Richard B Freeman on Labour Unions

Interview Over at The Browser:

You wrote (with James Medoff) what remains the most-cited book on U.S. unions, What Do Unions Do? Please tell us about your seminal work.

Prior to our work, there was a shortage of evidence available on union effects. Newly available computerised data changed that. In conjunction with other social scientists, we were able to provide a more complete picture of how unions impact society.

The book looked at unions from two perspectives: first, what we called the monopoly face of union – unions acting as raisers of benefits for their members – and second, the voice face of unions, or how unions represented labour in the workplace and in the body politic, giving voice to people who otherwise wouldn’t have had much say. I think, in the long run, this is the stronger and more important face of unions.

So what do unions do?

The first thing unions do is to raise wages for working people, and that obviously benefits the working people. They also increase the kind of benefits that workers want. So, if workers want pensions, the unions negotiate for that. If workers want maternity leave, that’s what they bargain for. If workers want to have better insurance and are willing to give up some wages to get it, unions help them. Unions change the pattern of compensation towards greater benefits.

Because unions make working life better for workers, they lower turnover in unionised workplaces. Employers with unions traditionally have workers who stay longer and contribute to raising the productivity of the enterprise. Employers also get more credible information about what workers really want in the workplace, because the union representatives are democratically elected and they really speak for the workers. So a good, functioning union is a real positive. Of course, not all unions function well. But our evidence, and the evidence people generated twenty years later, demonstrated that, on net, unions are a positive force in the economy.