Public Sector Union

Powerful Essays
NBER WORKING PAPER SERIES

UNIONISM COMES TO THE PUBLIC SECTOR

Richard B. Freenan

Working

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
ABSTRACT
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 '

public

services (taxes) and the amount of services

public

sector unionism involves a different welfare calculus than private sector

unionism.

Richard B. Freeman National Bureau of Economic Research 1050 Massachusetts Avenue Cambridge, MA 02138

I. INTRODUCTION AND SUMMARY

In

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



References: Ashenfelter, 0. and E.G. Ehrenberg, "The Demand for Labor in the Public Sector," in Labor in Public and Nonprofit Sectors, D.S. Hamermesh, ed., New Jersey: Princeton University Press, 1975. Aussieker, B., "The Incidence and Impact of Faculty Union Strikes," Labor Law Journal, 1977, pp. 777—7814. Baird, Robert N. and John H. Landon, "Communication: The Effects of Collective Bargaining on Public School Teachers ' Salaries," Industrial and Labor Relations Review, Vol. 25, (3), April 1972, pp. 1410—1417. Becker, E.B., "Union Impact on Wages and Fringe Benefits of Hospital Nonprofessionals," Quarterly Review of Economics and Business, Vol. 19(14), 1979, pp Bellante, D. and J. Long, "The Political Econoxtr of the Rent—Seeking Society: The Case of Public Employees and Their Unions," Journal of Labor Research, Vol. 2(1), 1981, pp. 1—114. Brock, J. Bargaining Beyond Impasse, Joint Resolution of Public Sector Labor Disputes, Boston: Auburn House Publishing Co., 1982. Carpenter, R.E. and D.N. Ashworth, "An Examination of Personnel Practices in Mississippi Municipalities," Journal of Collective Negotiations, Vol. 11(3), 1982, pp. 267—273. Chambers, J.G., "The Impact of Collective Bargaining for Teachers on Resource Allocation in Public School Districts," Journal of Urban Economics, Vol. 14, 1977, pp Cook, A.H., "Comparable Worth: Recent Developments in Selected States," Industrial Relations Research Association, Spring Meeting 1983, pp. 4914_ 503. Donn, C.B., "Games Final—Offer Arbitrators Might Pay," Industrial Relations, Vol. 16(3), 1977, pp. 306—3114. Douglas, J.M., "Injunctions Under New York 's Taylor Law: An Occupational Analysis," Journal of Collective Negotiations, Vol. 10 (3), 1981, pp.

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