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Edited by John T. Addison and Claus Schnabel
Chapter 7: Changes Over Time in Union Relative Wage Effects in the UK and the USA Revisited
7 5 Changes over time in union relative wage eﬀects in the UK and the US revisited David G. Blanchﬂower and Alex Bryson 1. Introduction Union density has been in decline in the United States and Britain for two decades now (Appendix Table 7A.1). It is often asserted by commentators that trade unions are outmoded institutions, shunned by employers and unable to reach a new generation of workers imbued with individualist values that are at odds with the ethos underpinning unionism. But the propensity of individuals to join unions is not simply a question of ‘desire’ or ideological commitment. More broadly, one can think of union membership as a good – a product or service to be purchased. Employees derive utility from this good, as they would other services or products. In the case of union membership, this utility can be psychological. For example, the decision to purchase membership may be due to the desire to conform to a social norm and thus maintain one’s reputation among co-workers. It may also be driven by instrumentalism, wherein employees think they have something tangible to gain from membership, either in terms of better wages, improved non-pecuniary terms of employment, or they may see it as insurance against arbitrary employer actions. So, beneﬁts may accrue to the individual, but they come at a cost. Employees will purchase membership if the beneﬁts outweigh the costs. A shift in the propensity to purchase union membership may reﬂect a shift in individuals’...
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