Unions Without Wage Bargaining

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.

So, for instance, they would never allow this scheduling program to enter implementation at Wal-Mart because, while it's good for the company's bottom line, it eliminates regularity in employee work schedules and "alerts managers when a worker is approaching full-time status or overtime, which would require higher wages and benefits, so they can scale back that person's schedule." Or they'll fight endlessly, as they did in Las Vegas, to force fair promotions. In Vegas, young, pretty cocktail waitresses got to serve all the high roller tables. If you were a waitress who'd been working for a few years and had a crow's foot or two, you were consigned to the cheap tables which, of course, are far less lucrative. As Nathan Newman eloquently puts it:

That is what unions get you-- the right not to be told you are too old to be presentable in public. The right not to have a supervisor play favoritism and demand you degrade yourself in order to feed your family.

In unionized casinos, a rich high-roller can buy himself the fanciest penthouse in the hotel. He can buy the fanciest food. He can buy almost anything.

But when he sits at the craps table, the one thing he can't buy is that the woman serving his drinks be replaced by the youngest girl in the house.

'Cause in a union shop, human dignity is not for sale.

No effect on wages there, of course. Only on the lives of workers, the ability of these women to create a career out of their jobs, and their capacity to secure dignity and respect at their workplace. And that's not even getting into what unions do for workplace safety, and the catastrophes that mount in their absence. So, in answer to Tyler's question, even if it came true that unions could never eke out another wage increase, I'd still support them ferociously. Workers need a voice -- and a fist -- in the workplace.

And, lastly, here's my question for Tyler: Given that you now believe data showing that unions don't close businesses, change wages, or do much of anything else, why not warm my heart and start supporting them? And better yet, start explaining to employers that they should support them? After all, if there's no downside, surely all this opposition is simply a misguided farce that could be easily swept away...