CLOSED SHOPS AND RELATIVE PAY: INSTITUTIONAL ARRANGEMENTS OR HIGH DENSITY?
| Published date | 01 November 1992 |
| DOI | http://doi.org/10.1111/j.1468-0084.1992.mp54004002.x |
| Author | Mark Stewart,David Metcalf |
| Date | 01 November 1992 |
OXFORD BULLETIN OF ECONOMICS AND STATISTICS, 54,4(1992)
0305-9049 $3.00
CLOSED SHOPS AND RELATIVE PAY:
INSTITUTIONAL ARRANGEMENTS OR HIGH
DENSITY?
David Metca if and Mark Stewart
I. INTRODUCTION
There is now general agreement that, on average, unionized establishments
pay higher wages than otherwise comparable non-union ones. Recent
evidence for Britain also suggests that the presence of a closed shop arrange-
ment further raises the level of pay. In addition a pre-entry closed shop is
found to have a larger impact than a post-entry one. Stewart (1987) found
that in 1980 the pay of semi-skilled manual workers was, ceteris paribus, 5
percent higher where there was some form of post-entry closed shop arrange-
ment than where there was just union recognition but no form of closed shop.
This premium rose to 10 percent where the closed shop was pre-entry (both
of these effects were significantly different from zero). For skilled manual pay
the corresponding estimates were 4 percent and 8 percent (again both statisti-
cally significant). These estimates are based on data from the first Workplace
Industrial Relations Survey (WIRS). Estimates based on the second survey,
conducted in 1984, are broadly similar to those for 1980. Stewart (1991)
found that the pre-entry premium on semi-skilled pay had increased slightly,
to about 14 percent, while that for post-entry had contracted slightly, to
about 3 percent. (Both of these are again relative to pay in an establishment
with union recognition but no form of closed shop.) Premia of these orders of
magnitude can also be found in a number of other recent studies based on the
WIRS samples.
Several recent pieces of industrial relations legislation have been aimed at
the weakening and eventual removal of closed shops. From 1980 any new
closed shops required a substantial majority in a ballot of employees at the
workplace. In 1982 this provision was extended (coming into force in 1984)
to existing closed shops. Rather few such ballots were held and therefore
most closed shops were operating unlawfully post 1984. Subsequently the
government simply outlawed the post-entry closed shop in 1988 and the pre-
entry closed shop in 1990 (see Metcalf and Dunn, 1991, for further details of
the industrial relations legislation).
503
To continue reading
Request your trial