Cover image for The decline of US labor unions and the role of trade
The decline of US labor unions and the role of trade
Baldwin, Robert E.
Personal Author:
Publication Information:
Washington, D.C. : Institute for International Economics, [2003]

Physical Description:
xiii, 89 pages ; 23 cm
General Note:
"June 2003."
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HD6508 .B297 2003 Adult Non-Fiction Non-Fiction Area

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Between 1977 and 1997, there was a precipitous decline in the proportion of US workers with median education (12 years or less) who were represented by a labor union--from 29 to 14 percent; the unionization proportion declined much less among workers with above-median education (19 to 13 percent). The union wage premium also declined for workers with basic education, from 58 to 51 percent, whereas it rose slightly for better-educated unionists, from 18 to 19 percent. Thus, whatever safety net American unions provide was disproportionately lost by the less-educated workers who, arguably, need it the most.

In this study, Robert E. Baldwin investigates the role of changes in US imports and exports in explaining this dramatic decline. The main analysis (which includes workers in manufacturing as well as service sectors) relates changes in the number of union workers across industries to changes in domestic spending, imports, exports, and the intensity with which labor is used across these industries for both union and nonunion workers. Baldwin finds that although globalization (i.e., increased trade) seems to have contributed only modestly to the general decline in unionization, it has, more importantly, contributed to the decline in unionization among workers with less education. The study concludes with a discussion on the implication of this and the other findings for governmental policy and for the policy position of unions toward globalization.

Author Notes

Robert E. Baldwin, visiting fellow, is Hiddale Professor of Economics Emeritus at the University of Wisconsin-Madison. He was chief economist in the Office of the US Trade Representative (1963-64) and served as a consultant on trade matters in the US Department of Labor (1975-76), the United Nations Conference on Trade and Development (1975), the World Bank (1978-79), and the Organization for Economic Cooperation and Development (1988, 1993, and 1997). From 1991 to 1992, he served as chair of the Panel on Foreign Trade Statistics for the National Academy of Science's Committee on National Trade Statistics. He is a research associate at the National Bureau of Economic Research and a fellow of the American Academy of Arts and Sciences. He was also a member of the external advisory group to Mike Moore, former director-general of the World Trade Organization

Reviews 1

Choice Review

The American unionization rate plunged from 25 to 13.8 percent between 1977 and 1997, with the rate falling faster for less educated workers and those in net importing sectors. In this slim volume, Baldwin (emer., Univ. of Wisconsin) first describes these trends and shows that they are not due simply to changes in the industrial and regional mix of employment. Next, he uses multivariate regressions to estimate the impact of increased international trade on unionization rates, concluding that burgeoning imports and exports explain a little, but not much, of the recent collapse in unionization. Because the erosion of unions is ubiquitous, occurring in virtually all sectors and regions--not just trade-intensive industries--he concludes that more fundamental forces, such as growing employer opposition, unfavorable legal developments, and declining worker trust in union institutions, are the root cause. However, because of data limitations and the complexity of the economic forces at work, many will be skeptical about the ability of Baldwin's estimates to validly address the causes of deunionization and the impact of trade. ^BSumming Up: Optional. Comprehensive graduate, research, and professional collections. R. M. Whaples Wake Forest University

Table of Contents

Prefacep. ix
Acknowledgmentsp. xiii
1 Overviewp. 1
2 Trends in National and Regional Unionization Rates and in Union Versus Nonunion Wagesp. 7
National Trends in Unionizationp. 7
Regional Trends in Unionizationp. 10
Trends in the Earnings of Union Relative to Nonunion Workersp. 10
3 Changes in Unionization Rates: A Decomposition Analysisp. 15
Industry Effects on the National Rate of Unionizationp. 16
Industry Effects on Regional Unionization Rates in Manufacturingp. 19
Regional Effects on the National Unionization Rate in Manufacturingp. 23
4 The Effects of Trade and Other Economic Factors on the Rate of Unionization: An Analytical Reviewp. 27
Increases in Trade and Foreign Direct Investmentp. 28
Technological Changesp. 30
Relative Shifts in the Demand for Goods and Servicesp. 31
Changes in the Relative Supply of Basically Educated Versus More-Educated Laborp. 32
Net Effects of the Four Economic Forcesp. 33
5 Estimating the Impact of Increased Trade on the Employment of Union and Nonunion Workersp. 37
Statistical Modelp. 37
Data Issuesp. 40
Summary Statisticsp. 42
Regression Resultsp. 45
Total Employment Effectsp. 57
6 Conclusionsp. 65
Main Findingsp. 65
The Need for More Extensive Worker Assistance Programsp. 69
Appendix A Data Sourcesp. 73
Appendix B List of Industries in the Databasep. 75
Referencesp. 81
Indexp. 83
Table 2.1 Proportion of unionized workers by product sector and educational level, 1977-97
Table 2.2 Distribution of unionized workers across product sectors and educational levels, 1977-97
Table 2.3 Proportion of unionized workers in manufacturing by region and year, 1977-97
Table 2.4 Earning levels and ratios of union and nonunion workers by sector and educational level, 1977-97
Table 3.1 Estimated changes in unionization rates due to within-industries shifts in unionization rates and between-industries shifts in employment, 1977-87 and 1987-97
Table 3.2 Estimated percent distribution of changes in regional unionization rats in manufacturing due to within-industries and between-industries shifts in employment, 1977-87 and 1987-97
Table 3.3 Regional distribution of change in national unionization rate in manufacturing due to within-regions shifts in unionization rates and between-regions shifts in employment shares, 1977-87 and 1987-97
Table 5.1 Summary statistics for manufacturing, 1977-87 and 1987-97
Table 5.2 Summary statistics for goods and services sectors, 1977-87 and 1987-97
Table 5.3 Employment changes by union status regressed on changes in domestic spending, imports, exports, and labor coefficients, 1977-87 and 1987-97