The long-run and short-run impacts of global competition on U.S. union wages

Abstract

Union opposition to trade liberalizing agreements suggests that international trade harms organized labor. Using union contract data, we assess both long- and short-run impacts of international trade on U.S. collective bargaining outcomes. Results indicate that, in the short run, increases in either imports or exports reduce union wages. This is attributed to risk aversion on the part of both unions and management. In the long run, however, trade has little net impact on average union wage settlements. In forming their opposition to more open U.S. trade policies, unions appear more concerned with short-run impacts of trade and are willing to trade-off immediate wage gains in lieu of future employment possibilities.