Product Market Competition, Union Organizing Activity, and Employer Resistence
John M. Abowd
Henry S. Farber
We develop and estimate a model of the union's optimal extent of
organizing activity that accounts for the decision of employers regarding
resistance to union organizing. The central exogenous variable in the
analysis is the quantity of quasi-rents per worker available to be split
between unions and employers.
We measure available quasi-rents per worker as the difference per
worker between total industry revenues net of raw materials costs and labor
costs evaluated at the opportunity cost of the workers. Using two-digit
industry level data for thirty-five U.S. industries for the period 1955
through 1986, we find that both organizing activity and employer resistance
to unionization are positively related to available quasi-rents per worker.
However, there is still a strong negative trend in union organizing activity
and a strong positive trend in employer resistance after controlling for
quasi-rents per worker. Thus, the explanation for the decline in union
organizing activity and the increase in employer resistance to unionization
since the mid 1970's lies elsewhere.
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