Collective Bargaining

Posted: October 17th, 2013

Collective Bargaining

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Collective Bargaining

Numerous studies have been made on the effect of labor unions on workers. Economists are of the opinion that there exists a gap in the average union wage, which is estimated to be about 15 percent. In addition, the effect of unionism on wages of the member’s has been on the decline on an annual basis. In addition the average estimation on the existing union gap indicate that the average estimates do not explain for the measurement problems that arise in data which shows a precedent in bias towards large union gap estimates(Lewis, 2003).

The first problem in measuring the relative effect of union wages is misclassification error on data when reporting union statuses. The preceding source of downward bias is the imputation process. Economists are of the opinion that the choice to join a union depends on the gains that might be accrued from union membership (Terry, 2002). Moreover, the costs of living by the laborers also dictate the effects of the wages that are diverted to the unions. Hence, during inflation laborers are not able to divert adequate cash to their unions such that the effects of unionism are decreased by such economic conditions. The differences in data have resulted in doubts about the effect of unionism on wages of workers who are members to a union (Terry, 2002).

This is because there is a difference in estimates on the effect of unionism on wages has been because of the dependency on an accuracy model that emphasizes that labor quality and unionism have a relationship that determines the level of wages by the quality of labor, which in turn affects the chance of unionism (Lewis, 2003). Thus the measured relative wage effect does not provide a clear illustration of the real effect of unionism on wages of laborers because wages gaps are decreasing and others increasing annually because of varying economical conditions in regions. In addition, errors accrued to miscalculation have altered the results that would have been arrived at, which would have given a clearer illustration of the effects of unionism on wages of laborers. (350 Words)

References

Lewis, H. G. (2003). Unionism and relative wages in the United States: An empirical inquiry. Chicago: University of Chicago Press.

Terry, M. (2002). Redefining public sector unionism: UNISON and the future of trade unions. London: Routledge