Bill, you are begging the question again. What is "the market rate"? "The rate at which labor would be bought and sold in a free competitive market," i.e., without unions ("cartels," "conspiracies and combination in restraint of trade")?
If that is what you are saying, you are mistaken about the empirical data. Actually the empirical evidence is that unions are very effective in raising wages:
Lawrence Mischel and Michael Walters, writing for the Economic Policy Institute, state
that unions raise the wages of unionized workers by roughly 20% and raise total compensation by about 28%.
The research literature generally finds that unionized workers' earnings exceed those of comparable nonunion workers by about 15%, a phenomenon known as the "union wage premium."
H. Gregg Lewis found the union wage premium to be 10% to 20% in his two well-known assessments, the first in the early 1960s (Lewis 1963) and the second more than 20 years later (Lewis 1986). Freeman and Medoff (1984) in their classic analysis, What Do Unions Do?, arrived at a similar conclusion.
http://www.epi.org/content.cfm/briefingpapers_bp143
Richard B. Freeman, James L. Medoff, What Do Unions Do? (1984) -- is the classic empirical analysis of the broad effect of unions on lots of things, including wage rates. The "union premium" is in fact substantial, as noted above, although less than formerly -- I'd hypothesize, because union density has been falling sharply.
Here is an abstract of a recent analysis of Freeman & Medoff's theses by
Alex Bryson
NBER Working Paper No. 9973 Issued in September 2003 NBER Program(s): LS
---- Abstract -----
We explore the various claims made by Freeman and Medoff (FM) in their famous book What do unions do? about the impact of unions on wages and update them with new and better data. The main findings are as follows. 1) Private sector union wage premium is lower today than it was in the 1970s. 2) The union wage premium is counter-cyclical. 3) There is evidence of a secular decline in the private sector union wage premium. 4) There remains big variation in the premium across workers. 5) There is big variation in industry-level union wage premia. 6) State level union wage premia vary less than occupation and industry level premia. 7) Union workers remain better able than non-union workers to resist employer efforts to reduce wages when market conditions are unfavorable. 8) There has been a decline in the unadjusted wage gap relative to the regression-adjusted wage gap. 9) Public sector wage effects are large and similar to those in the private sector.
http://www.nber.org/papers/w9973
So the premium is lower today, big surprise, unions are much weaker in this country, but real.
American workers still want unions, more than ever and and for lots of reasons, not just the money. A recent study by Freeman concludes:
In the mid-2000s, workers see a major gap between the representation and participation they want at the workplace and what they have; the largest proportion ever recorded in survey data express a desire for union representation. Many workers also desire workplace committees that meet and discuss issues with management, some as a supplement to collective bargaining and some as useful even without collective bargaining. Many attribute the absence of mechanisms for workers to discuss issues with management to management opposition to workers speaking out, and the United States has fallen far behind other English-speaking countries in providing alternative modes of employee voice at the workplace. The desire for worker representation revealed in the WRPS survey in the mid-1990s has become even stronger today.
http://www.sharedprosperity.org/bp182.html
If you ask, why then is union density falling? (a good question), I can start on American labor law, which is horrible, its enforcement, which is laughable, and management opposition, which is fierce and ruthless -- not what you'd expect if unions were the toothless creatures you depict!
--- Bill Bartlett <billbartlett at aapt.net.au> wrote:
> At 8:59 AM -0700 23/5/07, andie nachgeborenen wrote:
>
> >The "market rate" is not a natural phenomenon.
> Unions
> >affect it. Unionized job still pay significantly
> more
> >than nonunionized jobs, except in sectors like auto
> >where unions are a factor,and nonunion employers
> like
> >Toyota and Honda have to pay union rates in order
> to
> >keep the UAW out. Also a union does a lot more than
> >just give you wage leverage when there is any give.
> It
> >can also get you benefits, improve the terms and
> >conditions of employment, possibly (in this case)
> >establish limits on grad student teaching and part
> >time and temp hiring, better contracts for grad
> >students and non-tenure track faculty.
>
> Unions aim to effect the market and can succeed to
> some extent, in
> the same way as other cartels. But their
> effectiveness is still
> limited. Like any cartel, they have to monopolise
> the supply of
> labour in some way to leverage higher benefits. In
> the absence of
> some kind of monopoly control of the labour supply,
> the best union
> can do is make sure their members at least get the
> market rate.
> Non-union workers lack the resources to even be sure
> of that.
>
> I would suggest that the statistical evidence that
> unionised workers
> enjoy better wages and conditions than non-unionised
> workers reflects
> more on the kind of occupations which tend to be
> unionised (and the
> relative market conditions those workers have to
> start with) than it
> does the raw power of unions to force higher pay.
>
> Some occupations enjoy natural market advantages.
> Usually barriers to
> entry into those occupations. This gives these
> workers a negotiating
> advantage. These are in fact the most likely
> occupations to be
> unionised, because the advantages are clear. Whereas
> the advantages
> of being unionised if you work in an occupation that
> doesn't enjoy
> any barriers to entry are not very apparent. You
> will still be
> subject to stiff competition which allows the
> employer to drive a
> hard bargain, you will still be subject to arbitrary
> dismissal.
> There's little a union can do about any of that,
> because the employer
> can simply sack the entire workforce, with little
> cost, if they try
> to use industrial action to drive a better bargain.
>
> The role of unions has increasingly become one of
> mere service
> providers lately. Yes, they can help individual
> workers secure legal
> entitlements (in other words secure the normal
> market price for their
> labour.) But as for influencing what the market
> price is, the only
> way to do that is to get some kind of lever on the
> supply of labour.
>
> Bill Bartlett
> Bracknell Tas
> ___________________________________
>
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>
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