State of the union
Employment and unemployment effects of unions
An examination of the effect of unions on the aggregate level of employment in the economy.
Union behavior, industry rents, and optimal policies
This paper examines the welfare gains from strategic trade and industrial policy in the U.S. steel industry, focusing particularly on the potential gains from capturing labor rents. I take into account product market distortions such as price-setting firms, factor market distortions in the form of union-created labor rents, and the presence of fixed capital and underutilized capacity in U.S. steel production. ; The existence of underutilized capacity means that firms respond to protection by reducing the share of labor in production, eliminating the rents targeted by the policy and thus ...
Trade and wages: choosing among alternative explanations
North-South trade competition cannot be an explanation for the adverse trend for U.S. unskilled wages. If wage competition in these industries from abroad pushed down wages, then prices of these goods should also have gone down, and they have not. Also VERs and anti-dumping measures have protected exactly the wage earners supposedly threatened.
Union concessions in the 1980s
A theory of outsourcing and wage decline
We develop a theory of outsourcing in which there is market power in one factor market (labor) and no market power in a second factor market (capital). There are two intermediate goods: one labor-intensive and the other capital-intensive. We show there is always outsourcing in the market allocation when a friction limiting outsourcing is not too big. The key factor underlying the result is that labor demand is more elastic, the greater the labor share. Integrated plants pay higher wages than the specialist producers of labor-intensive intermediates. We derive conditions under which there are ...
Many unions in the United States have for several years engaged in what is known as pattern bargaining?a union determines a sequence for negotiations with firms within an industry where the agreement with the first firm becomes the take-it-or-leave-it offer by the union for all subsequent negotiations. In this paper, we show that pattern bargaining is preferred by a union to both simultaneous industrywide negotiations and sequential negotiations without a pattern. In recent years, unions have increasingly moved away from patterns that equalized wage rates across firms when these patterns did ...
Collective bargaining and disinflation
A discussion of wage behavior over the business cycle and of the effect of deferred wage increases, cost-of-living adjustments, and current settlements on labor union rates, using the auto industry as an example.