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38 Indus. & Lab. Rel. Rev. 244 (1984-1985)
What Do Unions Do

handle is hein.journals/ialrr38 and id is 246 raw text is: REVIEW SYMPOSIUM WHAT DO UNIONS DO? by RICHARD B. FREEMAN and JAMES L. MEDOFF EDITOR'S INTRODUCTION by JOHN F. BURTON, JR.* F OR several reasons, What Do Unions Do?' by Richard B. Freeman and James L. Medoff is the most significant book on the topic in recent years. The theses are pro- vocative, including a number favorable to unions. The authors are prominent, as members of the Harvard Economics Department. The arguments have been previewed elsewhere, such as in the 1979 article in The Public Interest on The Two Faces of Unionism. And the current pres- entation is accessible to a general audience. The result is a book that has been praised by scholars such asJohn Kenneth Galbraith and John T. Dunlop and reviewed in pop- ular media such as The New York Times and Business Week. These factors explain our special treatment of the book: a brief sum- mary followed by a series of comments by prominent scholars. The central message of Freeman and Medoff (F&M) is that there are two faces to unions-one with largely undesirable consequences for society and one with largely beneficial results-and the empiri- cal evidence demonstrates that the bene- *John F. Burton,Jr., is a Professor at the New York State School of Industrial and Labor Relations, Cor- nell University, and Associate Editor of the Industrial and Labor Relations Review. 'New York: Basic Books, 1984. x, 293 pp. $22.95. ficial face predominates. The undesirable side of unions is the monopoly face, which enables unions to raise wages above the competitive level. The desirable side is the collective voice-institutional response face, which enables unions to channel worker discontent into improved workplace con- ditions. The empirical evidence consists of new sets of data on workers, firms, and other actors in the industrial relations sys- tem that the authors, their students and colleagues, and other scholars have ana- lyzed during the last decade. One example of the empirical analysis concerns the union impact on relative wages. F & M conclude that union workers earned about 30 percent more than com- parable nonunion workers in 1980, the largest such advantage since the depression and one that could not be sustained in the 1980s, as witness the negotiated give-backs in recent years. The monopoly face of unions stresses the loss of economic effi- ciency resulting from such union wage advantages, but F & M find the loss in 1980 was only 0.2 percent of GNP. Moreover, F & M also note the salubrious conse- quences of the union relative wage impact, such as substantially reducing the inequal- ity of wages among the overall workforce by about 3 percent. The main thrust of the F & M analysis is Industrial and Labor Relations Review, Vol. 38, No. 2 (January 1985). © 1985 by Cornell University. 0019-7939/85/3802 $01.00

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