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Union Organization. Picking a target Union return on investment depends on cost of organizing Expected cost of servicing workers Expected probability of win Expected bargaining strength in the sector. Union Organization. Picking a target

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Union organization l.jpg

Union Organization

Picking a target

Union return on investment depends on cost of organizing

Expected cost of servicing workers

Expected probability of win

Expected bargaining strength in the sector


Union organization2 l.jpg

Union Organization

Picking a target

Union return on investment depends on cost of organizing

Expected cost of servicing workers

Heterogeneity of workers, interests

Worker turnover

Part-time vs. full-time vs. transitory workers

Worker ability to pay dues

Size of unit (returns to scale)

Monopoly or oligopoly


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Union Organization

Picking a target

3. Expected probability of win

Wages and benefits in the firm relative to local reference, industry norms

Worker sense of inequity or injustice

Campaigns based on workplace dignity: 56% win

Traditional wages, hours, job security: 27% win

Probability of firm resistance

Phone sampling, research


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Union Organization

Picking a target

4. Expected bargaining strength in the sector

Depends on the elasticity of labor demand

Laws of derived demand

Depends on the growth of labor demand

Growing firm profits

Growing firm revenues

Growing employment

Growing labor productivity

Can also help with sense of fairness


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Union Organization

W

W1

W0

Labor demand: N: number of workers; W: Wage

Demand

N

N1

N0

Wage Bill = W*N; Change in wage bill = W1N1 – W0N0


Union organization6 l.jpg

Union Organization

W

Relatively Inelastic Demand

W1

W0

Labor demand: N: number of workers; W: Wage

Relatively Elastic Demand

N

N1

N2

N0

Change in wage bill = W1N2 – W0N0 is smaller than with elastic demand


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Union Organization

ED = Elasticity of demand =

% change in employment

% change in wage

0 < ED < 1: inelastic demand

ED = 1: unitary elastic demand

ED > 1: elastic demand

Wage increase with inelastic demand will raise the wage bill

Wage increase with elastic demand will lower the wage bill


Union organization8 l.jpg

Union Organization

ED = Elasticity of demand = 0.3 < 1, inelastic

% change in employment = 3%

% change in wage = 10%

W1 = W0 (1.10)

N1 = N0 (0.97)

Change in wage bill = W1N1 – W0N0

= W0 (1.10)* N0 (0.97) - W0N0

= 0.067*W0N0

So wage bill rises when wage rises when the elasticity of demand is below 1.


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Union Organization

Laws of derived demand

Union labor demand is less elastic when …

Product demand is less elastic

Few substitutes for the product

Monopoly/oligopoly

Weak import penetration

Examples?

There are few substitutes for union labor

No ready supply of replacement workers

High union density in the industry

Nonunion options paid comparable wages (Davis-Bacon)


Union organization10 l.jpg

Union Organization

Laws of derived demand

Union labor demand is less elastic when …

“Importance of being unimportant”—labor costs are a small fraction of total costs

Heavily capitalized sectors

Crafts vs. industrial unions

Only holds when elasticity of demand for product is bigger than the elasticity of substitution (holds most of the time)


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Steps for union recognition by NLRB election

  • Initial contact

    • Workers contact union

    • Union targets workers

  • Union typically assigns an organizer

    • Determines campaign focus

    • Solicits assistance and trains employees sympathetic to the union

      • Nonemployees do not have access to the premises as long as there is an alternative way to contact workers

      • Employees are known by fellow workers

      • If the union is successful, it will need an infrastructure of employees to serve as stewards, local leaders


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Steps for union recognition by NLRB election

  • Solicitation

    • Work time vs personal time at work vs nonwork time

    • NLRB reserves work time for work—limits interference in firm business practice

    • Personal time at work (lunch, breaks) are open for oral solicitation by employees

    • Pro union posters, bulletins, clothing, buttons ok if they do not disrupt business

    • Off-premises solicitation is ok


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Steps for union recognition by NLRB election

  • Authorization cards

    Minimum of 30% needed to authorize election

    (unions will not press for election unless they have majority. AFL-CIO recommends 75%)

    5. Representation Petition

    Union submits RC petition. NLRB verifies minimum 30% interest.

    • Cross-petition from other unions requires additional 10% interest


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Steps for union recognition by NLRB election

Strict Rules Governing Firm Behavior During Union Campaign


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Steps for union recognition by NLRB election

  • Secret Ballot election

    Within 30 days of verification of need for election

    50% required to win

    Run-off among top two options if no majority

    Voters include everyone in bargaining unit

    Employed at least 30 days in the year prior

    Avoidance of fraudulent employees

    Economic strikers within 12 months of strike

    Replacement workers

    Part-time workers with continuing interest

    SAG: anyone who worked at least two days in last 12 months


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Steps for union recognition by NLRB election

  • Rules on election day

    • No mass meetings 24 hours before election

    • Firm cannot offer benefits or reprisals

      No special pay from firm to compensate for voting expenses

      Special pay from union for voting expenses is ok, other compensation is illegal


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Steps for union recognition by NLRB election

  • Certification of Election

    If NLRB certifies union win, union is immediately certified. Has one year to get a contract

    Contract bar—no other elections allowed for one year, regardless of who wins

    If firm is guilty of ULP, NLRB may call for another vote; or

    Gissel doctrine NLRB may certify union if firm behavior is considered so bad as to make a fair election impossible and there is evidence that union has a majority; or

    J.P. Stevens ordered to bargain, even though union did not demonstrate majority through authorization cards


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Voluntary Recognition

  • If firm volunteers to recognize union, NLRB will certify union.

    • Recognition picketing (limit of 30 days, after which firm can ask for expedited election)

    • Economic pressure (boycotts, political pressure)

    • Prior agreements between firm and worker to accept recognition cards in lieu of NLRB election

    • Absent election, union at risk of decertification election,


Eaton and kriesky on neutrality and card check agreements ilrr october 2001 l.jpg
Eaton and Kriesky on Neutrality and Card Check Agreements ILRR (October 2001)

  • Unions may wish to forge agreements that lower the cost of organizing or the standard for success

    • Agreements with firms that have multiple sites

      • Centralized agreements

      • Generalized agreement based on a few local relationships

      • Agreement with entirely new firms

  • Agreements with Associations of Employers

  • Most common: Steel, autos, communications, hospitality, gaming

  • (66%) restrict agreement to specific occupations, job classifications, or facilities


Types of agreements l.jpg

Types of agreements ILRR (October 2001)

Neutrality Agreements:

“Neither helping nor hindering” union organization efforts, facts allowed (UAW, CWA)

“Employer will not communicate opposition; employer will not attack or demean the union or its representatives (HERE)

Firm will not provide support to anti-union groups (USWA)

Weaker statements: strive for climate free of hostility; only positive, pro-company statements will be issued


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Types of agreements ILRR (October 2001)

Card Check Agreements:

(73%) Third party neutral will validate membership cards signed by union members. Firm will recognize union if a minimum level is reached (say 65%)

Similar to above, but if percentage of cards is above 50% but below threshold, a nonNLRB election is held. If percentage is between 30% and 50%, NLRB election held.


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Types of agreements ILRR (October 2001)

Access:

(66%) Union will be allowed on the firm premises.

(36%) Union given lists of employees in the bargaining unit

First contract

Accretion of new sites into existing bargaining units (50% of multi-site agreements)

Arbitration if first contract not reached (USWA)

Negotiations begin immediately upon recognition


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Data ILRR (October 2001)

  • 57 International unions with 10,000+ members

  • 36 respond

  • 23 had at least one agreement

  • 132 agreements total (113 at least partially useable)

  • Data analyzed only relate to these 113 contracts


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Union Success ILRR (October 2001)

  • Recognition

    • NLRB elections: 46% 1983-1998

    • Neutrality only: 46%

    • Card Check: 74% (understated viz. NLRB)

      • Card check, U.S. public sector: 85%

      • Card check, Quebec: 83%

      • Card check, Ontario: 78%

  • First contract

    • NLRB elections: 66-80%

    • Neutrality only: 100%

    • Card check: 96%

  • Does this mean that universal mandatory application of card check or neutrality will raise union density?


Thieblot the fall and future of unionism in construction journal of labor research spring 2001 l.jpg
Thieblot. “The Fall and Future of Unionism in Construction.” Journal of Labor Research Spring 2001.

  • 1959 Landrum Griffin Act allows closed shops in building trades (pre-hire agreements)

  • Davis Bacon Act (1931); Little Davis Bacon Acts 2/3 of states); Project Labor Agreements (eg Des Moines Iowa Events Center)

  • Construction has lost density more than most industries


Why has union density fallen in construction l.jpg
Why has Union Density fallen in Construction? Construction.”

  • Demographics: women, educated?

    • Insignificant in construction trades

  • 10 states repealed little Davis Bacon Acts since 1979

    • Most of the decline predates this

    • Decline occurs does not slow after Landrum Griffin

  • Union/Nonunion Cost Structure


Union nonunion cost differential l.jpg
Union / Nonunion Cost Differential Construction.”

  • Pay differential 50% plus

  • Pay differential largest for the least skilled

  • How can unionized firm compete?


Union nonunion cost differential28 l.jpg
Union / Nonunion Cost Differential Construction.”

  • Unit Labor Cost = W*N = W = W

    Q (Q/N) (APN)

    W = wage

    N = number of workers

    Q = output or revenue

    If W is 50% higher in union sector, APN must be at least 50% higher for union firm to be competitive


Union nonunion cost differential29 l.jpg
Union / Nonunion Cost Differential Construction.”

Evidence on relative productivity

Cost per Sq foot = a0 + a1*INPUTS + a2*(UNION)

a2 > 0 implies union effect on wages dominates union effect on productivity

a2 < 0 implies union effect on productivity dominates union effect on wage

Evidence suggests a2 > 0; responsible for at least part of the decline


Union nonunion cost differential30 l.jpg
Union / Nonunion Cost Differential Construction.”

Other sources of higher union cost

Work rules

Price of helpers

Staffing: journeymen vs less skilled

Trade staffing restrictions

Slow adjustment to new technologies, trades

Consequence: union market share has fallen from 75% in 1950 to 25% today


Union nonunion cost differential31 l.jpg
Union / Nonunion Cost Differential Construction.”

  • Competitive option when unit costs are higher in union sector

    • Raise costs in nonunion sector

    • Role of prevailing wage laws

    • Government projects are 20% of the market, largely union

    • Private sector projects are about 80% of the market, largely nonunion


Other strategies for unionized firms unions l.jpg
Other Strategies for unionized firms, unions Construction.”

  • Unions

    • Job targeting: Try to lower W in union sector

      • “list price vs street price”

      • Union pools money on high priced, prevailing wage jobs to subsidize wages on competitive bids

    • Salting: try to lower APN or raise W in nonunion sector

      • More later

  • Unionized firms

    • Double breasting: union and nonunion crews


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Fine. “Union Salting: Reactions and Rulings since Construction.” Town and CountryJournal of Labor Research Summer 2002.

  • Salting: union members or organizers accept employment at a nonunion firm with the intent of filing unfair labor practice charges and organizing the work place

    • Aim is to pressure firm to recognize the union without a certification election; or

    • To disrupt nonunion firm production activities and lower its cost advantage over union firms


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Fine. “Union Salting: Reactions and Rulings since Construction.” Town and CountryJournal of Labor Research Summer 2002.

  • NLRB v. Town and Country Electric (1995)

    • IBEW locals 292 and 343 asked their unemployed members to apply for jobs at Town and Country Electric

    • Those employed trained on how to organize the site

    • How to monitor employer actions for possible ULP charges

    • IBEW paid the salts the difference between nonunion and union scale.

  • IBEW alleged one salt wrongfully discharged; 10 others wrongfully refused employment

  • NLRB upholds charge; consistently has held that salts are entitled to the same rights as other employees


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Fine. “Union Salting: Reactions and Rulings since Construction.” Town and CountryJournal of Labor Research Summer 2002.

  • ULP charges rise 36% in nonunion firms after salting

    • NLRB Cases involving salts

      • 1995: 4

      • 1996: 9 (of 262 salt cases filed in 1996)

      • 1997: 10

      • 1998: 8

      • 1999: 8

      • 2000: 16


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Fine. “Union Salting: Reactions and Rulings since Construction.” Town and CountryJournal of Labor Research Summer 2002.

  • Salt “charges” upheld by NLRB

    • 18 “refusal to consider”

    • 22 “refusal to hire”

    • 19 “unlawful interrogation”

    • 19 “unlawful discharge”

  • Penalties include back pay, reinstatements


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Fine. “Union Salting: Reactions and Rulings since Construction.” Town and CountryJournal of Labor Research Summer 2002.

  • Employer responses

    • Salting insurance paid by the Associated Builders and Contractors

    • Architectural Glass and Metal Co. Inc. (1997) can dismiss salts if there is an anti-moonlighting clause in contract

    • Industrial Company Southeast, Inc. (1997) Can require applications on original forms (union had submitted applications on xeroxed application forms.


Decertification l.jpg
Decertification Construction.”

  • RD petition must be filed by employees

    • At least 30% of employees must sign a decertification petition

    • Employer cannot encourage this process, must remain neutral

    • Filed within 60-90 days of expiration of a contract; or

    • if there has been no contract filed within 1 year of certification; or

    • After a contract has expired


Decertification39 l.jpg
Decertification Construction.”

  • RM petition can be filed by the employer

    • Timing similar to RD

    • Evidence supporting RM petition can include:

      • Unsolicited communications from employees requesting decertification;

      • Failure of union to represent workers, fulfill responsibilities;

      • Changes in the size of the workforce


Decertification40 l.jpg
Decertification Construction.”

  • Unions lose 75% of decertification elections

  • Unions win 45-50% of certification elections

  • RD petitions are gaining over time, RC and RM petitions have decreased in relative importance.

  • Combined RD + RM mean that decertification elections are rising in importance

    Scott, Hester and Arnold. “Employer-Initiated Elections, 1968-1992.” Journal of Labor Research Spring 1997.


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