EC 380 Unions

How were unions illegal/legal before 1930s?

Before 1840, they were illegal. Between 1840s and 1930s, US law toward unions reflected the anti-union philosophy. Unions were not illegal per se, but many of their favored activities were. Also, employers had many legal tools for fighting unions

What are closed shop/union shop? Which are legal under lmra?

Closed shop - worker must be member of union before they can be hired Union shop - worker may be required to pay dues to union within certain number of days of being hired Union shop is legal

Whats the difference between craft and industrial unions?

Craft - All members do the same job Industrial Unions - Members do different jobs but all work in the same industry

The less perfect the experience rating, the more ___ the economy becomes

Cyclical

What happens to profit and prices with introduction of union in competitive industry? Non-competitive?

Decreases profit for both. In competitive, profit is always 0 in long run, so wage increases must increase price In less competitive, cost of higher union wages will be split between lower profits and higher prices

Unions (like/don't like) work share. Why?

Don't like. Layoffs are more attractive than reducing hours because of imperfect experience rating.

How does public union representation work in states?

Each state passes laws like the lMRA that govern unionization of state and local government employees in that state - Most states allow SCG unions to bargain over wages - Fewer states allow bargaining over promotion, hiring, and firing - Most states forbid most public employees from striking but this is not always enforced

The more labor demand is elastic, the _____ it is to find substitute inputs for that labor. This is why____

Easier/cheaper, means that labor demand is more elastic in the long run than short run

What is a complaint filed with union called? What are they?

Grievances, potential violation of contract

Why have public sector unions thrived?

In part because there are few substitutes for what they produce. The worry of a "competitor with lower costs" often does not apply. Higher wages are paid via higher taxes, or govt. borrowing, not prices. But they, too, must worry about the long run

Do unions lower employment? Where?

In private sector, yes. In public sector, no evidence

How has globalization affected unions?

Increased competition from foreign, non-union producers makes it harder for US employers to pay high union wages and survive

What kind of unions have been declining in strength? What kind of workers do they have?

Industrial unions (semi and unskilled workers)

What does the LMRA stand for?

Labor Management Relations Act, aka National Labor Relations Act

____ demand is ___ elastic when ___ demand is ___ elastic

Labor, output, More and more OR less and less

The more broadly the output market is defined the __ elastic is the demand for that output

Less

Union strategies in bargaining and lobbying can be understood as attempts to make the demand for the labor (more/less) elastic

Less

Unions will b e more succussful in markets and situations where the demand for their labor is (more/less) elastic

Less

How does unionization affect investment/growth?

Less investment and less growth for unionized firms

Are unions associated with political or economic action? how?

Mainly economic action. They negotiate collective bargaining and invoke threats, negotiations, and contracts. Unions can engage in some political action though

What does leveling effect refer to?

Making wages more even for low-income workers, particularly women

What can non-union v. union also be considered?

Managers discretion on all labor related matters versus the "rule of law" in the workplace governed by a contract

Labor demand is ___ elastic when labor's wages represent a ___ share of total production cost

More and Larger OR Less and Smaller

Why does supply not shift in stable industry with imperfect UI system?

No risk of unemployment - won't get fired or laid off

What is the overall goal of a union relating to wages?

Organize, and enforce uniform wage, across the entire relevant output market

____ demand is ____ elastic when there are more _____ for that output

Output, more, close substitutes

____ demand is ____ elastic in the ____ run than in the ___ run

Output, more, long, short

What are ways unions lobby against non-union producers?

Protectionism "Prevailing Wage" Laws

What was the Taft Hartley act a reaction to?

Reaction to a perception that the Wagner Act had allowed unions to become too powerful

What happens for S/D of union and nonunion sectors when union is introduced?

Shift up along the demand curve for union sectors. Wage increases but employment decreases. Decrease of employment causes increase in supply in non-union sectors, decreasing wage and increasing employment

Unions are stronger amongst (skilled/unskilled) workers

Skilled

What is the role of government in uions today?

The role of the government in the world of unions today is to make rules on how this arrangement between employers and workers happens. Decides what unions are allowed to do

What do unions do to prevent free-riding (workers who don't want to join or pay dues)?

Under the Wagner Act, they could negotiate "union security clauses" in their contracts with employers - Agree to hire only union members, and fire any who quit (closed shop) - Employer can hire anyone, but agrees to fire workers who don't join the union or pay union dues after a short period (union shop)

How do unions view minimum wage and immigration?

Union support for minimum wage increases, opposition to immigration (Also relevant to limiting the threat from non-union firms).

Why are (more/less) elastic demand curves better for unions?

Unions want to increase wages for their members. They also want to increase their membership, that is, increase employment opportunities for their members. a less elastic labor demand curve means a smaller decline in employment with wage increase.

What are the 2 phases of the LMRA? Who does the LMRA apply to?

Wagner Act of 1935, Taft Hartley Act of 1947 (significant amendment of Wagner). Covers, or applies to, private sector, non-agricultural workers, except very small business workers. (Around 2/3 of workers in US)

What is government substitution in regards to unions?

Workers now look to the government to provide much of what unions used to provide and government responds

Why are unions such an emotional issue?

Workers trying to control their lives, employers trying to control their business and life's work

Do unions lower profits? How much?

Yes but not much

Does UI system increase overall unemployment?

Yes. Economists believe that a UI system tends to increase the overall amount of unemployment in an economy, and that this tendency is stronger the less perfectly experience rated the payroll tax that finances the system

Why have Coal Miners, Manufacturing Workers Unions declined over the long run?

because their successes allowed lower-cost, non-union firms to compete in their markets.

Wage gap of union vs. non-union is (bigger/smaller) for low-wage groups like ____. How much for college educated vs HS or less?

bigger, (less-skilled, minorities, women). 6% for college educated, 17% for HS or less

Successful unions tend to be ____

centralized, national unions

Demand shifts down in stable and cyclical industries, but more in ____

cyclical

The wage gap of union vs. non-union has been (increasing/decreasing) since 1960s?

decreasing

Unions will be more successful in markets and situations where the (supply/demand) for the labor they represent is (more/less) elastic

demand, less

Demand for (unionized) labor is (more/less) elastic when the wages of the unionized labor represent a (higher/lower) share of the cost of production

less, lower

Labor demand is ___ elastic in the long run

more

What are the private sector/public sector?

• Private sector - workers work for firms that exist to make a profit (not controlled by a government) - Public sector - workers work for a government (federal, state, local)

How do workers try to improve wages and working conditions?

- Political action - improve wages and working conditions by lobbying, supporting political parties and candidates, etc/ - Economic action - improve wages and working conditions by forming asociations (labor unions) and putting economic pressure directly on their employers (strike threat)

How does unionization affect wages of workers at non-union employers? How do these change based on the size of the industry?

- Spillover effect - lowers non-union wages. Occurs more in competitive, low wage sectors - Threat effect - raise wages at non-union firms to dissuade workers from wanting unions. Occurs more in big business sectors

What do national unions do?

- Supply bargaining expertise - Coordinate bargaining so that local unions do not undercut eachother - Pool resources of all members for strikes and legal battles - Organize workers (recruit new members)

How do union contracts treat labor-saving tech or substitutes?

- Union contracts often prevent or hamper the employer's use of labor saving technologies (but the long run remains a concern) - Union contracts often require very high wages for potential substitute workers (teachers aides; seasonal workers), and have very strict job descriptions

Why might unions lower productivity?

- Unionized employers can be more choosy and get better workers - Higher union wages incentivize unionized companies to use more capital but they may use an unproductively high amoung of capital

DEF\LETE

- Unions are doing much worse in representation election (fewer elections, lower win rates). They won the easy ones early on. - Employers have gradually increased the intensity of their opposition

Why have private unions declined in US?

- Unions are doing much worse in representation elections - Employers have gradually increased intensity of their opposition - Globalization - increased competition from foreign (non-union_ producers - sectors where unions were strong shrunk steadily in importance - Structural change in US economy - Government substitution - workers now look to government to provide much of what unions used to provide and government responds - Unions have not really adapted to changing US labor force

How does Taft define union practices that were unfair?

- Unions can't discriminate against non-union workers in performing their duties - Unions can't use certain kinds of boycotts and strikes - Unions can't intimidate workers during election campaigns - Closed shop clauses illegal

Why might unions raise productivity?

- Unions give higher wages and give employees a voice, which combined reduces labor turnover, absenteeism, low morale, which are economic inefficiencies - Unions might shock inefficient employers into more efficient practices

What happens if a union gets the majority of votes in elections?

-Becomes "exclusive representative" of voting workers, meaning that the union must represent all workers who voted, and all future people in those positions, whether they supported or joined the union or not. -The contract they bargained covers all the workers they represent, and the union must handle grievances of all the workers, even if they don't join or pay dues (free-rider program)

What are the responsibilities of national unions?

-Supply bargaining expertise - Coordinate bargaining so local unions do not undercut each other - Pool resources of all members for strikes and legal battles -Organize workers (recruit new members)

What are the steps in union representation elections?

1. Cards, sign for union 2. Election is scheduled by NLRB 3. Campaign period (often leads to UFLP charges)

What were the purposes of Taft Hartley act?

1. Define union practices that were unfair 2. Protect rights of employers against unions 3. Protect rights of individual workers against unions 4. Outline procedures for strikes that create national emergency

What are the 2 main responsibilities of unions?

1. Negotiate contracts 2. Handle or deal with grievances

What are the 2 biggest threats to unions?

1. Non-union inputs that can replace them 2. Non-union competition for employers

The average union worker earns ___ more than they would in non-union job. Considering the more extensive fringe benefits, what is the gap?

10-15% more. 20-25% more.

What could employers do to employees between___ who didn't want workers in a union? What did the Wagner Act do to these rights?

1840s -1935, 1. Spies 2. Fire workers who express interest in unions (discrimination) 3. Blacklists 4. Strike breakers (replacement workers) 5. Support from government (police, army, "injunctions") Wagner took these rights away

How has the percent of private/public sector workers represented by unions changed since 1960?

1960 - more represented in private than public 1980 - more represented in public than private 2015 - more represented in public than private, very few in private

In ___, 1 of every ___ workers in American economy was part of Union. Today, it is below 1 in ___.

1960, 3, 10

How has the percent of all workers represented by union changed since 1960?

1960- 31% 1980 - 25% 2015 - 12%

There is a (smaller/bigger) wage gap of union vs. non-union in the private compared to public sector. How much for each?

20% more in private, 10% more in public

What is a company union?

A worker organization sponsored by employer

Labor demand elasticicity =

% change Emp / % change wage

What does the NLRB do?

- Can investigate/punish employers for not complying - Administers election processes

What is unfair employer interference under Wagner act?

- Coercion, interference, restraint (employers may not threaten reprisal for union support or promise benefits for opposing the union)(employer asking employee opinion on union is considered threat) - Discrimination - union supporters treated worse, because they support union, or union opponents trated better - Refusal to bargain in "good faith" over any matter relation to wages, hours, or conditions of employment - management is not allowed to make unionateral decisions about these things

What are the purposes of the Wagner Act?

- Confirmed a right of workers to form or join labor unions, without employer interference - Specifically defined illegal employer interference - Set up an election system to allow peaceful organization of workers (before act, this could be secretive or violent) - Establish agency, called the National Relations Board (NLRB) to administer the act

What are the two type of unions based on occupation representation?

- Craft - all members do the same job - Industrial - members do different jobs but all work in the same industry (make the same product)

How does taft protect rights of individual workers against unions?

- Decertification elections - States can pass "right to work" laws outlawing the "union shop" clause - Refund of dues used for political purposes

How does taft protect rights of employers against unions?

- Employers can say anything as long as there is not a threat of reprisal or promise of benefit. Any factual information is protected (free speech) - Captive meetings permitted - Supervisory employees, managers and foremen, have no protected right to unionize - Employers can use lockouts as strategic move in negotiations - Employers may hire replacement workers during strikes, and offer permanent positions (strikers must be put on a preferential hiring list) (this seldom happens because it creates low morale in workplace)

How are federal government worker unionization rights created?

- Fed workers organize through elections - They are not allowed to strike - They may not bargain over pay - congress sets pay for all federal workers - May not bargain over promotion, job assignment rules - that is determined by civil service law - May not have union security clauses in contracts

What happens if the union loses the elction?

- If the employer is not found to have comitted unfair labor practices, the union may not try again for 1 year - If the employer is found to have committed UFLP, and they are considered serious enough, the election will be run again. If there is extreme unfairness, the union will be declared the winner

What are the main 5 unfair labor practices employers can't engage in per the LMRA?

- Interfering with an employee exercising Sec. 8 rights, like organizing for collective bargaining - Providing assistance to a labor organization - Discriminating against an employee engaged in union activities - Discriminating against an employee for bringing a case to NLRB - Refusing to bargain in good faith with duly certified union