1 / 22

Topic 8 (Chapter. 13)

Topic 8 (Chapter. 13). Unions. Table 13.1: Union Membership and Bargaining Coverage, Selected Countries, 2004. Union. Norris-LaGuardia Act of 1932: outlaw yellow-dog contract National Labor Relations Act of 1935: rules for collective bargaining

minowa
Download Presentation

Topic 8 (Chapter. 13)

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Topic 8 (Chapter. 13) Unions

  2. Table 13.1: Union Membership and Bargaining Coverage, Selected Countries, 2004

  3. Union • Norris-LaGuardia Act of 1932: outlaw yellow-dog contract • National Labor Relations Act of 1935: rules for collective bargaining • Taft-Hartley Act of 1947: restricted some union activity (right-to-work laws) • Landrum-Griffin Act of 1959: regulate internal union policies (increase union democracy)

  4. Figure 13.1: Union Membership as a Percentage of All Workers, by Sector, United States,1973-2006

  5. Table 13.2: Percentage of U.S. Wage and Salary Workers Who Are Union Members, by Selected Characteristics, 2006

  6. Figure 13.2: Effects of Demand Growth and the Wage Elasticity of Demand on the Market Constraints Faced by Unions

  7. Figure 13.3: Union Maximizes Utility Subject to the Constraint of the Labor Demand Curve

  8. Figure 13.4: Employer Isoprofit Curves

  9. Figure 13.5: The Contract Curve—The Locus of Efficient Contracts

  10. Figure 13.6: The Demand for and Supply of Unionization

  11. Demand and Supply • Demographic change: % female workers up D shifted left. • Changing industrial mix: increase in service sector (high price elasticity) perceived benefit from union is small, establishment size is small D shifted left • Regional shift: to the Sunbelt where right-to-work laws are effectiveS shifted left • Competitive pressures: foreign competition and deregulation high price elasticityD shifted left • Employer resistance: S shifted left

  12. Table 13.3: Union Representation Elections and Unfair Labor Practice Complaints Issued by NLRB, 1970-2005

  13. Figure 13.7: Hick’s Bargaining Model and Expected Strike Length

  14. Implications • UR schedule: if costs to workers of being strike fall, then heighten the resistance (unemployment insurance, unemployment rate..) • EC schedule: if firms can pile inventories, are less profitable, face an elastic demand curve, can hire replacement workers, then heighten the resistance • Strikes are wasteful: require certain bargaining protocol that will help to avert future strikes. (start bargaining earlier, limit the number of contract items,..) then why do they occur?  since threat as such is a weapon (retaining credibility) • Strikes give signals (to know the true level of profits)

  15. Union wage effects • R=(Wu-Wn)/Wn • Four possible reactions • Spillover effect • Threat effect • Wait unemployment • Shifts in labor demand

  16. Figure 13.8: Spillover Effects of Unions on Wages and Employment

  17. Figure 13.9: Threat Effects of Unions on Wages and Employment in Nonunion Sector

  18. Wait unemployment and shifts in labor demand • Wait unemployment: waiting for union jobs to open up. Not everyone who loses a job in the union sector will spill over into the non union sector moderating downward pressure on nonunion wages E(w) = w*probability of getting job • Shift in labor demand: unions put effort to increase product demand

  19. Evidences (wages) • Union wage differential in US is 10-20% • Private sector differential > public sector • US > UK, Germany, Austria, Australia • Union reduce the earnings gap • Bigger during economy expansion. Also hard to replace capital for labor • Mixed evidences on spillover and threat effect: threat effect dominated within cities, spillover effect dominated within industries

  20. Evidences (others) • Ignoring non-pecuniary conditions of employment may be misleading (union firms tend to have less-flexible hours, faster work paces, overtime..) • Union has adverse effect on employment • The effects of unions on productivity and profits are mixed: “pressure” or “voice”? (workers suggestions and preferences can be communicated). Productivity may be higher, but stock prices are lower for unionized firms.

  21. Normative analyses • Potential reductions in social welfare: -Strike waste resources -Use of excess workers create wastage -Mobility of workers are restricted. • Potential increases in social welfare: -Voicing of request and collective bargaining (also solve free-rider problems) -Share monopoly profits -Give “shock” for better management

More Related