Alternative Explanations of Union Wage Concessions

by Daniel Mitchell

Fall 1986

Volume 29
Issue 1

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A common explanation for the wave of union wage concessions and the shrinkage of union employment during the 1980s is that these developments reflected the impacts of deregulation and foreign trade on the U. S. economy. Examination of union concessions, however, suggests that this explanation is at best half right. Indeed, much of the concession bargaining which occurred during 1981-85 took place in industries which were not exposed to foreign competition and which were not deregulated. Similarly, most of the shrinkage in union employment cannot be attributed to employment trends in particular sectors. While concession-prone industries did show larger rates of job loss for union workers than other industries, these losses were largely due to forces other than general employment trends in those industries. It appears that union wage trends in the pre-concession era, and associated industrial relations developments, are best able to explain union jobs losses and wage concessions.

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