Union Relative Wage Effects: New Evidence and a Survey of their Implications for Wage Inflation

Abstract

The measurement of any excess of the wage rate of union workers over nonunion workers no longer stimulates much controversy in the US. The measure-ment methods have been standardised and there is now a broad consensus on how these union wage effects have moved over time and even how they differ as between black and white or male and female workers.² This end to con-troversy has undoubtedly resulted for a variety of reasons: for one thing, as George Johnson [6] has remarked, the mere existence of trade unions is no longer a serious question of public policy. In addition, the quality of the measurement devices and of the microeconomic data available to researchers has made it possible to eliminate some of the ambiguity of measurement present in the earliest studies.³

The preparation of this paper was sponsored by the Council on Wage and Price Stability, which is not responsible for the views expressed herein. I am indebted to D. Alton Smith and Sharon Smith for assistance, and to William R. Bailey of the Bureau of Labor Statistics for helpful discussions regarding the data used. I must also add that none of the analysis in this paper would have been possible without the splendid co-operation of the BLS in making these data available to independent researchers. Later careful comments by H. Gregg Lewis have removed a major error and resulted in a revision of several computations.