Unions and the Sword of Justice: Unions and Pay Systems, Pay Inequality, Pay Discrimination and Low Pay

Abstract

Dispersion in pay is lower among union members than among non-unionists. This reflects two factors. First, union members and jobs are more homogeneous than their non-union counterparts. Second, union wage policies within and across firms lower pay dispersion. Unions' minimum wage targets also truncate the lower tail of the union distribution. There are two major consequences of these egalitarian union wage policies. First, the return to human capital is lower in firms which recognise unions than in the unorganised sector. Second, unions compress the wage structure by gender, race and occupation.

A Multilevel Analysis of the Use of Individual Pay-for-Performance Systems

“…While firms may attempt to circumvent these legal requirements (Bormann, 2007), I-PFP may be difficult or impossible to apply where unions have an active presence. Typically, labor union wage policies within and across firms have an egalitarian focus, which leads to significant resistance to individualized performance-related pay approaches, compressing the wage structure (Metcalf, Hansen, & Charlwood, 2001). Even in the quite different case of the countries of the former Soviet Union, coercive influences by labor unions on employers may be present within individual firms.…”

Spillover effects of unionisation on non-members' wellbeing

“…The puzzle stems from the expectation that unions should in general enhance members' job satisfaction and wellbeing. A number of influential studies have established a link between unions and a pay premium and/or lower pay inequality (see, for example, Freeman 1980, Booth 1995, Gosling and Machin 1995, Clark and Oswald 1996, Card 1996, Card et al 2003, Budd and Na 2000, Metcalf et al 2001, Hirsch 2004, Blanchflower and Bryson 2004. Unions have also been linked to a number of other welfare improving changes for members, which include access to employer provided training (Booth 1991, Acemoglu et al 2001, Booth et al 2003, Waddoups 2012, risk sharing (Malcomson 1983), health insurance and pension plans (Buchmueller et al 2002), workplace and occupational health and safety (Donado and Walde 2012), family friendly policies (Budd and Mumford 2004), and curbing discrimination (Phanindra and Peled 1999).…”

Collective Bargaining and Workplace Performance: An Investigation Using the Workplace Employee Relations Survey 1998

“…If so, it is possible to infer that the employee is covered by collective bargaining. 40 Using data from the Autumn 1998 Labour Force Survey, Metcalf et al (2000) estimate that around four-fifths of union members and one in seven non-members have their pay determined by collective bargaining. 41 The sample is drawn from a nationally representative sample of adults in Britain.…”