Card, Lemieux and Riddell argue in their 2002 paper “Unions and Wage Structure” that: They estimate that in 1981, the presence of unions reduced the variance of male wages by 6 percent in the US and 10 per cent in Canada. The corresponding estimates in 1988 are 3 per cent in the US and 13 per cent in Canada. Thus, they estimate that changing unionization patterns contributed to the rise in US wage inequality in the 1980s, but worked in the opposite direction in Canada (20). This conclusion was brought by a combination of model application and literature review, and since unions are a massive force in the US as well as other countries, like Canada and the UK, it is important to determine how this result is possible. Using the theory developed around the topic of unionization, it may be prudent to use such factors as objective function, bargaining range, Rubenstein bargaining, all of which have a large impact on both the level of unionization in a society and effect on wage implications. In addition, the union to non-union factors of the subject have a high impact on the result of the study, indicating that a negative change in unionization participation has contributed to a rise in wage inequality across the private sector, both union and non-union. After a lengthy literature review on the subject, Card and his colleagues argue that “As this discussion [literature review] makes clear, the impact of unions on the structure of relative wages depends on both which types of workers tend to be unionized and on how union relative wage impacts vary across different groups of workers (Card, Lemieux & Riddell, 7).” This means that the demographics of workers in unions and how union wages impact these varying groups is significant, includ... ... middle of paper ... ...ng interest in unions of males over 30 in the United States, however, this equilibrium is fading quickly. Rather, the proportion of union to non-union wages follows more of a reduced form equilibrium model. From the above analysis of Card, Lemieux and Riddell’s work, union theory studied in this course and the work of other noted economists on the subject of unions, it is apparent that not only is the argument Card and his colleagues make plausible, but likely a fact. From the bargaining power of unions and the application of the objective function to explain why the “male over 30” demographic is waning in interest in unions to the application of models to determine if this change could indeed create a rising inequality in wages throughout the sector, it is clear that the potential for such a theory to be successfully applied using models and theories is likely.
As companies look to expand operations and hire new employees, many economic and environmental factors are taken into consideration. The cost of labor is one of the primary concerns as labor generally constitutes a large part of company budgets. The organization of labor by unions further increases this concern. The wages of unionized workers are significantly higher than the wages of nonunion workers in almost every industry (Fossum, 2012). Higher wages generally result in reduced company profits, lower share prices, and reduced shareholder returns (Fossum, 2012). Unionization also reduces the employer’s flexibility with regards to hiring, transferring, or promoting employees (Fossum, 2012). Productivity may be negatively impacted by unionization because merit is often eliminated as a criterion for wage increases or promotions (Fossum, 2012). As a result of these negative impacts, employers are motivated to oppose unionization.
The union labor movement blossomed early in the century, as membership grew from 2.0 million members in 1910 to 18.0 million members in 1953. However, by 1980 membership was only slightly higher at 20.0 million members. During that time, membership growth was relatively consistent in that it never really declined a significant amount. After 1980, union membership began to decline sharply. In 1985 membership was already back down to 18 million members and by 1990, the number of union members was hovering near 16 million members. As a percentage of the total employment in the economy, unions grew from only 13% in 1935 to 32% in 1953 and have fallen steadily since 1955. In 1980, labor union roles had decreased to 23% and by 1990, the figure had shrunk ev...
Wallerstein, M. & Western, B. 2000. Unions in Decline? What Has Changed and Why? Annual Review of Political Science. 3: 355-377.
Unions have always been a pain in employers’ sides. From today to the 1910s, workers have tried to unionize for better conditions in their jobs. Today, people try to opt out of being in unions, avoiding the union’s dues but still reaping the rewards. That’s a long way away from what people experienced in the 1910s. During that time period, people were struggling to even be apart of a union.
... of Labor Unions in Labor Markets. In R. C. Free (Ed.), 21st Century Reference Series. 21st Century Economics (Vol. 1, pp. 163-172). Thousand Oaks, CA: Sage Reference. Retrieved from http://go.galegroup.com.library3.webster.edu/ps/i.do?id=GALE%7CCX1700400026&v=2.1&u=edenweb_main&it=r&p=GVRL&sw=w
Members of organized labor and Unions sacrificed much in the strive for higher wages. Workers were paid very poorly and did not make enough money to fully support themselves and their families. For example in modern times, citizens in New York City hold protests to raise hourly wages to a minimum of fifteen dollars an hour. Throughout time Union and labor workers have been paid poorly. Document A clearly shows evidence that although efforts were made, hours and wages were not changing as they should of been. Although the impact to change hour and wages didn't Chanel as much, it does not mean a great deal of effort was not made.
Union representation and collective bargaining has a long history of benefiting not only union members directly but the general workforce regardless of union affiliation. Employers adopt union pay rates and similar benefits to discourage their workers from seeking official representation as seen by paid brakes being the standard throughout “The positive, equalizing impacts of unions on wages spill over to lower-paid, non-union workers in communities with high levels of unionization” (Broadbent). The C.D. Howe Institute describes “Strikes, lockouts, and other outcomes of employer-employee negotiations, however, affect not just unionized employees – about one in three working Canadians- but reverberate well beyond the negotiating parties”(Dachis and Hebdon, 2010, p.
The 1930-50’s golden era of organized labor is over and has lost the energy it had once had as a unifying factor in the lives of workers in the U.S. There are many factors to this decline, but image is very influential in the creation and influence of unions in two ways: externally and internally. Externally, the union’s ideology and actions attract workers into becoming members of a union and how government responds to a union’s beliefs and actions. Internally, union’s are run democratically, where workers choose who will represent them in negotiations with employers, which should give some benefits to the majority of the workers in the union. Organized crime's infiltration into labor unions has rotted the image of unions who represent workers looking to defend themselves against employers and achieve a stable livelihood. The history of labor and organized crime are undoubtedly linked because at times they would use each other to further their own means: the most famous of these links would have to be on James Hoffa. Organized crime and corrupt union officials influence on unions will still exists and although crackdowns throughout the decades have made some progress I doubt that they will be removed entirely from labor.
The wage gap is a major issue that is constantly brought up in the work place. Numerous people use the term “wage gap” to state how gender can affect somebody 's income. There has always been an understanding that men typically made more money than women. For a long time, women were not allowed to work; therefore men were in charge of “bringing home the bacon”. However, times have changed and there are various situations where a household is centered off a women’s’ income. Females can become single mothers who have a responsibility to care for a child(s). Responsibilities can include monthly payments of water and electric bills and even weekly payments towards groceries. Women have to acquire enough money so that they are able
Unions have an extensive history of standing up for workers. They have advocated rights of steelworkers, coal miners, clothing factory employees, teachers, health care workers, and many others. The labor movement is based on the idea that organized workers as a group have more power than individuals would have on their own. The key purpose of any union is to negotiate contracts, making sure workers are respected and fairly compensated for their work. “In theory” unions are democratic organizations, resulting in varying inner authority. Workers look for security within a job a...
Women are more than half the work force and are graduating at higher rates then men and continue to earn considerably less then men. There are several contributing factors to the gender wage gap. Women experience gender discrimination in the work force even though it’s been illegal since the Equal Pay Act in 1963. One of the challenges for women is uncovering discrimination. There is a lack of transparency in earnings because employees are either contractually prohibited or it’s strongly discouraged from being discussed. Discrimination also occurs in the restricting of women’s access to jobs with the highest commission payments, or access to lucrative clients.
However, in the 21st century, discrimination is a severe issue and is not accepted by society. Therefore, discrimination is becoming less and less common, since judgments based on race or gender has become frowned upon. Also, workers have formed multiple unions by surpassing discriminations. In the United States, 14.5 million wageworkers are members of a labor union. These unions pursue better collective working conditions and have succeeded at increasing wages for their
This has been the norm of unions for years now. They seem to provide only enough training to get by, or no training at all. Unions were unprepared when globalization hit in the 1980’s. Now in the 21st century they still are not prepared. Unions tend to think there are limited resources on subjects that affect unions, or have no knowledge of how or where to obtain the resources, or even accomplish the task of training. Some even think education and training is a waste of money. Money, which they think should be used to feed organizing and the political candidates.
Income inequality continues to increase in today’s world, especially in the United States. Income inequality means the unequal distribution between individuals’ assets, wealth, or income. In the Twilight of the Elites, Christopher Hayes, a liberal journalist, states the inequality gap between the rich and the poor are increasing widening, and there need to have things done - tax the rich, provide better education - in order to shortening the inequality gap. America is a meritocratic country, which means that everybody has equal opportunity to be successful regardless of their class privileges or wealth. However, equality of opportunity does not equal equality of outcomes. People are having more opportunities to find a better job, but their incomes are a lot less compared to the top ten percent rich people. In this way, the poor people will never climb up the ladder to high status and become millionaires. Therefore, the government needs to increase all the tax rates on rich people in order to reduce income inequality.
The laws and regulations surrounding Industrial Relations since the 1900’s have, at each reform, placed tighter constraints on the amount of power unions are able to exert. The reforms have also radically increased managerial prerogative, through an increased use of individual bargaining, contracts and restrictions imposed on unions (Bray and Waring, 2006). Bray and W...