What Do Unions Do?COMM 381

Industrial Relations

Week 1

Dr. S. Walsworth

Walsworth, COMM 381

Lecture AgendaThe Union Effect

• Measurements

• Positive (Voice effect and Shock effect)

• Negative

Employer Effects• Productivity

• Profits

• Innovation

• Employment growth

Employee Effect• Compensation

• Job satisfactionWalsworth, COMM 381

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1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

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Figure 1: Union Density and GDP Measures for Canada, Australia, and Britain

Canadian Union Density

Australian Union Density

British Union Density

Canadian GDP

Australian GDP

British GDP

Union Density and GDP Measures

Walsworth, COMM 381

Union Density and GDP in SK

The Union Effect: Positive Effect

1. Voice Effect

2. Shock Effect

3. Increased workplace loyalty

4. Increased job security

Walsworth, COMM 381

The Union Effect: Negative Effect

• Union man first – employee/management conflict

• Higher wages

• Lower profits

• Lower investments

• Restricted growth

• Reduced management autonomy

• Increased protection for poor performers

• Decreased merit incentive

Walsworth, COMM 381

Employer Effects: Empirical Evidence

1. Productivity: mixed results, but generally not believed to match extra union cost

Walsworth, COMM 381

Employee Effect

Wage premium

Job security

Next week we get into the History of the Labour Movement