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International Handbook of Trade Unions

Edited by John T. Addison and Claus Schnabel

This Handbook is an authoritative and invaluable reference tool, uniquely analysing the forces governing unionism, union behaviour and union impact from a variety of perspectives, both theoretical and empirical. The 14 chapters are written in an accessible style by acknowledged leading specialists from the fields of economics and industrial relations. They offer a truly international perspective on this important subject.
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Chapter 8: Unions and the Wage Structure

David Card, Thomas Lemieux and W. Craig Riddell


David Card, Thomas Lemieux and W. Craig Riddell 1. Introduction This chapter discusses the impact of unions on the wage structure – the way in which wages vary systematically with characteristics such as education, age, gender, or occupation. Do unions widen or narrow pay differentials between the skilled and unskilled, between men and women, or between blue-collar and white-collar workers? Is the net effect of unions to increase or decrease overall wage inequality? These questions have long intrigued social scientists. Recently, they have attracted renewed interest as analysts have struggled to explain the rise in earnings inequality in several industrialized countries. The fact that two of the countries with the largest declines in unionization – the USA and the UK – also experienced the biggest increases in wage inequality raises the question of whether these two phenomena are linked. If so, how much of the growth in earnings inequality can be attributed to the fall in union coverage? The impact of unions on the wage structure depends on the industrial relations system – the social, political, legal, institutional and economic environment in which unions operate. Countries vary widely in their industrial relations systems, and these differences potentially affect both the goals of unions, and their ability to achieve these goals. In some countries unions exert considerable influence on the political process. By supporting minimum wage or pay equity legislation, for example, unions may be able to alter the wage structure in the economy. Unions also affect the wage...

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