Trade Union Decline and Union Wage Effects in Australia

Union density in Australia fell precipitously in the 1990s. This study investigates how union wage effects may have changed as a result. The findings from 1993 data suggest that union/nonunion wage differentials were very small, especially among workers in high-density industries. By 2001 the overall union wage effect had increased significantly; however, the union/nonunion wage differential was no longer correlated with union density at the industry level.     

The Impact of Union Wage Concessions on Union Premiums

Previous research showing that union wage premiums actually rose from the late 1970s to the mid-1980s suggests that concession bargaining was more media hype than the result of a fundamental change in collective bargaining. Our study found that nonrandom attrition of workers from the union sector does lead to an upward bias in the measured growth of union premiums, but concession bargaining was not a sufficiently widespread occurrence to reduce the size of union premiums during the sample period.     

Personnel Decisions,Wage Profiles and Investment in Firms

An investment model where firms mitigate adverse hold‐up effects using hiring and personnel policies is theoretically investigated and empirically scrutinized. While no evidence for the prediction of differing worker characteristics, other than gender, across firms is found, demand (firm) side factors are evident in the hiring process. Evidence on other personnel policies is consistent with theory, which predicts firms with high‐investment expenditures resist unions, utilize more temporary and shift‐time workers and conduct more multitask training. Wages in high‐investment firms are higher, more sensitive to unemployment and experience variables that exhibit greater effects than in low‐investment firms.     

The Union Relative Wage Effect for Academic Librarians

This note investigates the impact of labor unions on the starting salaries of academic librarians. Using data collected from members of the Association of Research Libraries (ARL) and employing standard ordinary least squares (OLS) and seemingly unrelated regressions techniques, the union relative wage gap was estimated annually over the 1989–1998 time period. Three important results were found. First, unionized academic librarians received a positive and significant union wage premium throughout most of the decade studied. Second, this wage premium declined in magnitude over time following the trend in the economy as a whole. Lastly, by the end of the sample period, the wage effect had disappeared and was no longer significantly different from zero.     

Compensating Wage Differentials in the Union and Nonunion Sectors

This paper tests for the existence of structurally different compensating payments in the union and nonunion sectors of the economy. Significant differences may stem from the different mechanisms by which such payments are determined: markets are the primary mechanism in the nonunion sector, while Political processes play a major role in the union sector. The empirical results provide tentative support for the structural differences hypothesis; They also reveal an absence of positive and significant compensating payments in nonunion labor markets.     

Does Technological Change Affect Union Wage Bargaining Power?

This paper uses data from a survey of Canadian establishments to consider the effects of computer-based process technological change on wage bargaining power. The analysis finds that union wage differentials for blue-collar workers as a whole were lower among firms that had introduced process computerization than among those that had not. The relationship between technological change and the union wage premium differed, however, for skilled and unskilled labour. The union wage effect was lower for skilled workers and higher for general manual occupations in the sub-sample where process computerization had occurred. Explanations for these observed relationships appear to involve both economic and institutional components.     

Union Wage Effects in Nevada's Hotel and Casino Industry

I use the significant union presence in Las Vegas's hotel, gaming, andrecreation (HGR) industry juxtaposed to the near absence of unions in Reno's HGR sector to study union wage effects. I find wages of highly unionized occupations in Las Vegas's HGR industry to be significantly higher than wages of identical occupations in Reno. Furthermore, I detect little impact from Las Vegas's HGR unions on wages in the wholesale and retail trade (WRT) industry, a much less unionized sector.     

Market Structure, Strike Activity, and Union Wage Settlements

We attempt a synthesis of the industrial relations market structure hypothesis with the modern asymmetric information theory of wage and strike outcomes. The industrial relations literature contains arguments indicating that wage settlements should be positively related to the degree of product market sales concentration and the degree of product market coverage by the union. In our empirical analysis of the periods 1970–1980 (strikes) and 1976–1980 (wages), we find that the relation between trade-adjusted sales concentration and wage settlements is positive at low and intermediate levels of concentration but negative at the highest levels of concentration. The relation is always negative for strike probabilities. We also find that the trade-adjusted per cent of the product market covered by the same union and the percentage covered by other unions are positively related to both wage settlements and strike probabilities.     

Occupational Regulation in the European Union: Coverage and Wage Effects

We present the first EU‐wide study on the prevalence and labour market impact of occupational regulation in the European Union. Drawing on a new EU Survey of Regulated Occupations, we find that licensing affects about 22 per cent of workers in the European Union, although there is significant variability across member states and occupations. On average, licensing is associated with a 4 per cent higher hourly wage. Using decomposition techniques we show that rent capture accounts for one‐third of this effect and the remainder is attributed to signalling. We find considerable heterogeneity in the wage gains by occupation and level of educational attainment. Finally, occupational licensing increases wage inequality. After accounting for composition effects, licensing increases the standard deviation of wages by about 0.02 log points.     

Models of Union Wage Determination: What Have We Learned Since Dunlop and Ross?

This study surveys the development and current status of models of union wage determination since Dunlop and Ross first wrote on the subject in the 1940s. To start, I identify eight empirical dimensions of the union wage effect that models have endeavored to explain and predict. A number of alternative theoretical models are then examined, starting with Dunlop's "economic" and Ross' "political" models and extending to the plethora of models and extensions found in the modern-day literature. Examples include standard monopoly, efficient contract, and bargaining models, as well as offshoots such as median voter, insider-outsider, property rights, and principal-agent models. The article then examines the extent to which these various models generate hypotheses and insights apropos to explaining the eight major empirical dimensions of the union wage effect. The conclusion summarizes what has been learned, the major shortcomings of this literature, and steps for further progress.     

The Greek Public Sector Wage Premium before the Crisis: Size,Selection and Relative Valuation of Characteristics

We examine the Greek public–private wage differential before the debt crisis to evaluate the prospective impact of the recent public sector pay cuts. We find a large public premium which persists after controlling for individual and job characteristics. For men, much of this is accounted for by self‐selection into the sector that rewards better their characteristics, while for women it is largely driven by sectoral differences in returns. We attribute these effects to more egalitarian pay structures in the public sector and to demand problems in the private sector. The recent policy measures only partially change this situation, as wage deflation extends to the private sector, preserving public premia for the low paid.     

Successful Wage Concertation: The Economic Effects of Wage Pacts and Their Alternatives

Recent debates on pacts have focused on the prerequisites for their emergence, whereas questions of their efficacy have receded into the background. In particular, systematic analyses of the effectiveness of pacts in terms of their capacity to enhance economic performance are missing. The aim of this article is therefore to assess the economic impact of pacts. As the majority of pacts concern wages, the assessment will concentrate on a comparison of the performance of pacts with alternative governance mechanisms for wage policies, that is, alternative pay‐setting modes. The findings show that when wage pacts are endowed with the ability to govern lower‐level pay determination, they are better at enhancing economic performance than other forms of coordination.     

The British National Minimum Wage

Great Britain has had statutory regulation of minimum pay for much of this century but never previously had a national minimum wage (NMW). This paper outlines the history of minimum wage regulation culminating in 1997 with the establishment of the Low Pay Commission (LPC) and the introduction of the NMW in 1999. The main issues considered by the LPC were the definition of the NMW, the rate itself, and what to do about younger workers. Although there is general agreement that minimum wage systems reduce wage inequality, their impact on the distribution of household income is more controversial. Evidence presented suggests the NMW may have a more egalitarian impact on household incomes than is sometimes asserted. The Report of the LPC is only the beginning of the story. Responses to it were generally favourable; parliamentary regulations are needed to translate the recommendations into law; the NMW has to be enforced and evaluated. This necessary follow-up to the Report is discussed in the concluding sections.