Economics of Labor Unions

1
Economics of Labor Unions

• I. Labor unions what they are
• A. A cartel, not a monopoly
• B. Control over supply varies
• C. Goal higher than market wagesalso,
• control over work rules, conditions, job
• preservation, fringe benefits
• D. Types of unions craft, industrial,
  Federation
• E. Governance Locals and internationals

2
Economics of Labor Unions

• II. Labor unions what they do
• A. Bargaining vs. unilateral determination
• B. Restricting supply of labor
• C. Restricting output work rules and the
• competition of substitutes.

3
Economics of Labor Unions

• II. Labor unions what they do (contd.)
• D. Increasing demand for labor
• 1. Job preservation vs. subcontracting
• 2. Manipulating product demand
• 3. Seeking market regulation
• E. Overall wage effects maybe a 15 gain,
• but varies with business cycle and
• employment fluctuations.

4
Economics of Labor Unions

• III. Some perspectives
• A. Unions and skills
• B. Unions and flexibility
• C. Unions and the extent of competition
• D. How important are unions?
• 1. The ebb and flow of membership
• 2. As part of industrial governance
• 3. As part of the political system