WHAT DO UNIONS DO? by Richard B. & James L. Medoff Freeman
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What unions do, according to this new quantitative analysis, is more good than harm: ""in the economic sphere, unions reduce wage inequality, increase industrial democracy, and often raise productivity, while in the political sphere, unions are an important voice for some of our society's weakest and most vulnerable groups, as well as for their own members."" Freeman and Medoff are two Harvard economists, also affiliated with the National Bureau of Economic Research, who are very much aware of today's anti-union sentiment. Hence their inclusion of nonwage as well as wage effects; their evaluation of unions as institutions with ""two faces"": ""a monopoly face, associated with their monopolistic power to raise wages, and a collective voice/institutional response face, associated with their representation of organized workers within enterprises."" The text is eminently quotable because it is clear, direct, systematic--and, in the main, unflinching. Freeman and Medoff acknowledge an ""inefficient"" union wage differential (reduced, of late, by givebacks)--but peg its cost at not more than .2 to .4 percent of GNP. Subsequently, they study how ""union voice"" (wages being equal) reduces the quit rate--and arrive at a .2 to .3 percent GNP increase. (Nonunion firms can indeed introduce grievance procedures too--but only by giving up power.) Why, then, do unionized workers express greater dissatisfaction about their working conditions? The habit, as in a democracy, of complaint. Freeman and Medoff look into the question of union political power--finding it substantial in elections, much less so in lobbying for special-interest legislation. Regarding ""blemishes"" on unionism's two faces, they conclude that democracy is stronger at the lower, unseen levels; that corruption is ""no more than, and probably less than, business corruption""; that strikes are costly to those involved, not to the economy as a whole. So: why the steep decline in unionism? Reduced organizing, combined with greatly increased management opposition, legal and illegal. The authors' recommendations, finally, involve weakening unionism's monopoly effect and enhancing workers' opportunity to unionize. A cogent, up-to-date case for unions--with a lot of statistical and conceptual meat.

Pub Date: April 27th, 1984
Publisher: Basic Books