Ezra Klein, in his response to my post on the union wage premium, directed our attention to this article about the union wage premium in service industries. The paper does find a wage premium, and in doing so offers up some juicy bits:
research suggests that unions usually have little power to inhibit subcontracting
altogether, but that they can sometimes mitigate its negative effects
on their members. The
hardest trend to fight has been the outsourcing of labor-intensive kitchen
tasks – baking, cleaning and chopping produce, making stocks and sauces.
The purchasing of prepared foods has become such a ubiquitous and fundamental
business strategy in the industry that it has been almost impossible
for unions to stop it. In the end, the economics of using pre-prepared
food are simply too compelling, and because the outsourcing is usually
done piece-meal, the union would have to fight over just one or two
jobs at a time. However, when the numbers of jobs involved are bigger
and the economic advantages less clear – for example, subcontracting
an entire laundry unit – unions have been able to focus their efforts
and have had somewhat more success, slowing the process down or limiting
Yes I can see the resulting wage premium within the union, but is this a good way to advance the state of the working man in the United States?