How trade unions increase welfare

Abstract

Historically, worker movements have played a crucial role in making workplaces safer. Firms traditionally oppose better health standards. According to our interpretation, workplace safety is costly for …rms but increases the average health of workers and thereby the aggregate labour supply. A laissez-faire approach in which …rms set safety standards is suboptimal as workers are not fully informed of health risks associated with jobs. Safety standards set by better-informed trade unions are output and welfare increasing.JEL codes: J 51, J 81

What Is Managerialism?

“…The general acceptance of managerialism has been combined with the decline of pluralism and the creation of what philosopher Herbert Marcuse (1966) called one-dimensionality. Managerialism’s one-dimensionality was, for example, shown in the initial collusion of big business and weakened labor with the subsequent exclusion of organized labor eliminating one of managerialism’s most dangerous opponents (Donado and Walde, 2012). With this, it eliminated an alternative voice in economic and managerial affairs leaving one-dimensionality behind.…”

Why Do Unionized Workers Have More Nonfatal Occupational Injuries?

“…In the theoretical literature, s is always set by the firm or regulated by the government. however, since unions are often at the origin of many safety measures, we can instead let s be the outcome of a bargained agreement between the firm and the labor union or be a safety standard imposed by regulation due to unions' influence (see Donado and Wälde 2012). Also suppose that e depends on s since it is usually firms that first choose the level of safety measures and then workers that react by choosing how much precautionary effort to provide.…”

Spillover effects of unionisation on non-members' wellbeing

“…Instead, they tend to provide public goods thus extending the benefits they confer on members to covered nonmembers too. In a recent paper Donado and Walde (2012) show this to be the case with respect to health and safety provisions at work. The law also prevents employers from discriminating on grounds of union membership.…”

“…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). More generally, unions uphold members' interest in collective bargaining on issues such as transfers, promotions and grievances, among others, in the spirit of Freeman and Medoff (1984)'s "collective voice".…”