Working Paper: NBER ID: w1748
Authors: Richard B. Freeman
Abstract: This paper argues that under current U.S. institutional arrangements, in which managements opposition to unions is as important as workers and unions,the magnitude of the union wage premium actually reduces organization rather than increasing it. It reduces organizing success by lowering profits, thus giving management a greater incentive to oppose unions. It shows that in the traditional monopoly model, any given premium can cause management to donate more resources to opposing a union than workers will donate to organizing. Empirical evidence from NLRB elections supports the model in which larger premiums induce greater opposition and thus reduce union organizing success.
Keywords: union wage differential; management opposition; union organizing success
JEL Codes: J51; J53
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Union wage differential (J31) | Management opposition (L29) |
| Management opposition (L29) | Union organizing success (J51) |
| Union wage differential (J31) | Union organizing success (J51) |
| Union wage differential (J31) | Perceived threat to profitability (L21) |
| Perceived threat to profitability (L21) | Management opposition (L29) |
| Management opposition (L29) | Unfair labor practices (J51) |
| Unfair labor practices (J51) | Workers organized (J51) |
| Workers organized (J51) | Union organizing success (J51) |