Changes in Union Wage Effects by Industry: A Fresh Look at the Evidence

Unions suffered a modest decline in their capacity to increase wages over nonunion levels between the late 1970s and the middle 1990s according to evidence presented here. The decline in relative wages was significant in only 13 (of 78) industries examined; in 11 industries the differential increased significantly. The industrially disaggregated econometric evidence is broadly consistent with institutional evidence about developments in particular industries; however, more industry-grounded research is clearly warranted.     

On-the-Job Training, Immigration Reform, and the True Wages of Native Male Workers

This study measures the Immigration Reform and Control Act's (IRCA) impact on the "true" earnings of native workers. True earnings include observed wages and compensation received in the form of on-the-job training (OJT). Using 1983–1992 NLSY data, we present evidence suggesting IRCA reduced the true wages of male natives most likely to be mistaken as unauthorized. Our findings suggest that Mexican Americans suffered the largest decline in post-IRCA OJT. It appears then that antidiscrimination policies following recent immigration reform have not fully protected some U.S. natives against unintended IRCA-related employment discrimination.     

Employment Contacts and Minority-White Wage Differences

We study effects of job contacts on wages in inner-city Boston in 1989 and in the 1982 NLSY. Race/Hispanicity differences in wages are not explained by an absence of contacts among minority youths. Rather, in the Boston data, lower wages of black youths are explained by lower "returns" to their contacts. In the NLSY there is little evidence of lower return to black youths' contacts, but there is evidence of lower returns to Hispanic youths' contacts.     

Persistence of informal social networks in East Asia: Evidence from South Korea

This study investigates the nature and influence of informal social networks in South Korea (yongo) by analyzing trust levels and network cohesion. Predominantly based on studies on Chinese guanxi, it is widely believed that the further a nation develops stable formal institutions the more the influence of informal relations decreases. Given South Korea’s position as a strong economic powerhouse with established rule of law and democratic institutions, the influence of yongo should play an insignificant role today. We find significant evidence that network cohesion of yongo is still strong in South Korea, despite its economic rise. Contrary to expectation, we observe a higher-than-expected degree of general trust and a continuous commitment to yongo ties at the same time. These findings document recent changes in South Korea such as the beginning of its multicultural opening, whereas informal yongo ties, characterized by emotional interpersonal bonds, still remain pronounced. Foremost, we recommend current beliefs about the correlation of institutional development and decreasing informal transactions to be reconsidered. We propose further studies to better understand how informal social networks evolve over time.     

The Labor‐Market Effects of Occupational Licensing Laws in Nursing

We study the labor‐market impacts of occupational licensing laws on nursing, an economically important occupation. States adopted licensing of registered and practical nurses at different times, which allows us to estimate the effects of licensing on wages and participation for each nursing profession. We find that licensure raised wages by 5 to 10 percent but there is no evidence that it reduced overall participation. Additionally, we show that licensure equalizes wages within the occupation with minority wages rising faster than nonminority wages; however, licensing had a negative but not statistically significant impact on the participation of minorities in nursing.     

Collective Wage Contracts,Opt‐Out Clauses,and Firm Wage Differentials: Evidence from Linked Employer–Employee Data

Using a large linked employer–employee data set, this article studies whether the existence and use of flexibility provisions within centralized collective wage agreements alter the structure of pay across employers. Using level regressions and first‐difference methods, we find that—compared with contracts without any flexibility—wages under opt‐out clauses are more responsive to local profitability conditions in below‐average‐performing establishments. In contrast, the sensitivity of wages to local profitability is smaller in high‐performance establishments. Our results provide further evidence for a threat potential of the existence of opt‐out clauses whose impact on flexibility is larger than the real application.     

Vulnerable Jobs and the Wage Effects of Import Competition

Do job characteristics modulate the relationship between import competition and workers’ wages? Using pooled cross‐sectional, linked employee‐establishment Census Bureau microdata and O*NET occupational characteristics, the paper models import competition and wages for more than 1.6 million individuals, grouped by job vulnerability defined by routineness, analytic complexity, and interpersonal interaction. Results show import competition is associated with wages that are: lower in routine and less complex jobs; higher in nonroutine and complex jobs; and higher for the highest and lowest levels of interpersonal interaction. This demonstrates the importance of accounting for occupational characteristics in understanding how trade and wages relate.     

The Prevalence and Effects of Occupational Licensing

Our study provides the first national analysis of the labour market implications of workers who are licensed by any agency of the government in the USA. Using a specially designed Gallup survey of a nationally representative sample of Americans, we provide an analysis of the influence of this form of occupational regulation. We find that 29 per cent of the workforce is required to hold a licence, which is a higher percentage than that found in other studies that rely on state‐level occupational licensing data or single states. Workers who have higher levels of education are more likely to work in jobs that require a licence. Union workers and government employees are more likely to have a licence requirement than are non‐union or private sector employees. Our multivariate estimates suggest that licensing has about the same quantitative impact on wages as do unions — that is about 15 per cent — and that being both licensed and in a union can increase wages by more than 24 per cent. However, unlike unions which reduce variance in wages, licensing does not significantly reduce wage dispersion for individuals in licensed jobs.     

ICT investment and GDP growth: Causality analysis for the case of Korea

This study investigated how investment in the industry of Information, Communication and Technology (ICT) has been interlocked with the GDP growth of South Korea. Based on seasonally-adjusted quarterly time-series data for the period between 1999 and 2016 available from the Korea Statistical Information Service, a Vector Error Correction model was applied for the analysis. The results revealed that ICT investment and GDP growth affected bi-directionally except for the short-run case in which only ICT investment affected GDP growth. The results explain that ICT investment plays an important role in the economic growth of South Korea in the long term; at the same time, investment size in the ICT industry increases as the economy grows. Without controlling any other factors, we found GDP increases by 0.4% when ICT investment increases by 1%. However, in the short term, only ICT leads to GDP growth. Therefore, the recent stagnation in ICT investment experienced in South Korea could negatively affect the economic growth of Korea in the short run, and hence, in the long-run, if it should become prolonged. The ICT investment strategy revealed from this study is especially useful to policy-makers who plan the economic growth in South Korea and other ICT-advanced countries because promoting ICT utilization across all sectors requires putting legal and policy mechanisms in place.     

Between Fragmentation and Centralization: South Korean Industrial Relations in Transition

This study investigates profound changes in South Korean industrial relations after the Asian financial crisis of 1997. Korea's neoliberal labour reforms have produced a large number of non‐standard workers, deepening the union representation gap. Realizing that the fragmented enterprise unions could not adequately protect workers from this degradation of labour, trade union leaders began a major organizational drive at the industry level and tried to institutionalize sectoral bargaining. A political space for union centralization was partially opened because the state needed labour's co‐operation to implement neoliberal reform packages. However, disorganized centralization in Korea, where important decisions on wages and working conditions have been negotiated mainly at the company level, has faced limitations in achieving meaningful changes in the dualistic structure of the labour market. This study concludes with a review of changes in Korea's labour law in 2010 and a discussion on the effects of the law on bargaining rights of non‐standard workers and the incipient industry‐level bargaining. This trend towards union centralization may continue, but the notable gap between the formal bargaining structure and actual practice is expected to widen.     

The role of the ideal organization in comparative management: A cross cultural perspective of Japan & Korea

It is popular to talk of the Confucian Work Ethic when explaining the successes of Japan, Korea, Taiwan, Hong Kong and Singapore. This is not an accurate impression. The authors of this article found significant differences in management practices — both actual and ideal — between Japan and South Korea.Professors Lane Kelley, Reginald Worthley and Harry Lie are from the College of Business Administration, University of Hawaii while Professor Arthur Whatley is from the College of Business Administration & Economics, New Mexico State University.     

Wage Differentials in São Paulo's Labor Force

To explain the variation in the salaries of specialized workers in São Paulo's industries of transformation, we have used a model made up of five variables: the person's occupational preparation, the influence he may exert within the company because of his occupation, his age, his seniority in the company, and his time on the job. The data obtained for the total sample show clearly that the status of the worker within the company (occupational influence) as well as his occupational preparation and age, are powerful partial determinants of salary levels in São Paulo. On the whole, training is the most powerful of these variables because it has a strong direct effect on wages and because it has an indirect effect on wages through its impact on occupational influence level. Variables indicating experience in the company (seniority) and in the present job are almost negligible. The results suggest the presence of a modern industrial structure where one's technical preparation and position in the company are closely related and where these factors weigh far more heavily than experience on the job and in the company. Except for age, the viable variables used here are special cases of major status dimension: wealth (wages); power (occupational influence); informational status (occupatibnal preparation or education). Occupational prestige was also investigated and, in a stepwise regression, was found useless as a determinant of wages. In this research we explore, possibly for the first time, the use of a power variable, occupational influence, as a determinant of a reward variable, hourly wages. Though theoretically promising, power has previously been remarkably resistant to empirical analysis. Although our use of occupational influence has been successful, the introduction of new variables is always risky. We hope that others will conduct studies leading either to refinements in the use of this and similar indicators or to their rejection. Also, recent publications report only a small effect of most known variables on individual income differentials in the United States. Perhaps adding occupational influence might help. It is worth repeating that in the present data-set, this variable alone explains just about as much variance in hourly wages (23 per cent) as a set of 13 repressors does on job income (27 per cent) in data analyzed by Spaeth. The whole set of five variables is, of course, more effective here, with 36 per cent of the variance explained. These differences may be due to many factors. It would seem that education may be more influential in Brazil—or at least in this sample —than in the United States. Clearly, educated personnel are in shorter supply than in the United States, and the relative rewards may be greater. If this is true, the rewards for education should decrease as Brazil's education system improves. In any case, by its clear elimination of job experience and seniority, and its strong support for occupational training, occupational influence level, and age, we hope the present work may add to the growing body of evidence regarding the determinants of wage differentials, especially in Brazil and perhaps in other dynamic third world sectors.     

Skilled Immigration,Innovation, and the Wages of Native‐Born Americans

The paper examines the effects of skilled immigration on wages that can be credited to immigrants’ contribution to innovation. Using both individual and state‐level datasets from the United States, we find a significant and positive effect of immigration on wages that is attributable to skilled immigrants’ contribution to innovation. Our results confirm previous findings that immigrants contribute substantially to the host economy's innovation, which is a major driver of technological progress and productivity growth. When we augment the analysis to an immigration–innovation–wages nexus, the results suggest that as the share of skilled immigrants in a particular skill group increases, the wages of both natives and immigrants in that group also get a positive boost. We also identify evidence in favor of a positive spillover effect of skilled immigrants on a state's wage level of all workers, including those who do not directly contribute to innovation.     

Rent‐Sharing under Different Bargaining Regimes: Evidence from Linked Employer–Employee Data

Using Belgian linked employer–employee data, we examine how collective bargaining arrangements affect the relationship between firms' profitability and individual wages via rent‐sharing. In industries where agreements are usually renegotiated at firm‐level (‘decentralized industries’) wages and firm‐level profits are positively correlated regardless of the type of collective wage agreement by which the workers are covered (industry or firm). On the other hand, where firm‐level wage renegotiation is less common (‘centralized industries’), wages are only significantly related to firms' profitability for workers covered by a firm‐level collective agreement. Thus, industry‐wide contracts that are not complemented by a firm‐level collective agreement suppress the impact of firm profits on workers' wages in centralized industries.     

Wages Councils: Was There a Case for Abolition?

The 1993 Trade Union Reform and Employment Rights Act removed the remaining minimum wage protection for some 2.5 million low paid workers by abolishing the last 26 UK Wages Councils. The Government's case for abolition rested on three key arguments: (1) minimum wages do little to alleviate poverty since most covered workers do not live in poor households; (2) when in operation, minimum wages reduced employment in covered industries; (3) the problems of poverty that the wages councils were set up to deal with in 1909 are not relevant in today's labour market. In this paper we address each of these points in turn. We find that: (a) 50 per cent of families with at least one earner being paid wages council rates come from the poorest 20 per cent of families; (b) the existing evidence suggests that abolishing the Wages Councils is unlikely to create jobs; (c) the widening earnings distribution in the UK means that low pay is an increasingly important determinant of poverty. If anything, there appears to be an increasing need for minimum wage legislation in the UK.     

Oligopsonistic Cats and Dogs

This paper examines strategic investment behaviour when firms have oligopsony power in the input market. Focusing on the labour market, we study how a firm’s labour supply augmenting investment affects the equilibrium when oligopsonistic firms set wages. Relative to a non-strategic benchmark, optimal investment strategies involve boosting investment that leads rival employers to cut wages, but involves cutting back on investment that causes the latter to increase their wages. Implications of existing labour market policies for strategic investment are also discussed. Finally, the model is generalised to nest wage and employment competition and is extended to include other types of investment.     

Leadership and Its Consequences: Technical Change in the Longshore Industry

The leadership of the two U.S. longshore unions used different strategies when faced with technical change during the period 1959–89. One union used its market power to maintain membership and increase wages and benefits; the other concentrated on wages, benefits, and adjustment mechanisms. The first strategy was economically superior in the short run, but led to reduced wages and employment in the long run.     

Decentralized Wage Formation in Sweden

Recent Swedish collective bargaining agreements have incorporated provisions for local pay review talks and opportunities for individuals to negotiate their own wages. Using trade union data, we show that members who participate in local pay review talks and members who negotiate their own wages have significantly higher monthly wages than those who do not. Pay decentralization either improves an individual's bargaining position or attracts more productive trade union members. Either way, trade union wage policies to increase individual‐level wage variance are achieving their intended effects.     

Where the Grass Is Greener: Voluntary Turnover and Wage Premiums

Standard economic and compensation theories suggest that voluntary turnover should decline when a firm pays wages that are higher than those of its competitors. Turnover behavior in the State of California's Civil Service, however, does not support this prediction. Using a fixed-effects estimator to control for job-specific characteristics, I find that the wages California pays relative to those of its competitors has little or no effect on turnover. In addition, estimates of the elasticity of turnover with respect to alternative wages indicate that higher wage rates do not pay for themselves through lower turnover costs. Instead, the absolute wage level and wage growth have large effects. In other words, it appears that workers are less likely to quit jobs that pay high wages and have larger wage increases no matter how their wages compare with those paid by other employers.     

Enterprise Unions in the United States

Through a case study of a large industrial company ( TRW ) , this paper examines the history and functioning of independent local unions ( ILUs ). TRW's ILU plant wages were about the same as those at affiliated union plants and higher than those at nonunion plants. The premium explains why TRW and other companies discarded ILUs in favor of a "new" nonunion model. Yet ILUs can remedy some of the defects in that model and thus belong on the policy and research agenda