Comments From Conference Participants
| Date | 01 July 1986 |
| Published date | 01 July 1986 |
| DOI | http://doi.org/10.1111/j.1467-8543.1986.tb00682.x |
British Journal
of
Industrial Relations
24~2
July
1986
0007-1080
$3.00
Comments From Conference
Participants
Comments from Mark Stewart, (Economics Department,
University
of
Warwick)
These papers and the ensuing discussions at the conference represent an
interesting and stimulating interchange
of
ideas between Industrial Rela-
tions experts and Economists on this important topic. Ultimately they
served, at least for this participant, to emphasise the differences between the
two approaches rather than the common ground. The issues that are
perceived as important by the two groups seem to differ considerably and
the research methodologies even more
so
and
I
would venture to suggest
that both can usefully benefit from more contact with the views
of
the other.
The paper by Blanchflower provides a (selective) commentary on the
evidence on the impact
of
unions on relative wages in Britain.
As
at the
conference
I
would like to take issue with a number
of
the points made in the
paper and also comment on a couple of the questions raised
in
the
subsequent discussion.
I
find the paper’s adoption
of
Freeman and Medoff‘s
term ‘monopoly face’ for the study
of
union relative wage effects somewhat
misleading. The monopoly model is neither required for the analysis nor
implied by the finding of a significant differential, and this can lead to some
confusion.
For
example, the paper infers from the finding
of
small estimates
of
the union relative wage effect that ‘the lost output caused by the
missallocation
of
labour to areas where it is less productive was quite small’.
This assertion is based on the belief that the existence
of
a union relative
wage effect results in a missallocation of labour between the union and non-
union sectors, and this in turn is presumably based on belief in some form
of
the monopoly model of union behaviour. However,
if
the ‘efficient
bargaining’ model is appropriate (see Oswald’s paper), then the finding
of
a
positive wage differential would not imply the existence
of
this social cost.
The unionhon-union wage differential
or
‘wage gap’ being estimated in
this literature involves a conceptual experiment in which, at the individual
level, a union member
or
worker in the union sector is transformed into the
non-union equivalent without altering any characteristics of himself or his
job and without this transformation having any effects on the pay of other
workers in the economy. Given this, the likely existence
of
threat
or
spillover effects should not be regarded
as
‘potential biases’ in any estimates
of
the ‘wage gap’, although they will cause it to differ from what Lewis
(1983)
terms the ‘wage gain’.
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