Book Reviews
| Published date | 01 September 2003 |
| Date | 01 September 2003 |
| DOI | http://doi.org/10.1111/1467-8543.00288 |
BOOK REVIEWS
The Economics of Labor Unions edited by Alison L. Booth, 2 vol. set. Edward Elgar,
Cheltenham, UK/Northampton, Mass., 2002: vol. 1, xix +589 pp.; vol. 2, viii +
577 pp., ISBN 1 84064 526 1, £275.
There are over 200 volumes in the International Library of Critical Writings in Eco-
nomics.Alison Booth has edited two more — 47 articles and another 1000-plus pages.
It is worth asking what they are for. Presumably — at this price — they are for library
purchase, perhaps in institutions where access to the original articles is limited. For
teaching, the volumes can then be used to supplement a standard text. For example,
there are excellent textbooks on the economics of unions by Booth herself and by
Hirsch and Addison, Freeman and Medoff, and Pencavel. For research, the articles
provide an overview of the structure of the literature and help establish which issues
are resolved or remain unresolved.
Volume 1 has seven parts. Part I deals with allocative and technical inefficiency (five
articles). This includes the classic essay by Rees on inefficiencies associated with any
union wage premium and the rather neglected piece by Johnson and Mieszkowski
which establishes the conditions under which unions make such gains at the expense
of either capital or non-unionized workers. Grout’s elegant theory that unions reduce
investment is included here too. Part II includes the counter-view (two articles) that
unions can be efficiency-enhancing. The Freeman–Medoff article is particularly useful
— it summarizes their textbook.
Then comes bargaining power (Part III, four articles), imperfect competition
(Part IV, three articles) and modelling union behaviour (Part V, ten articles). Strikes
are the subject of Part VI, with two exemplary papers dealing with strikes and
information by Kennan and Wilson and Tracy. The choice of bargaining structure
is covered in Part VII (two articles), including the important Horn and Wolinsky
article which sets out when workers are likely to be better off bargaining jointly or
separately.
Volume 2 is in five parts. The economic effects of unions (Part I, seven articles)
deals only with the wage gap and ignores any union impact on productivity, profit,
investment in physical and human capital and employment (see below). Unions and
hours of work (Part II, two articles) and public sector unionism (Part III, 3 articles)
contain useful discussions of the shorter work week (Booth), final offer arbitration
(Stevens) and teachers (Hoxby). Unions and the macroeconomy is the subject of Part
IV (six articles, mostly Europe-centric rather than the US focus of most of the chosen
British Journal of Industrial Relations
41:3 September 2003 0007–1080 pp. 583–604
© Blackwell Publishing Ltd/London School of Economics 2003. Published by Blackwell Publishing Ltd,
9600 Garsington Road, Oxford OX4 2DQ, UK and 350 Main Street, Malden, MA 02148, USA.
articles). Finally, in Part V there is one article only, by Naylor, on the union impact
on foreign direct investment.
The structure of these volumes is curious. Normally one would start with evidence
on bargaining and membership, go on to analyse what gives unions power, and con-
clude with the impact of unions. In the event there is little discussion of the ebb and
flow of membership. Further, Part V, dealing with modelling union behaviour, which
obviously affects membership,is some 200 pages long and yet — leaving aside the two
articles dealing with specific US unions (United Mine Workers and International
Typographical Union) — never mentions any particular union. It is no wonder that
even those of us who are pro-theory sometimes think of economics as a degenerate
science.
Equally, there is little on the roots of union power — the closed shop and the
strike threat. Although strikes are rare, the threat is vital and there are other
economic approaches to strikes than asymmetric information, including accidents,
principal–agent models and joint costs. Also, if you were to ask the general public
about unions,one issue that would emerge is strikes with substantial collateral damage
— third-party effects of action by groups like fire fighters, tube drivers and bin men.
Yet no articles were selected that deal with this matter. Indeed, despite the fact that
in the US private sector union membership is now below 10 per cent and in the UK
public sector membership is treble that of the private sector, the whole question of
public sector unionism merits only three articles.
Recent UK evidence suggests that the union wage premium has fallen to between
0 and 5 per cent. Yet it is that premium that gets the lion’s share of attention of the
articles dealing with the economic impact of unions. There is no consideration of pro-
ductivity (perhaps the marvellous research on disputes and productivity at Boeing by
Kleiner and Bridgestone Tyres by Krueger is too recent to include), financial perfor-
mance, plant closures and employment growth. Similarly, there is no discussion of
any union impact on family-friendly policy, industrial accidents, the climate of indus-
trial relations and job satisfaction.
While I found the articles useful and informative, I still felt a bit empty. Few of the
articles mention specific unions or companies. There is little on the history, strategy
and tactics of the parties. And the articles provide no clue to the big question — will
private-sector unions still be around in 2050?
D M
Centre for Economic Performance, London School of Economics
The Europeanisation of Industrial Relations: National and European Processes in
Germany, UK, Italy and France by Wilhelm Eberwein, Jochen Tholen and
Joachim Schuster.Ashgate, Aldershot, UK, 2002, x +178 pp., ISBN 0 7546 1892
7, £39.95.
Employee Relations in the Periphery of Europe: The Unfolding Story of the European
Social Model by Emer O’Hagan. Palgrave Macmillan, Basingstoke, UK, 2002,
xvi +265 pp.; ISBN 0 333 94727 4, £45.00.
The idea of a ‘European social model’ of industrial relations is at one and the
same time a myth and a reality. If national systems in continental western Europe are
584 British Journal of Industrial Relations
© Blackwell Publishing Ltd/London School of Economics 2003.
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