UNIONISM COMES TO THE PUBLIC SECTOR
Richard B. Freenan
Paper No. 1452
NATIONAL BUREAU OF ECONOMIC RESEARCH 1050 Massachusetts Avenue Cambridge, MA 02138 September 1984
The research reported here is part of the NBER 's research program in Labor Studies and project in Government Budget. Any opinions expressed are those of the author and not those of the National Bureau of Economic Research.
NBER Working Paper #1452 September 1984
Unionism Comes to the Public Sector
This paper argues that public sector labor relations is best understood in a framework that focuses on unions ' ability to shift demand curves rather than
to raise wages, as is the case in the private sector. It reviews the public sector labor relations literature and finds that: (i) public sector unionism has flourished as a result of changes in laws; (2) the effects of public sector unions on wages are likely to have been underestimated; (3) public sector unions have a somewhat different effect on wage structures than do private sector
unions; () compulsory arbitration reduces strikes with no clearcut impact on the level of wage settlements; (5) public sector unions have diverse effects on non—wage outcomes as do private sector unions.
In terms of evaluating public sector unionism, the paper argues that by raising both the cost of '
services (taxes) and the amount of services
sector unionism involves a different welfare calculus than private sector
Richard B. Freeman National Bureau of Economic Research 1050 Massachusetts Avenue Cambridge, MA 02138
I. INTRODUCTION AND SUMMARY
the 1950s only a small minority of public sector workers were
organized and even AFL—CIO President George Meany believed "It is impossible to
bargain collectively with the government."1vjrtually no states had laws permitting collective bargaining for public employees. Strikes were
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