Wage Share, Market Power and Unionism: Some Contrary U.S. Evidence *

Brush, Brian C.; Crane, Steven E

doi:10.1111/j.1467-9957.1984.tb00794.x

Cited by 7 publications

(6 citation statements)

References 5 publications

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“…In the U.S., Brush and Crane (1984) find no support for a positive relationship between unionization and labor's share of income. Using data from the U.S. Census of Manufactures at a four-digit SIC level, they define labor's share by multiplying the wages of production workers by the ratio of total labor costs to payroll (in order to adjust…”

Section: Do Unions Affect Labor's Share Of Incomementioning

confidence: 75%

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Do Unions Affect Labor's Share of Income: Evidence Using Panel Data

Fichtenbaum

2011

American Journal of Economics and Sociology

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Section: Do Unions Affect Labor's Share Of Incomementioning

confidence: 75%

“…This group includes studies by Cowling and Molho (1982), Conyon (1994), Hollander (1982), Droucopoulos and Lianos (1992), Brush and Crane (1984), Henley (1987), andMacPherson (1990).…”

Section: Do Unions Affect Labor's Share Of Incomementioning

confidence: 97%

Do Unions Affect Labor's Share of Income: Evidence Using Panel Data

Fichtenbaum

2011

American Journal of Economics and Sociology

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“…The danger in this is that the form of the estimating equation incorporates a crude form of the neoclassical production function which is at variance with the short-run monopoly mark-up pricing hypothesis at the core of the C-M/Kalecki/Weintraub models. However an observed negative relationship between wage share and capital intensity is not inconsistent with this theory but would arise because of the relationship between the All variables ddined as, and from same sources as, Brush and Crane (1984). lcvei of overheads and the degree of monopoly.…”

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confidence: 88%

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confidence: 99%

Wage Share, Market Power and Unionism: A Reply to Brush and Crane

Henley

1986

The Manchester School

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In a recent paper in this journal Brush and Crane (1984) presented empirical results on the relationships between wage share, market power and unionism in the United States using a cross-section of 4-digit industries for 1967. On the basis of these findings they sought to question the validity of the Cowling and Molho (C-M) model of the determination of wage share (Cowling and Molho, 1982). This reply uses the data base of Brush and Crane (hereafter B-C) and raises two points about their results. First, in their estimating equation B-C include the capital-labour ratio a3 a measure of capital intensity as one of their explanatory variables. We find that alternative treatment of capital intensity gives different results and suggest that capital intensity is not a significant explanatory variable of wage share. The negative rela tionship observed by B-C may be spurious since their measure of capital intensity includes a measure of the labour input in its denominator. Secondly, there are shortcomings in B-C's data. We call into doubt their division of the sample into producer and consumer goods industries and also question their use of 3-digit level unionization data in a &digit sample of industries.The theoretical link between capital intensity and wage share that B-C discuss deserves further elaboration. C-M include the ratio of investment to value added in some of the regressions they reported in an attempt to forestall criticism that a spurious relationship between wage share and concentration arises because concentrated industries tend to be more capital intensive. The danger in this is that the form of the estimating equation incorporates a crude form of the neoclassical production function which is at variance with the short-run monopoly mark-up pricing hypothesis at the core of the C-M/Kalecki/Weintraub models. However an observed negative relationship between wage share and capital intensity is not inconsistent with this theory but would arise because of the relationship between the 'Manuacript received 29.3.85; final version received 21.8.85. 104

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“…Our result provides support to the negative (or mixed) unionization‐labor income share nexus in the empirical literature. The negative (or mixed) relationship between unionization and labor income shares can be found in time‐series studies (Kalleberg et al, 1984), inter‐industry studies using cross‐sectional data (Brush & Crane, 1984; Conyon, 1994), and cross‐country studies using panel data (Bentolila & Saint‐Paul, 2003; Carter, 2007).…”

Section: Introductionmentioning

confidence: 99%

(De)unionization, trade, unemployment, and wage differentials

Chang

Hung

Peng

2023

Southern Economic Journal

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This research examines the interaction of (de)unionization and trade liberalization in shaping firm productivity, market structure, trade flows, unemployment, and functional distribution (changes in the wage difference and labor income share). It introduces unemployment to the Melitz‐Ottaviano model by considering unionism in the differentiated manufacturing sector and searching frictions in the homogeneous service sector. It shows that unionization has a selection‐softening effect, leading to a non‐monotonic relationship between unionization and the number of firms and unemployment. With international trade, a unilateral increase in the degree of unionization in one country gives rise to a selection‐softening effect for domestic‐only firms and a selection‐toughening effect for exporting firms in this country, resulting in unemployment being more likely to increase relative to autarky. If openness to trade is relatively low (high), then the average wage difference for this country compared to its trading partner country rises (declines). Trade liberalization does not necessarily reduce unemployment, and depends on the relative degree of unionization between the two trading countries. In sharp contrast to the conventional notion, de‐unionization can increase, rather than decrease, the labor income share of unionized workers, provided that openness to trade is sufficiently high.

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Wage Share, Market Power and Unionism: Some Contrary U.S. Evidence *

Cited by 7 publications

References 5 publications

Do Unions Affect Labor's Share of Income: Evidence Using Panel Data

Do Unions Affect Labor's Share of Income: Evidence Using Panel Data

Wage Share, Market Power and Unionism: A Reply to Brush and Crane

(De)unionization, trade, unemployment, and wage differentials

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