Balance Sheet

Balance Sheet

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Richard B. Freeman
James L. Medoff

Working Paper No. 364

1050 Massachusetts Avenue
Cambridge MA 02138
June 1979

Our research on trade unionism in the United States is part of the
NBER's research program in Labor Economics and is being supported
by a National Science Foundation grant (APT77-16279) to the
National Bureau. All of the results of this proj ect will be
discussed at length in What Do Unions Do? (Basic Books,
forthcoming). We have benefitted from the comments of John Dunlop
and participants in the Labor Seminar at Harvard University and in
seminars at numerous other universitites. This paper is scheduled
to appear in Public Interst, Fall 1979. Any opinions expressed
are those of the authors and not those of the National Bureau of
Economic Research.

NBER Working Paper 364
June 1979

The Two Faces of Unionism


This study delineates and assesses the relative accuracy of two views
of trade unions in the U.S.

In the first, which we call the "monopoly"

view, unions are a detrimental force in advanced capitalist systems; unions
do little more than raise the wages of their members beyond what they would
otherwise be, increasing the degree of economic inefficiency and inequality.
In the second, which we refer to as the "collective voice/institutional
response" view, unions provide workers with collective voice, which is
essential in the absence of meaningful opportunities for individual exit;
this voice elicits institutional responses which dramatically change the
nature of the employment relationship and, in so doing, increases the levels
of productivity and equality in many settings.
The evidence presented indicates that those who focus on the monopoly
face of unionism and ignore the collective voice/institutional response view
are likely to hold erroneous beliefs about unions in this country.

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