Declining Unionization: Do Fringe Benefits Matter?

Abstract

This study examines whether there is a relationship between benefits and private sector unionization in the US. In their regression analysis, the authors use FRINGE in their as an explanatory variable. The dependent variable is UNIZ, the fraction of the private, non-farm labor force that is unionized. The changing nature of compensation has affected union density. In the private sector, as fringe benefits have become a more prominent component of workers' pay, ceteris paribus, union density has declined nationwide. Over the fifty-year period 1948-1997, at least 12% of the drop in unionization can be attributed to the growing role of non-wage benefits. For the private sector in general and manufacturing in particular, the authors have established that unionization is related to the composition of pay. Yet the influence of non-wage benefits may vary across industries or even different subsectors of manufacturing. It remains to be seen whether there are similar findings for other sectors.