Government policy supported industry-level bargaining by enacting legislation that extends the basic wage and fringe benefit patterns negotiated in collective bargaining to cover workers in the nonunionized firms of each industry.
Studies of differences between the movements of wages in unionized and nonunionized sectors of employment, especially in the United States, have brought out three other effects of the extension of collective bargaining.
A second effect has been in the timing of changes: when wage rises were the order of the day, unionized workers achieved them earlier than nonunionized; and when the market was moving the other way, cuts of unionized workers were put off longer.
In the United States, for example, the differential between wages in the unionized and nonunionized sectors was at its highest in the 1932 depression trough.
To start the process, a union targets a nonunionized company and encourages some of its members to seek employment there.
In auto, steel, and clothing, the problem was intensifying foreign competition; in communications, trucking, railroads, and airlines, it was federal deregulation in the 1970s; and elsewhere, as in mining, retailing, and meat processing, a host of nonunionized domestic competitors entered the field.
Lewis led a successful national coal strike in 1919, but during the 1920s the UMWA's membership shrank from 500,000 to fewer than 100,000 as unemployment spread among UMWA members in northern states and nonunionized mines in the southern Appalachians increased their production.
Of course, only about two-fifths of public sector workers are represented by unions, so there is a larger pool of the nonunionized to lay off.
Even in percentage terms, though, public workers who were represented by unions were much more likely to keep their jobs than the nonunionized: the number of workers who belonged to unions or were covered under union contracts fell by 1 percent from 2010 to 2011, while the number of workers not represented by a union fell by 3.9 percent.
To the Editor: Francis Fukuyama says, offhandedly, that many of Friedrich A. Hayek's ideas "have become broadly accepted by economists — e.g., that labor unions create a privileged labor sector at the expense of the nonunionized; that rent control reduces the supply of housing; or that agricultural subsidies lower the general welfare and create a bonanza for politicians".
Party leaders at the conference pushed through a proposal for setting a minimum hourly wage for nonunionized workers that would vary from industry to industry and region to region.
