Negative Union Effect Research Articles

What makes workers happy: Empowerment, unions or both?

Does the negative effect of union membership on job satisfaction, as shown in Anglophone countries, also hold for Continental Western Europe? Given the differences in industrial relations, I hypothesize that the effect will be different. I also test hypotheses about the effect of empowerment on job satisfaction, which might explain the negative union effect, and broaden the analysis to include pay satisfaction. Analyses of European Social Survey data show that the negative union effect does not exist for Continental Western Europe and that this can be explained by empowerment of employees.

Impacts of Unionization on Quality and Productivity

Using a regression discontinuity design, the authors of this article examine the effects of nursing home unionization on several labor, establishment, and consumer outcomes. They find negative effects of unionization on staffing levels and no decline in care quality, suggesting positive labor productivity effects. Some evidence suggests that nursing homes in less competitive local product markets and those with lower union density at the time of election experienced stronger union employment effects. Unionization appears to raise wages for a given worker while also shifting the composition of the workforce away from higher-earning workers. By combining credible identification of union effects and firm- and worker-level outcomes over time with measures of market-level characteristics, this study provides important new evidence on many controversial questions in the economics of unions. It also generates evidence from the service sector, which has grown in importance and where evidence has been thin.

Impacts of Unionization on Quality and Productivity: Regression Discontinuity Evidence from Nursing Homes

This paper studies the effects of nursing home unionization on numerous labor, establishment, and consumer outcomes using a regression discontinuity design. We find negative effects of unionization on staffing levels and no decline in care quality, suggesting positive labor productivity effects. Some evidence suggests that nursing homes in less competitive local product markets and those with lower union density at the time of election experienced stronger union employment effects. Unionization appears to raise wages for a given worker while also shifting the composition of the workforce away from higher-earning workers. By combining credible identification of union effects, a comprehensive set of outcomes over time with measures of market-level characteristics, this study generates some of the best evidence available on many controversial questions in the economics of unions. Furthermore, it generates evidence from the service sector, which has grown in importance and where evidence has been thin.

What Do Unions Do to Pension Performance?

This study argues that the promotion of union goals could have positive, negative, or neutral effects on risk adjusted return performance. Moreover, the union's ability and incentive to use pension assets to promote union goals will vary with the design of the pension. Using panel data on over 36,000 pension plans drawn from IRS Form 5500 filings, we empirically estimate the effects of unions on risk adjusted returns and find that the union effect on performance varies in ways that are consistent with our priors. In particular, unions have the largest negative effect among multi-employer defined contribution plans and the negative effect of unions can be eliminated by a switch to participant direction. Also, we find that unions improve performance for single employer defined contribution plans.

Trade union membership and earnings in Kenyan manufacturing firms

This study analyses the effect of trade unions on male earnings in the Kenyan manufacturing sector using a regression method, which takes into account endogeneity of the union status of workers. In contrast to earlier studies of the Kenyan labour market that report a negative effect of unions on wages, a positive effect is found. The study further shows that elite workers tend to abstain from union membership.

The impact of unions on job satisfaction, organizational commitment, and turnover

Conclusion The research on the exit-voice hypothesis, both in the United States and abroad, shows convincingly that most of the variance in the negative union effect on job satisfaction can be accounted for by job quality, industrial relation climate, and wages. Union members see their jobs as less attractive than do nonunion workers in terms of skill requirements, task complexity, the amount of autonomy or discretion available, and opportunities for promotion. Union members also perceive the supervision they receive and the labor-management relations they experience as less satisfactory. They are, however, clearly better off with respect to wages, benefits, and pensions. But when it comes to job satisfaction, the economic advantages of union jobs are not sufficient to compensate for job content and work environment factors. It comes as no surprise to the job satisfaction researcher that job content — the nature of the tasks people are given to do — weighs heavily in overall job satisfaction scores. While there are individual differences in the degree to which people prefer intrinsically interesting jobs, there is ample empirical evidence showing that autonomy, skill variety, complexity, challenge, and advancement are important determinants of people's affective reactions to their jobs (Deci, 1975; Hackman and Oldham, 1980; Kanfer, 1990). The relative importance of job content factors to overall job satisfaction is also mirrored in the most commonly used measures of job satisfaction (Weiss et al., 1967).

The Effects of Unions on Profitability: Canadian Evidence

Considering rates of return on capital, sales and assets, the evidence primarily but not unambigously supports a negative effect of unions on profitability. Whether this occurs only through effects on wages and labour productivity or through other channels as well is unclear.

Unions and Employment Growth: The One Constant?

Sequential analyses of the major workplace data sets available to British researchers—the cross‐sectional Workplace Industrial/Employee Relations Surveys (WIRS/WERS)—have revealed shifts in some previously well‐established associations between union presence and firm performance, so much so in fact that it has become conventional to speak of a pronounced reduction in the “disadvantages of British unionism.” One finding that seems to have persisted in cross section, however, is the negative effect of unions on employment growth. Following on a recent study in this Journal, we reexamine the issue using employment data from a panel of firms surveyed at two points in time rather than a single cross section. We report similar evidence of employment retardation in union regimes. On the other hand, the new data also suggest that some other unfavorable union effects may be longer‐standing than previously reported.

Unions and Employment Growth: The One Constant?

Sequential analyses of the major workplace data sets available to British researchers - the cross-sectional Workplace Industrial/Employee Relations Surveys (WIRS/WERS) - have revealed shifts in some previously well-established associations between union presence and firm performance, so much so in fact that it has become conventional to speak of a pronounced reduction in the disadvantages of British unionism. One finding that seems to have persisted in cross section, however, is the negative effect of unions on employment growth. Following on a recent study in this Journal, we reexamine the issue using employment data from a panel of firms surveyed at two points in time rather than a single cross section. We report similar evidence of employment retardation in union regimes. On the other hand, the new data also suggest that some other unfavorable union effects may be longer-standing than previously reported.

Unions and the Employment Growth: Panel Data Evidence

This study adds to the small empirical literature on the impact unions have on employment growth using data from Australia. Unlike previous studies, the data used are from a panel of firms surveyed at two points in time rather than a single cross section. The results indicate a negative union effect on employment in private‐sector firms of about 2.5 percent per annum that, despite the very different institutional framework that prevails in Australia, is consistent with results obtained with North American data.

Bargaining, efficiency wages, and the price–cost markup

The size of the negative effect of unions on the price–cost markup in efficient bargain models depends on the extent to which the union cares about employment rather than wages. A negative effect in labour demand models can also arise under efficiency wages.

UNIONS AND PROFITABILITY OVER THE 1980s: SOME EVIDENCE ON UNION-FIRM BARGAINING IN THE UNITED KINGDOM*

In this paper an attempt is made to assess the behaviour of the rate of return on sales of unionised firms as compared to the non-unionised ones in the late 1980s in the United Kingdom. The main aim is to examine what has happened to the relationship between unionisation and profitability after the changes in the union legislation, competition environment and cyclical variations that took place over this period. The impact of different forms of union-firm bargaining on the union-profitability effect is also examined. The data reveal that the negative union effect on profitability exists, even after controlling for firm specific fixed effects, but that it has been sharply reduced over the 1980s.

Unionization and Profitability: Evidence of Spillover Effects

Ruback and Zimmerman's (1984) event study, which showed that formal union-organizing activity significantly lowers a firm's market value, provides compelling evidence that unionization reduces a firm's profitability. Union-organizing activity may also have sizable cross-firm or spillover effects on the performance of neighboring firms. Thus the total impact of union organizing on the wealth of firm owners may be substantially understated by focusing only on the firm in which the union-organizing activity occurs. This paper presents an alternative approach for estimating union spillover effects on profitability using a data set and methodology similar to Ruback and Zimmerman's. We find that the total negative effects of unionization on profits, after cross-firm or spillover effects are included, are nearly three times as large as the own-firm effects reported by Ruback and Zimmerman. The hypothesis that changes in unionization have spillover effects on nonunion firms is well known. Formal union-organizing activity at one firm may increase the threat of unionization at other firms. Neighboring firms may respond to the greater threat of unionization

The Effect of Unionization on Employment Growth of Canadian Companies

This longitudinal analysis of employment in 510 Canadian firms over the period 1980 to 1985 provides evidence that union firms in both the manufacturing and nonmanufacturing sectors experienced substantially slower employment growth than comparable nonunion firms. Controlling for industry sector, firm size, and firm age, the author finds that within the manufacturing sector, union firms grew 3.7% more slowly per year than nonunion firms, and within the nonmanufacturing sector, union firms grew 3.9% more slowly than nonunion firms. Small firms in both sectors, however, appear to have escaped any negative union effect on employment growth. Of the control variables, firm age appears to be much more important than firm size in explaining employment growth.

Turnover Down Under: Trade Unions and Exit Behaviour in Australia

Researchers typically find a negative union effect on quits in United States data and attribute part of this to 'voice' effects. In an analysis of plant-level Australian data, no significant correlation between unionization rates and quits is found. More direct measures of union voice in the workplace, however, exhibit a strong negative relationship to quits. It is concluded that unions must devote resources in order to provide meaningful voice, which, in turn, reduces quits.

Unionization and Job Design Under Programmable Automation

New findings from an original national survey indicate that machining jobs include major computer programming responsibilities far more commonly than received labor process theory would lead us to expect or predict. In unionized plants, workers are less likely to program their machines, perhaps because of management's desire to avoid the constraints imposed by collective bargaining agreements. Among recent adopters of the technology, informal bargaining through joint labor‐management problem‐solving committees neutralizes this negative union effect.

Unions and Monopoly Profits

Using cross-sectional data for U.S. manufacturing, the author identifies a negative effect of unions on the profits of highly concentrated industries and virtually no effect on the profits of unconcentrated industries. results for concentrated industries are explained in terms of the monopoly model which predicts a negative effect of unions on profits equivalent to the change in surplus. monopoly model also suggests that previous profit studies which omitted the union variable were likely to significantly underestimate the relationship between concentration and profits. This prediction is also supported by empirical evidence. M sANY studies have demonstrated the ability of unions to raise wages above the level of nonunion workers.' Higher union wages in turn may affect the level of prices, employment, capital intensity, productivity and profits. Recent studies by Clark (1982) and Freeman (1983) have found significant negative effects of unions on profit rates in the United States. Using line of business data from 1970 to 1980 for 900 firms, Clark found a negative effect of unions on the rate of return to capital. More specifically, the union effects were found to be significantly negative when market shares were low and insignificant when market shares were high. According to Clark, the absence of a union effect in the latter case can be explained by the ability of firms with market power to pass on higher union wages into higher prices (1982, p. 47). On the other hand, Freeman (1983), using data from the Survey of Manufactures from 1958 to 1976 and the Internal Revenue Service from 1965 to 1976 also found a negative effect of unions on profits. Contrary to Clark's results, however, the union profit effect was negative only in concentrated industries. point of contention appears to be the role of concentration in determining the union profit effect, rather than the overall negative impact of unions. results of Clark and Freeman are important because previous industrial organization research on profit rates generally ignored unions. For instance, of the forty-six profit studies surveyed by Weiss (1974), none included a union variable. More recently, a profit study in this Review by Ravenscraft (1983) using high quality, line of business data from the Federal Trade Commission, also ignored unionization. As will be demonstrated, the omission of the union variable leads to an understatement of the effect of industrial concentration on profits. This means that concentrated industries generate much greater profits than indicated by previous research. In order to measure the size of the understatement, a new concept, employer's surplus, is developed which illustrates the theoretical impact of a union wage increase on monopoly profits. empirical estimates of surplus in this paper indicate how monopoly profits are divided between firms and unions. Most of the data used in this study were obtained from James Medoff and Charles Brown.2 Unlike the previous two studies, each observation corresponds to a state by two digit SIC industry for manufacturing in 1972. Because of the large variations in unionization across states, this data set offers a useful test of the union profit effect. I. Employer's Surplus According to accepted theory, the profit maximizing monopolist will employ labor up to the point where the market wage equals the marginal revenue product, MRP.3 If for simplicity we assume that all other factors are variable, then the MRP curve represents the monopolist's long-run demand for labor. In the absence of unions, employment is determined by the intersection of the MRP curve and nonunion wage (Wn) as pictured in figure 1. If unions raise wages to Wa, employment will decrease from Ln to L, with the reducReceived for publication November 28, 1983. Revision accepted for publication July 6, 1984. *Eastern Washington University. I am very grateful to Dave Bunting, Lisa Brown, Bill Dickens, Claire Brown, and George Strauss for their valuable suggestions on this research. This paper is a revised version of chapter 3 from the author's Ph.D. thesis, The Union Impact on Profits, Productivity, and Prices, University of California, Berkeley. 1 See Parseley (1980) for a recent review of this literature. 2 I would like to thank Brown and Medoff for making these data available to me. 3 Marginal revenue product is equal to marginal revenue multiplied by marginal physical product. See Rees (1979).

CAN FACULTY UNIONISM BOOMERANG ON THE STUDENTS? IT DEPENDS ON THE MOTIVATION AND AIM.

The article reports the author's opinions regarding the unionization of business teachers. She suggests that unionization affects the business students as well at their professors. Possible reasons for faculty to unionize, including job security, decreased college enrolment and gains in income, are discussed. The negative effects of unionization are also examined.

CAN FACULTY UNIONISM BOOMERANG ON THE STUDENTS-A QUALIFIED YES.

The article reports the author's opinions regarding the unionization of business teachers. He suggests that unionization affects the business students as well at their professors. Possible reasons for faculty to unionize, including job security and gains in income, are discussed. The author considers some of the negative effects of unionization. The limitations of collective bargaining are also examined.