Unionism and the Occupational Wage Structure in the United States

THIS PAPER PRESENTS a theory and measurement of the effect of unionism on occupational differentials. One possible theory of union occupational wage policy is sketched in Section 2 and is essentially an exercise in optimal pricing among multiple related markets. Union effects on skilled-semiskilledunskilled differentials are measured with the use of cross-section data in Section 3. Measurements are derived independently of Section 2 and are interesting in their own right. Thus, the reader may interpret them in ways other than is done here, though they tend to be consistent with the central hypotheses of the optimal pricing model. Major substantive results may be summarized: If production labor is divided into skilled or not-skilled categories, unionism has widened differentials, increasing rates of union skilled craftsmen compared with nonunion skilled craftsmen by relatively more than corresponding unionnonunion rates for atl other production workers. Further disaggregation of production labor into skilled craftsmen, semii-skilled operatives and unskilled laborers indicates unionism has probably increased rates of unskilled laborers by at least as much and possibly more than that of skilled craftsmen, confirming a result of several other investigators. However, the unionnonunion differential of unskilled labor is significantly higher than that of semiskilled operatives. The latter effect is quite small, though this group constitutes a high proportion of all production workers and the outcome is that unionism has most likely widened the occupational structure when all three groups are considered together.