The effect of unions on productivity: An analysis of the cattle kill floor

Abstract

Cattle kill floor operations were analyzed using sample data to determine the impacts of unionism on productivity at the plant level. No significant union effect either negative or positive was found, possibly because of the limited union role in setting wages and the wide variation in personnel practices irrespective of the union status of the plants. Large productivity differences observed among the sample firms require other explanations.Relatively few productivity-oriented studies of the non-farm labor component of the food industry have been conducted, even though non-farm labor costs accounted for 32 cents of the US retail food dollar in 1982.' Food processing and distribution provide particularly fertile area for productivity research, as these activities in 1982, for example, contributed almost four times the value added and payroll as production agriculture. In fact, the relative labor intensity of food processing and distribution prompted Polopolus to note ". . . one of the major areas of concern of the [agricultural economics] profession should be personnel management and labor relations".* One of the most labor intensive and economically important food processing sectors is meat packing. In 1983, the industry had a wage bill of $5 billion on total sales of $50 billion. Wages and benefits are the major component of the gross margin.3 The productivity and efficiency of livestock slaughter have been the focus of a number of Time-and-motion studies have been used to estimate technical efficiency and labor requirements, and efforts have been made to identify problem areas affecting slaughter efficiency.Recently, however, issues other than technical efficiency have risen in importance as the sector has experienced rapid organizational change over the past decade. From a relatively unconcentrated but heavily unionized industry, meat packing evolved into a moderately concentrated and less unionized one. At the