The Effect of the Union Wage Differential on Management Opposition and Union Organizing Success

14 Pages Posted: 7 Jul 2004 Last revised: 13 Oct 2022

See all articles by Richard B. Freeman

Richard B. Freeman

National Bureau of Economic Research (NBER); University of Edinburgh - School of Social and Political Studies; Harvard University; London School of Economics & Political Science (LSE) - Centre for Economic Performance (CEP)

Date Written: October 1985

Abstract

This paper argues that under current U.S. institutional arrangements, in which managements opposition to unions is as important as workers and unions,the magnitude of the union wage premium actually reduces organization rather than increasing it. It reduces organizing success by lowering profits, thus giving management a greater incentive to oppose unions. It shows that in the traditional monopoly model, any given premium can cause management to donate more resources to opposing a union than workers will donate to organizing. Empirical evidence from NLRB elections supports the model in which larger premiums induce greater opposition and thus reduce union organizing success.

Suggested Citation

Freeman, Richard B., The Effect of the Union Wage Differential on Management Opposition and Union Organizing Success (October 1985). NBER Working Paper No. w1748, Available at SSRN: https://ssrn.com/abstract=338809

Richard B. Freeman (Contact Author)

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States
617-868-3900 (Phone)
617-868-2742 (Fax)

University of Edinburgh - School of Social and Political Studies ( email )

Adam Ferguson Building
George Square
Edinburgh EH8 9LL
United Kingdom

Harvard University ( email )

Littauer Center
Cambridge, MA 02138
United States
617-868-3900 (Phone)

London School of Economics & Political Science (LSE) - Centre for Economic Performance (CEP) ( email )

Houghton Street
London WC2A 2AE