Economics of Labor Unions

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Presentation transcript:

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 wages—also, control over work rules, conditions, job preservation, fringe benefits D. Types of unions: craft, industrial, Federation E. Governance: Locals and internationals

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.

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.

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