Unions and Monopoly Profits

Karier, Thomas

doi:10.2307/1928432

Cited by 86 publications

(54 citation statements)

References 4 publications

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“…Such specifications allow inferences to be made about the sources from which unions appropriate rents. Analysis in Hirsch (1990) provides no support for the hypothesis that monopoly rents associated with industry concentration and firm market share provide sources for union gains (see Clark, 1984;Salinger, 1984;Karier, 1985;and Hirsch and Connolly, 1987). Evidence provided in Hirsch (1989) suggests that unions appropriate quasi-rents associated with fixed long-lived tangible and intangible capital and engage in rent sharing of profits (and losses) associated with disequilibria and changes in demand.…”

Section: Union Effects On Profitability: Specification and Resultsmentioning

confidence: 98%

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Union Coverage and Profitability Among U.S. Firms

Hirsch¹

1991

The Review of Economics and Statistics

145

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This paper utilizes unique survey data on labor union coverage at the firm level to examine union effects on the profitability of 705 U.S. companies during the 1970s. Market value and earnings are estimated to be about 10-15 percent lower in an average unionized company than in a nonunion company, following extensive control for firm and industry characteristics. Deleterious union effects on firm profitability are sizable throughout the 1972-80 period, but vary considerably across industries. The relatively poor profit performance of unionized companies may help explain the recent decline in U.S. union membership.The author thanks the W.E. Upjohn Institute for Employment Research for financial support; Elizabeth Gregory for assistance with the union coverage survey; Zvi Griliches for providing access to the R&D Master File; Donald Deere, Terry Seaks, and anonymous referees for helpful suggestions; and seminar participants at Connecticut, Florida State, Harvard, Texas A&M, and William and Mary for comments on earlier versions of this research.1

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Section: Union Effects On Profitability: Specification and Resultsmentioning

confidence: 98%

“…1 Among the earliest and most frequently cited papers are Clark (1984), Ruback and Zimmerman (1984), Salinger (1984), Karier (1985), and Connolly et al (1986). U.S. studies are evaluated by Becker and Olson (1987) and Addison and Hirsch (1989), while Metcalf (1988) provides a survey of British studies.…”

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confidence: 99%

Union Coverage and Profitability Among U.S. Firms

Hirsch¹

1991

The Review of Economics and Statistics

145

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“…This is surprising since labor economists long have emphasized union influences on wages and productivity that in turn may affect profitability.' In recent studies, Freeman (1983) and Karier (1985) report a significant limiting influence of unions on price-cost margins in high concentration manufacturing industries. Using firm-level data and the market-based Tobin's q measure of profitability, Salinger (1984) also concludes that unions effectively capture monopoly profits associated with higher concentration.…”

Section: Introductionmentioning

confidence: 99%

Union Rent Seeking, Intangible Capital, and Market Value of the Firm

Connolly¹,

Hirsch²,

Hirschey³

1986

The Review of Economics and Statistics

270

196

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“…Influential early studies cited in What Do Unions Do? concluded that monopoly power provides the primary source for union gains, based on evidence that unions reduce profits primarily in highly concentrated industries (Freeman, 1983;Salinger, 1984;Karier, 1985). Subsequent research calls such a result into question.…”

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confidence: 99%

What Do Unions Do for Economic Performance?

Hirsch

2017

What Do Unions Do?

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. The Institute for the Study of Labor (IZA) in Bonn is a local and virtual international research center and a place of communication between science, politics and business. IZA is an independent, nonprofit limited liability company (Gesellschaft mit beschränkter Haftung) supported by Deutsche Post World Net. The center is associated with the University of Bonn and offers a stimulating research environment through its research networks, research support, and visitors and doctoral programs. IZA engages in (i) original and internationally competitive research in all fields of labor economics, (ii) development of policy concepts, and (iii) dissemination of research results and concepts to the interested public. The current research program deals with (1) mobility and flexibility of labor, (2) internationalization of labor markets, (3) welfare state and labor market, (4) labor markets in transition countries, (5) the future of labor, (6) evaluation of labor market policies and projects and (7) general labor economics. Terms of use: Documents inIZA Discussion Papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be available on the IZA website (www.iza.org) or directly from the author. This essay assesses their analysis of how unions in the U.S. private sector affect economic performance -productivity, profitability, investment, and growth. Freeman and Medoff are clearly correct that union productivity effects vary substantially across workplaces. Their conclusion that union effects are on average positive and substantial cannot be sustained, subsequent evidence suggesting an average union productivity effect near zero. Their speculation that productivity effects are larger in more competitive environments appears to hold up, although more evidence is needed. Subsequent literature continues to find unions associated with lower profitability, as noted by Freeman and Medoff. Unions are found to tax returns stemming from market power, but industry concentration is not the source of such returns. Rather, unions capture firm quasi-rents arising from long-lived tangible and intangible capital and from firm-specific advantages. Lower profits and the union tax on asset returns leads to reduced investment and, subsequently, lower employment and productivity growth. There is little evidence that unionization leads to higher rates of business failure...

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Unions and Monopoly Profits

Cited by 86 publications

References 4 publications

Union Coverage and Profitability Among U.S. Firms

Union Coverage and Profitability Among U.S. Firms

Union Rent Seeking, Intangible Capital, and Market Value of the Firm

What Do Unions Do for Economic Performance?

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