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Could you link me to studies that show this effect? What economic reason would there be for this? It makes no sense to me that union creating more expensive lab

by cheald 11y ago

Could you link me to studies that show this effect? What economic reason would there be for this? It makes no sense to me that union creating more expensive labor would increase the costs of non-union labor, except insofar as they reduce the size of the non-union labor pool.

johnward 11y ago
"It makes no sense to me that union creating more expensive labor would increase the costs of non-union labor, except insofar as they reduce the size of the non-union labor pool." I don't have a link. This is all anecdotal. I could be completely wrong but I don't think I'm far off. Lowering the pool of non-union workers is one thing, but also competing to keep those workers from joining a union. Companies generally don't want to be unionized. Not only do they need to compete to keep the worker from leaving but they also need to pay enough to keep the workers happy enough to not unionize their shop. I'm from WV which is basically owned by the coal mines. Each time one of those non-union mines go to vote if they will go union the miners I know tell me the company starts giving out bonuses and things like Harleys to sway them to vote non-union. Even so things that were created or backed by unions have now become laws and directly benefit non-union workers. Like the 40 hour work week. The end of child labor. Employer health benefits. FMLA.
- cheald 11y ago
  Well, you're talking about the effects of the threat of unionization, which I would agree is pretty clearly effective in driving labor costs up. I'm wondering more about the effect of established unions and companies or industries that employ both union and non-union labor; in the case that the union exists, has negotiated wages, and the company or industry employs both union and non-union labor, it seems unreasonable that non-union labor prices should float relative to union-negotiated prices, assuming that there is a sufficient supply of non-union labor.
johnward 11y ago
I found a few studies but to be honest I don't have time to read them. Here is an interesting snippet from one report (which I believe is disputing the other studies that say wages increase in proportion to union wages): The effect of labor unions on wages is one of the more heavily studied topics in empirical labor economics. There exists a reasonably strong consensus among economists that the average union-nonunion wage gap is about 15 percent, a consensus based in no small part on the influence of work by H. Gregg Lewis (1963, 1986). A survey of labor economists at leading universities by Fuchs, Krueger, and Poterba (1998) asked the question: "What is your best estimate of the percentage impact of unions on the earnings of their average member'?" The median response was 15 percent and mean response 13.1 percent; dispersion was low. " http://www2.gsu.edu/~ecobth/PaperReprints/UnionWageEffects.pdf http://www2.gsu.edu/~ecobth/PaperReprints/UnionWageEffects.p...
- cheald 11y ago
  The conclusion of this paper is that the 15% gap estimate is likely far too low (he estimates its actually 21-28%). It also states that when gaps outpage gains, downward wage pressure on nonunion wages due to the "spillover effect" can be understood to be outpacing the upward pressure of "threat effects" (page 4, labeled 236, p.3), which pretty strongly suggests that if his conclusions are correct, unions may have the effect of reducing nonunion wages.

by cheald 11y ago

johnward 11y ago

"It makes no sense to me that union creating more expensive labor would increase the costs of non-union labor, except insofar as they reduce the size of the non-union labor pool." I don't have a link. This is all anecdotal. I could be completely wrong but I don't think I'm far off. Lowering the pool of non-union workers is one thing, but also competing to keep those workers from joining a union. Companies generally don't want to be unionized. Not only do they need to compete to keep the worker from leaving but they also need to pay enough to keep the workers happy enough to not unionize their shop. I'm from WV which is basically owned by the coal mines. Each time one of those non-union mines go to vote if they will go union the miners I know tell me the company starts giving out bonuses and things like Harleys to sway them to vote non-union. Even so things that were created or backed by unions have now become laws and directly benefit non-union workers. Like the 40 hour work week. The end of child labor. Employer health benefits. FMLA.

cheald 11y ago
Well, you're talking about the effects of the threat of unionization, which I would agree is pretty clearly effective in driving labor costs up. I'm wondering more about the effect of established unions and companies or industries that employ both union and non-union labor; in the case that the union exists, has negotiated wages, and the company or industry employs both union and non-union labor, it seems unreasonable that non-union labor prices should float relative to union-negotiated prices, assuming that there is a sufficient supply of non-union labor.

johnward 11y ago

I found a few studies but to be honest I don't have time to read them. Here is an interesting snippet from one report (which I believe is disputing the other studies that say wages increase in proportion to union wages): The effect of labor unions on wages is one of the more heavily studied topics in empirical labor economics. There exists a reasonably strong consensus among economists that the average union-nonunion wage gap is about 15 percent, a consensus based in no small part on the influence of work by H. Gregg Lewis (1963, 1986). A survey of labor economists at leading universities by Fuchs, Krueger, and Poterba (1998) asked the question: "What is your best estimate of the percentage impact of unions on the earnings of their average member'?" The median response was 15 percent and mean response 13.1 percent; dispersion was low. " http://www2.gsu.edu/~ecobth/PaperReprints/UnionWageEffects.pdf http://www2.gsu.edu/~ecobth/PaperReprints/UnionWageEffects.p...

cheald 11y ago
The conclusion of this paper is that the 15% gap estimate is likely far too low (he estimates its actually 21-28%). It also states that when gaps outpage gains, downward wage pressure on nonunion wages due to the "spillover effect" can be understood to be outpacing the upward pressure of "threat effects" (page 4, labeled 236, p.3), which pretty strongly suggests that if his conclusions are correct, unions may have the effect of reducing nonunion wages.