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UNION ORGANIZATION IN ADVANCED INDUSTRIAL DEMOCRACIES
Abstract
Michael Wallerstein was a leader in developing a rigorous comparative political economy approach to understanding substantive issues of inequality, redistribution, and wage-determination. His early death from cancer left both a hole in the profession and a legacy that will surely provide the foundation for research on these topics. This volume collects his most important and influential contributions, organized by topic, with each topic preceded by an editorial introduction that provides overview and context.
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The consequences of aggregation, temporal or spatial, for the estimation of demand models are theoretically well-known, but have not been documented empirically with appropriate data before. In this paper we conduct a simple, but instructive, exercise to fill in this gap, using a large quarterly dataset at the establishment-level that is increasingly aggregated up to the 2-digit SIC industry and the yearly frequency. We only obtain sensible results with the quadratic adjustment cost model at the most aggregated levels. Indeed, the results for quadratic adjustment costs confirm that aggregation along both dimensions works to produce more reasonable estimates of the parameters of interest. The fixed adjustment cost model performs remarkably well with quarterly, but also with yearly, data. We argue that is may be one more consequence of the unusually high labor adjustment costs in the Portuguese labor market.
Two players have to reach an agreement on the partition of a pie of size 1. Each has to make in turn, a proposal as to how it should be divided. After one player has made an offer, the other must decide either to accept it, or to reject it and continue the bargaining. Several properties which the players' preferences possess are assumed. The Perfect Equilibrium Partitions (P.E.P.) are characterized in all the models satisfying these assumptions. Specially, it is proved that when every player bears a fixed bargaining cost for each period (c1 and c2), then: (i) if c_{1}>c_{2}(1-\delta _{2})/(1-\delta _{1}\delta _{2})$.
This paper examines the impact of unionization on profit- ability, growth and productivity using time series data on over 900 product line businesses in the North American manufacturing sector (predominantly U.S.). The first section of the paper develops a simple theoretical framework for studying the effect of the union on firm performance. A key result of this analysis is that information about union wage and productivity effects is not sufficient to permit prediction of the sign (or magnitude) of consequent changes in the rate of return on capital; one must know the parameters of production and demand. Expanding the model to allow for the effects of market structure and alternative bargaining regimes establishes the need to examine several indicators of firm performance in assessing the impact of the union. The empirical analysis reveals sizeable negative union effects on profitability, but growth, productivity and the capital-labor ratio appear to be little affected by unionization in this data. The data are thus consistent with a model of union-firm interaction in which collective bargaining affects the distribution of profits, but leaves real magnitudes unchanged. The evidence suggests, however, that unionization may have longer term implications for efficiency since the impact on profitability appears to fall most heavily on firms with relatively little market power.
There is a widespread consensus among nonacademic observers that labor unions with large numbers of unemployed members have been central actors in political coalitions demanding protectionist trade policies since the mid-1970s in advanced industrial societies. Yet trade unions and unemployment are hardly mentioned in most theories of the politics of international trade. The purpose of this paper is to develop a theoretical framework for understanding the importance of unemployment as a determinant of protectionist demands that is consistent with optimizing behavior on the part of union members and firms. Models of labor negotiations derived from cooperative bargaining theory are used to illustrate why the material benefits of protection received by union members and their employers in protected industries increase when union members are unemployed, even when workers are risk neutral and capital is immobile.
This paper is primarily an attempt to isolate the determinants of trade union membership growth in Canada over the past six decades.
This article elaborates the thesis that economic growth and various types of collective action by class-linked actors determine the expansion and decline of welfare spending in rich capitalist democracies. Our multivariate model of this thesis, specified to 1960-1971 growth rates in direct cash transfer payments as proportions of gross domestic product, is supported strongly by regression analyses. These indicate that economic growth notably facilitates transfer payment growth. They also suggest that rightist party participation in government notably dampens welfare expansion, while leftist, centrist and Christian democratic party participation in government are conducive to welfare expansion; and they suggest that the political influences of both unions and large industrial corporations are conducive to growth in transfers payments as well. In addition, state authorities appear to augment welfare spending in response to working class protests, strike activity, and capital investment/disinvestment — activities outside the boundaries of political arenas typically conceived. In short, institutional and extrainstitutional class-linked politics along with economic growth seem largely to determine welfare payment changes. In contrast with other comparative research on the welfare state, the fit of model to data is strong and findings are robust in the face of statistical controls, small changes in measurement, and small changes in sample.
In spite of the traditional legitimacy accorded the market mechanism of the private sector in advanced capitalist nations, governments in those nations have become more influential as providers of social services and income supplements, producers of goods, managers of the economy, and investors of capital. And in order to finance these various activities the revenues of public authorities have increased dramatically–to a point where they are now equivalent to one-third to one-half of a nation's economic product.
This growth in governmental activity in advanced capitalist society is examined by considering the causes, and some of the consequences, of the expansion of the public economy–defined, following Schumpeter's discussion of the “tax state,” in terms of the extractive role of government. The primary concern of this article is to discover why some nations have experienced a far greater rate of increase in recent years and, as a result, have a much larger public economy than other nations. Five types of explanation are elaborated to account for the growth of the scope of governmental activity: (1) the level and rate of growth in the economic product; (2) the degree to which the fiscal structure of a nation relies on indirect, or “invisible,” taxes; (3) politics–in particular the partisan composition of government and the frequency of electoral competition; (4) the institutional structure of government; and (5) the degree of exposure of the economy to the international marketplace. The article evaluates the five explanations with data for 18 nations, and concludes by discussing some implications of the analysis.
But in the final analysis the cases cited above in Switzerland, Belgium, or the Netherlands are only modest exceptions or glosses on the general absence of formal union or closed-shop arrangements continental or Western Europe, and this contrasts, of course, with the United States. Whether or not this particular divergence may be reduced in the future remains to be seen. Certainly, in the U.S. with the union movement increasingly aware of its relative (to the labor force) decline in numbers, if anything one could anticipate even greater determination to insist on strong union-security arrangements in the future. (Whether this might be offest by some growth in state right-to-work laws, is problematical). Forecasting the future of the closed or union shop, or other forms of union security in Western Europe is hazardous, although this paper does suggest some grounds for development of a trend in the direction of such developments in several countries.
How then in retrospect does the West European experience relate to the broader theme of the conference, the free rider issue? Trade unionism in European history has been at least as much a social and political collective phenomenon, as it has been an economic phenomenon. Economists must be able to understand workers’ relationships to unions in terms of these collective realities, if their explanations of why workers do or do not join unions, or why unions may or may not feel compelled to seek the closed or union shop are to achieve a similar reality.
Recent papers by Lange and Garrett and by Jackman have debated whether the political and economic power of the Left has had a sustained impact on the economic growth of relatively affluent capitalist democracies since 1973. This paper indicates that, consistent with theory and research by Lange and Garrett, they have had such an impact. Economic growth between 1974 and 1980–1982 accelerated where both unions were organizationally strong and Left parties were strong participants in governments; and this finding is not an artifact of a 1970s oil boom in Social Democratic Norway. In addition, it is robust in the presence of several key control variables drawn from economic theory. These variables indicate that less affluent and slower growers tended to catch up, and that capital formation tended to accelerate growth while progressive governmental redistribution of income tended to dampen it.
Using data relating to 13 Western democracies, this paper deals with the relation between working-class political and industrial power and the feasibility of a national wages policy. A wages policy is only feasible in a democracy if it is accepted by tradeunion leaders on behalf of the workers whom it directly affects. For this acceptance to be forthcoming we hypothesize that two conditions must be fulfilled. First, the working class must be sufficiently united politically to elect a Socialist government that will administer the wages policy in such a way that workers, or at least their leaders in the trade unions, are convinced that the policy is not simply a way of depressing their incomes relative to those of the rest of the population. Second, the workers must be sufficiently united to form a strong centralized union movement that can help administer the policy without imposing excessive strain on the cohesion and loyalty of its own organization.
Recent interest in trade union activity has led to the development of econometric models of union membership growth. This
paper examines the structural stability of two of the leading models—Ashenfelter-Pencavel's and Bain-Elsheikh's—each of which
claimed to have captured the primary determinants of union growth in the twentieth century. The models were reestimated using
revised, corrected, and extended membership data, and a nonlinear, maximum-likelihood procedure was employed to estimate the
shift-point for each model. Contrary to previous studies, we found evidence of a break in the structure of each model. And
unlike earlier work that hypothesized a World War II break-point, our estimated point was 1937–1938, most likely reflecting
the impact of the Wagner Act.
I. Some determinants of union growth, 435. — II. Empirical results, 439. — III. Consideration of some subperiods, 445. — IV
Conclusion, 447.
This paper tests the charge by some observers that one reason for the decline in unions' share of private sector employment has been a decline in their commitment to growth. The author presents several measures of the organizing expenditures of 27 national unions, representing about one-half of all union members in this country, over the 1953-77 period. These data show that organizing expenditures rose significantly over that period, whether measured in current or constant dollars, although they declined slightly as a proportion of total union expenditures. (Abstract courtesy JSTOR.)
The paper provides an informal introduction to some of the main themes of the recent literature on “non-cooperative” or “sequential”
bargaining models. It focuses in particular on the relationship between the new approach and the traditional axiomatic approach
exemplified by “Nash bargaining theory” It illustrates the new insights offered by the non-cooperative approach, by reference
to a detailed analysis of the manner in which the presence of an outside option available to one of the parties will affect
the negotiated outcome. Finally, the difficulties which arise in extending this analysis to two-person bargaining with incomplete
information, and to n-person bargaining, are discussed.
This is a revised version of the fourth Review of Economic Studies Lecture presented in April 1985 at the joint meeting of the Association of University Teachers of Economics and the Royal Economic
Society held in Oxford. The choice of lecturer is made by a panel whose members are currently Professors Hahn, Mirrlees and
Nobay, and the paper is refereed in the usual way.
One of the perennial problems of business cyde theory has been the search for a convincing empirical description and theoretical explanation of the behaviour of wage rates during fluctuations in output and employment. Even the empirical question is hardly settled, although the most recent careful study (Geary and Kennan) confirms the prevailing view that real-wage movements are more or less independent of the business cycle. There are really two subquestions here. The first presumes that nominal wage stickiness is the main route by which nominal disturbances have real macroeconomic effects, and asks why nominal wages should be sticky. The second focuses on real wages, and asks why fluctuations in the demand for labour should so often lead to large changes in employment and small, unsystematic, changes in the real wage.
Does It Pay To Organize? Estimating the Cost to Unions
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