Overall Impacts

Grant d that unions raise the wages of uni n m mbers, we might ask whether unions bootstrap the entire economy to a higher real wage. Most economists now believe that unions redistribute income not from capital to labor but from nonunion labor to union labor. Put differently, if unions succeed in raising their wages above competitive levels, their gains come at the expense of the wages of nonunion workers.

This analysis is supported by empirical evidence showing that .the share of national income going to Jabor has changed little over the last six decades. Once cyclical influences on labor’s share are removed, we can ‘see no appreciable impact. of unionization on the share of wages in the United States (see Figure ·12-1 on page 227). Moreover, the evidence from heavily unionized European suggests that when union succeed in raising money wage rates, they sometimes trigger an inflationary wage-price spiral with little or no pe~ent effect
upon real wages.

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