: NO!!!

    Probability of insolvency lower for unionized firms

    Selection effect? Unions target only profitable firms


  • Login