The Effect of the Union Wage Differential on Management Opposition and Union Organizing Success
NBER Working Paper No. 1748
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.
Published: Freeman, Richard B."The Effect of the Union Wage Differential on Management Opposition and Union Organizing Success," American Economic Review, May 1986.