The Economic Effects of Labor Unions Revisited

Journal of Labor Research (Impact Factor: 0.2). 02/2002; 23(1):105-130. DOI: 10.1007/s12122-002-1021-7
Source: RePEc


Using a variety of statistical techniques, we conclude that labor unions have reduced U.S. output by significant amounts -- trillions of dollars over time. Additionally, the employment-population ratio and the unemployment rate have been adversely affected by the presence of unions. From the very beginning, unionization materially lowered employment in the auto and steel industries, and union militancy in coal mining has contributed importantly to largely eliminating employment in this once large industry. While some individual workers have profited from unions, the aggregate economic impact is strongly negative.

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    • "They do this by using their monopoly position to drive up wages and to introduce restrictive work practices that inhibit management's ability to introduce productive work practices such as HPWP. This is supported by research evidence on the negative impact that unions have on productivity and return to capital markets at the organization level and unemployment and output at the national level (Denny, 1997; Miller & Mulvey,1993; Pantuosco, Parker, & Stone, 2001; Vedder & Gallaway, 2002 cited in Guest, 1989). There is also a substantial body of research finding that unions can have a positive impact on the competitiveness. "
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    ABSTRACT: This paper examines the literature and research on unions relevant to the effective adoption of High Performance Work Practices. It demonstrates that unions that have a cooperative relationship with management can play an important role in overcoming barriers to the effective adoption of practices that have been linked to organizational competitiveness through the development and application of human capital. In particular, unions have the unique advantage of delivering independent voice that cannot be substituted by management. Not only can unions make a contribution to organization competitiveness but they can also ensure that employees benefit from High Performance Work Practice adoption and in doing so secure their own relevance. The contribution that unions can make is inhibited by management and union's reluctance to engage in an integrative relationship and an institutional context that does not value unions. Organizations that want to capture the value that unions can add must move away from a pluralist model of autocratic management, hostile unions and adversarial industrial relations, beyond a unitarist model that sees no role for unions, to a cooperative partnership with unions that shares the gains of implementing High Performance Work Practices.
    Human Resource Management Review 03/2009; 19(1-19):39-50. DOI:10.1016/j.hrmr.2008.08.002 · 2.38 Impact Factor
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    • "Second, a perusal of the scant literature reveals that some Austrians (e.g. Ryoo & Rosen 2004; and Vedder & Galaway 2002a) are almost indistinguishable from mainstream labour economists; others (e.g. Yeager 1997) can, with a little finessing, be located in the socioeconomic camp; and others (e.g. "
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    ABSTRACT: Theory and policy relating to labor markets is dominated by the mainstream labor market model, although a less well-known, socioeconomic version can also be identified. The mainstream model is methodologically flawed and forced, thereby, to relegate any (serious) investigation of labor market institutions and/or social structures to the margins of its analysis. The socioeconomic account is not so much methodologically flawed, as methodologically ambivalent. While this ambivalence does not actually prevent the investigation of institutions and/or social structures, it does promote ambiguity whenever we inquire into the precise nature of the interaction between them and labor markets. Insights from Austrian economics, when used in collaboration with critical realist methodology, can play a part in augmenting the socioeconomic account, generating a totally new approach to the analysis of labor markets.
    The Review of Austrian Economics 02/2007; 20(4):247-267. DOI:10.1007/s11138-006-0009-6
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    • "Land rents were found to be a significant deterrent for firms in Schmitt (1999) and Dekle and Eaton (1999), as were wages in Dekle and Eaton. Organized labor has been found to significantly deter industrial location and employment in a number of studies (e.g., Bartik, 1985, and Vedder and Gallaway, 2002), further indicating the important role of wage levels in location. "
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    ABSTRACT: This paper argues that the net economic impact of new firm locations or expansions is determined by a multitude of opposing forces. Using a unique database, I set out to evaluate the net effects of these opposing forces by looking at the net change in local employment and population arising from large (greater than 300 new jobs) firm locations or expansions in the State of Georgia. The analysis suggests that the employment multipliers associated with new firm locations are much less than one; that is, the net employment effect of a large firm opening is smaller than the gross employment impact. This result is consistent with other empirical economic impact studies, which find multipliers much smaller than those of typical input–output models, often less than unity, and a previous study showing little net effect of large plant openings. Expansions of existing establishments are shown to have substantial multiplicative effects, however, with an average employment multiplier of 2.0. I discuss possible reasons for differential impacts across new and expanding firms, focusing on the nature of the firms. Differences in net impact across industries and high-tech versus low-tech firms also is evaluated. I find that the impact of large firm locations or expansions on population in the resident county generally is negative, but positive for the broader region encompassing the county of location and its contiguous neighbors.
    Journal of Regional Science 02/2004; 44(2):289-320. DOI:10.1111/j.0022-4146.2004.00338.x · 2.00 Impact Factor
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