23 Unions - LECTURE 23 NON-COMPETITIVE LABOR MARKETS 1:...

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Unformatted text preview: LECTURE 23 NON-COMPETITIVE LABOR MARKETS 1: UNIONS ANNOUNCEMENTS Problem Set 5 due Thursday UNIONS A BRIEF HISTORY Yellow dog contracts contract with employer that will not join union Norris LaGuardia Act of 1932 make yellow dog unenforceable National labor relations act of 1935 (Wagner Act) Labor Management Relations Act of 1947 (Taft-Hartley Act) Right to work Labor-Management Reporting and Disclosure Act of 1959 Civil Service Reform Act of 1978 right of public workers to have union, but no strikes Employee Free Choice Act UNION MEMBERSHIP IN THE UNITED STATES, 1900-2005 5 10 15 20 25 30 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010 Year Percent UNION MEMBERSHIP IN THE PUBLIC SECTOR, 1962-2005 15 20 25 30 35 40 1960 1970 1980 1990 2000 2010 Year Percent unionized EARNINGS BY UNION MEMBERSHIP (2009) Median weekly earnings Total Members Represented Non- of unions by unions union Total, 16 years and over $739 $908 $901 $710 Men 819 957 953 786 Women 657 840 833 628 White 757 934 926 728 Black or African American 601 749 745 581 Asian 880 907 919 870 Hispanic or Latino ethnicity 541 774 763 516 OUTLINE Why do workers form unions? How do unions work? What is the effect of unions on wages and employment? Are unions efficient? What is the purpose of strikes? THE DECISION TO JOIN A UNION Leisure C ($) L* h* w* THE DECISION TO JOIN A UNION Leisure C ($) h U w* w U Will join union THE DECISION TO JOIN A UNION Leisure C ($) h U w* w U Will NOT join union DETERMINANTS OF UNION MEMBERSHIP A worker joins a union if the union offers him a wage-employment package that provides more utility than the wage-employment package offered by a nonunion employer Wage increases increase firm costs, so there could be employment cutbacks MONOPOLY UNIONS Assume union has utility over wages and employment: g = G(,) Prefer more of both: marginal utility of a wage increase and of an employment increase are both positive **Firms are still competitive THE BEHAVIOR OF MONOPOLY UNIONS Wage ($) Employment U U U > U THE BEHAVIOR OF MONOPOLY...
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23 Unions - LECTURE 23 NON-COMPETITIVE LABOR MARKETS 1:...

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