Download file 521 KB Texto completo en español More of: John Pencavel

The decline in U.S. private sector unionism in the United States has been replicated in several high-income economies. In this work the author proposes an economic explanation of this phenomenon, and different correlations are examined between the presence of trade unions and changes in unemployment and inequality of income. Against this background, the author reviews the theory and empirical evidence on the economic implications of each one of the three spheres of action of trade unionism: (1) the wage-making activities of unions, (2) their political activities, and (3) their role in regulating the employment relationship.
In the first area, the impact of collective bargaining on employment and salaries of both unionized and non-unionized workers is discussed. The economic implications of wage-extension rules to workers who do not belong to unions are also analyzed.
Regarding the unions’ political activities, the author explains from an economic perspective why they defend laws like the minimum salary law and restrictions that make the labor market more rigid. The strengths and weaknesses of different collective bargaining systems are evaluated, and evidence on the effects on the economy of more or less centralized and coordinated negotiating structures are analyzed.
In regard to the regulation of labor relations, the author discusses benefits in productivity related to workers’ representation in the workplace. On this subject, he states that the union is not the only vehicle that can serve as an agent of employees for these effects, and he analyzes the role that workers’ councils play today in Europe.