Tyler Cowen has discovered a paper by John DiNardo and David Lee arguing that unions don't actually raise wages, change productivity, change the number of widgets constructed, or increase the chances that the company will go out of business. In other words, they do nothing, in either direction. Which is odd, given how vociferously employers resist them.
This paper, of course, flies in the face of most all other evidence. It flies in the face of what Tyler believed yesterday. And, sorry to say it, I don't buy it. For instance, a recent study on union impacts on the hotel industry found that "In 2000, overall unionized hotel workers in metropolitan areas earned 17 percent more per hour than non-unionized workers. If we narrow the scope to front-line workers (the focus of our study), the union wage effect grows even larger, to 30 percent...It is also noteworthy that the union’s wage effect is strongest for the lowest paid occupations. Janitors and food preparers stand to gain the most from representation, with a national union wage premium of 39.5% and 36.0% in 2000, respectively. For bartenders and baggage porters, who earn significantly more, the premium was 19.1 and 19.4%, respectively." So let me say this clearly: I think the study Tyler is citing is wrong.
But let's assume I did buy it. Tyler wants to know how a union-supporter would respond, and I'd suggest it's with a shrug. There's a sad miscomprehension in the larger political discourse that the primary purpose of labor unions is to demand higher wages and more expansive benefits. This is not true. The enduringly important role of unions -- wage increases or none -- is to give workers a voice in their company, and to imbue that voice with the power to force change. So 90% of what a union does is not bargain for better health care, it's file grievance claims on behalf of its workers. They demand better treatment, safer machinery, family-friendly scheduling, and equitable hiring. And they fight in the other direction as well, giving workers who may otherwise be ignored a channel through which to advocate for process improvements that would otherwise go unheard. Their day-to-day role is to give workers a voice in the workplace, and that remains even if they could never secure another wage increase again.
