Learning to Love the Government: Trade Unions and Late Adoption of the Minimum Wage
World Politics vol. 68, no. 3: 538-575.
One counterintuitive variation in wage-setting regulation is that countries with the highest labor standards and strongest labor movements are among the least likely to set a statutory minimum wage. This, the author argues, is due largely to trade union opposition. Trade unions oppose the minimum wage when they face minimal low-wage competition, which is affected by the political institutions regulating industrial action, collective agreements, and employment, as well as by the skill and wage levels of their members. When political institutions effectively regulate low-wage competition, unions oppose the minimum wage. When political institutions are less favorable toward unions, there may be a cleavage between high- and low-wage unions in their minimum wage preferences. The argument is illustrated with case studies of the UK, Germany, and Sweden. The author demonstrates how the regulation of low-wage competition affects unions’ minimum wage preferences by exploiting the following labor market institutional shocks: the Conservatives’ labor law reforms in the UK, the Hartz labor market reforms in Germany, and the European Court of Justice's Laval ruling in Sweden. The importance of union preferences for minimum wage adoption is also shown by how trade union confederation preferences influenced the position of the Labour Party in the UK and the Social Democratic Party in Germany.
Financialization, Technological Change, and Trade Union Decline
Forthcoming in Socio-Economic Review
Recent research finds that financialization and technological change have had a variety of negative effects on labor, including reducing low-skill workers’ wages and increasing income inequality. In this paper, I examine the effect on trade unions of one type of financialization, equity market development, and one type of technological change, routine-biased technological change. I argue that we should conceptualize trade union strength in two dimensions: 1) the strength of their institutional structures, such as the degree of wage bargaining coordination and the degree to which firms can deviate from collective agreements; 2) the strength of their membership. Using data for 21 OECD countries 1969-2010, I find a negative effect of equity market development on unions’ institutional structures, but not on union membership. Contrarily, I find that routine-biased technological change has a negative effect union density, but an inconsistent and sometimes positive effect on unions’ institutional structures. These findings are largely robust to a variety of tests for reverse causality.
Left to Right: Labor Market Insecurity and Political Attitudes
In recent decades, there has been a gradual decline in working class organizations, including social democratic parties and trade unions, and an increase in support for populist radical right parties across western democracies. Many scholars see these trends as connected, as the decline of stable employment in industry and rise in labor market insecurity have caused many working class voters to support nativist politicians and policies. In this paper, I develop and test a theory of how labor market insecurity and labor market institutions affect attitudes toward trade unions and populist radical right parties. I find that with an increase in labor market rigidity, which I define as the difference between employment protection and spending on active labor market policy, those facing labor market insecurity become less likely relative to others to support trade unions and more likely to support populist radical right parties. I find evidence for these predictions in data for 27 OECD countries 1981-2010.
Economic and Cultural Explanations of Support for Right-Wing Populist Parties
A cornerstone of the debate over sources of individual support for right-wing populist parties is whether this support is determined primarily by economic or cultural factors. Existing work has found that cultural issues, especially attitudes toward immigration are the primarily drivers of support, but that various measures of economic insecurity also have explanatory value. Research focusing on the role of economic insecurity tends to focus on individual-level measures, such as employment status or probability of job loss. In this paper, I expand the range of economic factors to include data on regional and sector-level economic performance, as well as the difference between individual and mean regional incomes. I also consider a wider range of cultural factors, including support for different types of immigrants as well as religiosity and support for LGBT rights. Using data from the European Social Survey 2002-2014, I find little consistent support for stories based on either economic insecurity or cultural resentment. The results are idiosyncratic. Most regional and sector-level economic variables have little consistent explanatory value. This is also true for core measures of cultural conservatism, religiosity and opposition to LGBT rights. Interestingly, I also find that the only consistent predictors among the immigration variables are questions about opposition to immigration from different backgrounds. These are the strongest predictors overall. Opposition to immigrants from the same ethnic background does not predict support for right-wing populist parties.
Labor Market Policies and Trade Unions
Hollowed Out: Automation, Labor Market Polarization, and Trade Union Decline
Work on deunionization in advanced democracies has focused on a variety of factors including hostile political forces, economic globalization, national economic structure and the changing structure of the economy and of employment. Following recent work in labor economics, which has shown that an increase in computing power allows for the automation of jobs performing 'routine tasks' with mechanized processes, I argue that decline in employment in routine task jobs, including much of those in manufacturing and clerical work should cause deunionization. Decline of routine task employment has generated 'employment polarization,' a sorting of employment into high- and low-wage service and abstract task-intensive occupations, with a decline in routine task intensive jobs which located in the middle and upper-middle of the wage distribution. This process suggests and additional mechanism for deunionization; that in addition to automation of routine task jobs, either changing individual preferences or a changed overall distribution of preferences for unionization due to employment polarization may have an important additional explanatory role.
I test two primary claims: 1) that decline in routine task employment causes a decline in union density 2) that in addition to replacement of unionized routine task jobs, this also works via a mechanism of increasing heterogeneity in workers' preferences for unions. I test the former claim using data on occupational employment and union density for 21 OECD countries 1969-2008, using computing power as an instrumental variable for routine task employment. I find that decline in routine task employment causes decline in union density. In contrast, I find little consistent support for the closely-related thesis that a task-based measure of 'offshorability' is consistently associated with a decline in union density, casting doubt that offshoring may be primarily responsible for union density decline. In order to test the further claim that deunionization may also result in part from increased heterogeneity in preferences for union representation due to employment polarization, I use linked employer-employee panel data from Germany 1993-2007. At the firm level, I find that greater differences between worker skills consistently predict reduced time until dropping out of sector-level and firm-level wage contracts, but inconsistent evidence that firms with a greater percentage of workers performing routine tasks remain in wage contracts longer. At the industry-level, I find little evidence that between-firm differences in workers' skill profiles explains the percentage of firms participating in industry-level contracts, but that industries with higher routine task employment have higher percentages of firms participating in industry-level contracts.
The Politics of Wage Regulation in Rich Democracies (with Matthew Dimick)
In this paper, we present a positive political economy theory of the regulation of wages in advanced industrial democracies. Although government regulation of wages can support union wage bargaining, it also presents certain dangers: government regulation (1) may set wages lower than unions prefer, (2) can reduce the incentives of workers to join unions in the short term, and (3) undermine the social customs and networks that sustain union membership in the long term. For these reasons, we predict that unions and labor-backed political parties will support government regulation of wages only when unions are too weak by themselves to sustain high minimum wages. We formalize these propositions in a model and test the basic argument using four case studies: The United States, Germany, The United Kingdom, and Sweden.
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Economic Issues, Security Threats, and Support for Right-Wing Populism (with Isabela Mares)
One of the central issues in research on individual sources of support for right-wing populist parties is whether economic issues play an important role in this support. Much recent research has found that support is overwhelmingly determined by cultural factors, such as cultural concerns about immigration, racism, and authoritarian personality. On the other hand, recent research has also found that offshoring shocks can partially explain both cultural concerns and support for right-wing populist parties. We address these issues with a series of vignette experiments where we manipulate the type of economic messaging in vignettes about immigration and security. Treatment conditions include a standard right-wing economic message on dealing with the economic consequences of immigration through business deregulation and tax cuts and a more left-wing economic message, similar to that of many right-wing populist parties, of creating jobs through new infrastructure programs. If, as we suspect, many supporters of right-wing populism are also likely to support left-wing economic platforms, the support for the platform under the left-wing economic treatment condition will be higher than under the right-wing treatment condition or the no-message control.
In a second vignette, we examine the willingness to violate democratic norms among supporter of right-wing populist parties. Recent research and historical experience has found that these individuals may be particularly willing to violate democratic norms when they view the country as under threat. We conduct a vignette experiment in which we present scenarios regarding how politicians should deal with immigration and security concerns. In the control condition, politicians take standard measures, ie. work through parliamentary procedures and with the European Union. In the treatment condition, the political leader can circumvent parliamentary procedures and unilaterally take action to address these concerns. We expect that those who support right-wing populist parties will be more likely to support the latter course of action than others.
The Space Between: Institutional Legitimacy and Inter-Group Attitudes (with Alexandra Cirone)
Research on attitudes toward redistribution has found that perceptions of fairness of distributions play a central role in support for redistribution. Individuals are less likely to support specific welfare programs and redistribution generally when they believe that their primary beneficiaries are undeserving of these benefits. This research has, however, paid less attention to the procedures underlying such distributions. We believe that individuals judge the legitimacy of outcomes in light of how they view the legitimacy of the procedures generating those outcomes. Individuals should, for example, be more likely to support welfare programs when believe that these programs benefit those who are deserving, perhaps because they only go to those truly in needs or have strong work requirements. We also expect that individuals will be more likely to accept unequal outcomes when these outcomes are the result of fair procedures. In order to examine these hypotheses, we conduct a series of lab games in which players cooperate to achieve an outcome which results in unequal payoffs. We vary the rules governing the distribution such that individuals will play the same game with differing levels of inequality in outcomes and see how this affects individuals' willingness to cooperate in subsequent rounds. We expect that individuals will be more likely to accept unequal outcomes in subsequent rounds when they have previously played under fair rules.
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