Labor Relations Process 11th Edition Holley Solutions Manual

Labor Relations Process 11th Edition
Holley Solutions Manual

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CHAPTER 7
Economic Issues
Outline
I. Economic Issues
a. Industrial Wage Differentials
i. Competition in the product market
ii. Value added by employees
iii. Labor costs as a percentage of total costs
II. Occupational Wage Differentials and the Role of Job Evaluation and Wage Surveys
a. Evaluating jobs within the Organization
i. Job factors
ii. Job analysis
iii. Job description
iv. Job specification
b. Union Perspectives
i. Wage structures (Exhibit 7.1)
c. Surveys to Compare Firms’ Wage Structures
i. Results from wage survey (Exhibit 7.2)
d. Production Standards and Wage Incentives
i. Production standards
e. Typical Contract Provisions
i. Piece rate
ii. Hourly wage rate
iii. Profit-sharing plans
iv. Gain sharing plan
v. Scanlon plan
vi. Rucker plan
vii. Improshare plan
viii. Skill-based pay (SBP)
f. Wage-Setting Criteria: Arguments Used by Management and Union Officials in
Wage Determination
i. Factors to bolster wage claims
ii. Living wage ordinances
III. Differential Features of the Work: Job Evaluation and the Wage Spread
i. Wage spread (Exhibit 7.3)
ii. Skill pay differential
a. Two-Tier Wage Plans (Exhibit 7.4)
b. Wage Comparability
i. Wage Comparability Across Organizations
1. Wage comparability
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2. Degree of labor intensiveness
c. Wage Comparability within Organizations
i. Me-Too clause
d. Ability to pay
i. Reasons for wage determination
e. Productivity
i. Labor productivity (Exhibit 7.5)
f. Problems with Productivity Sharing
g. Effect of Unions on Productivity and Efficiency
i. Reasons for higher union productivity
ii. Productivity vs higher labor costs
h. Cost of Living
i. Consumer price index
i. Wage Adjustments during the Term or Duration of the Labor Agreement
i. Cost-of-living adjustment (COLA)
ii. Deferred wage increase
iii. Wage re-opener clause
j. Cost-of-Living Adjustments
i. Selection of the particular price index and base point.
ii. Frequency and timing of the wage adjustment.
iii. COLA formula.
iv. Effect of COLA on other elements of the compensation package.
v. “Caps.”
k. Deferred Wage Increases
i. Back-loaded contract
ii. Front-loaded contract
iii. Even-loaded contract
l. Wage Re-Opener Clauses
m. Lump-Sum Pay Adjustments
IV. Employee benefits

i. Employer cost per hour (Exhibit 7.6)
a. Insurance and Health Benefits
b. Health Care Cost Containment
i. Patient Protection and Affordable Care Act
ii. Preferred provider organization plan (PPO)
iii. Health Maintenance Organization (HMO)
iv. High deductible health care plans (HDHCP)
c. Income Maintenance
i. Severance pay
ii. Supplemental unemployment benefit plan (SUB)
d. Severance Pay
e. Supplemental Unemployment Benefits
i. Work sharing
f. Premium Pay—Overtime and Other Supplements
i. Premium pay
ii. Overtime premium pay rates
iii. Shift differentials
iv. Reporting pay
v. Call-in pay
g. Pay for Time Not Worked---Holidays, Vacations, and Rest Periods
h. Pensions
i. Age Discrimination in Employment Act (ADEA)
i. Common Types of Pension Plans
i. Defined benefit pension plans
ii. Defined contribution pension plan
iii. 401(k) plan
iv. Employee stock ownership plan (ESOP)
v. Preliminary conclusions
vi. Pension Protection Act of 2006 (PPA)
vii. Cash balance plan
viii. Early retirement options
ix. Vesting
x. Employee Retirement Income Security Act of 1974 (ERISA)
xi. “Cliff” vesting schedule
xii. “Graded” vesting schedule
xiii. Elective deferrals
xiv. Matching contributions
j. Family and Child-Care Benefits
i. Family and Medical Leave Act (FMLA) of 1993
V. Other Benefits
i. Prepaid legal service plans
ii. Employee assistance plans (EAP)
iii. Wellness programs
iv. Education tuition aid
v. Transportation subsidy
vi. Child-care assistance
vii. Subsidized home computer
VI. Union Effects on Wages and Benefits

i. Union-nonunion wage differential (Exhibit 7.7)
ii. Spillover effect
Discussion Questions
1. List the main factors that may help to explain the wage differential between two different
jobs in an organization with which you are familiar.
Students will probably select a large variety of jobs; however, the factors that help to
explain wage differentials should include:
 competition in the product market
 value added by employees
 labor costs as a percentage of total cost
 job evaluation
 comparable wages
 ability to pay
 productivity
 cost of living
2. Explain why job evaluation plans must take into consideration external and internal factors if
they are to be successful.
If the wages paid to employees must be sufficient for the company to recruit, reward, and
retain employees, the wages must be competitive with and comparable to other firms.
Establishing equity, comparability, and an appropriate reward structure depends on
accurate consideration of internal and external factors.
3. Assume that labor and management are negotiating a labor agreement and the wage spread
becomes an issue of disagreement—management wants a wider wage spread, and the union
wants a smaller wage spread. Why should management be cautious about the union's
proposal, even though the total costs may be the same?
Management usually wants a wider spread for several reasons:

 It allows greater flexibility in the wage plan.
 It provides employees who are promoted with a reward greater than the previous
wage.
 A greater spread generally enables management to assign wage rates in closer
approximation to the value of the jobs.
 A small wage spread tends to provide wages to workers without much consideration
of their contribution and relative value.
4. Which party (union or management) would likely be in a stronger position to bargain for its
preferred wage outcome under the following conditions and why?
a. High profits, an expanding market share, a healthy economy, and the cost of living rising
at less than 2 percent per year.
b. Low profits, stagnant sales growth, uncertain economic conditions, and a projected 4
percent annual rise in cost of living.
a. Unions will emphasize the following:

 Wage Comparability: Always
 Ability to Pay: Share in profits, based on contribution
 Productivity: Expected gains from past contribution
 Cost of Living Inflation rate adjustment: To start with—just to keep up
Management may counter by stating that:
 Past performance (profits) may not be a good indicator of future performance.
 Productivity improvement may be the result of capital spending on new technology
and future productivity gains may be uncertain.
 Cost of living trends, like profits are based on prior conditions which may not
accurately reflect future inflation estimates.
b. Unions will focus on:

 Wage Comparability: Always
 Ability to Pay: Low profits not workers' fault
 Productivity: Low productivity due to poor management decisions
 Cost of Living: Should have guaranteed cost of living adjustments
Management may counter by stating that:

 Low profits do not allow wage increases.
 Productivity increases are questionable.
 Future cost of living is unpredictable.
5. Assuming that a firm’s costs for employee benefits are 38 percent of payroll, why doesn’t
the firm just let the union determine the manner in which the amounts are apportioned to
various benefits, such as insurance, holidays, and vacations, without negotiating each
specific clause?
This approach is called the "cafeteria-style" or "smorgasbord" approach to employee

benefits and accommodates the individual preferences of employees. Some companies have
moved toward this approach as a way to gain labor-management cooperation.
Placing the responsibility on the union to determine the composition of the employee benefit
package would cause more work and coordination by the union leaders who are usually
already overextended.
Also, the company may tie the benefit program of non-bargaining unit employees to the
benefits in labor agreements covering bargaining unit members. More flexibility in
determining benefit preferences may result in additional administrative work necessary to
maintain proper records.
Don't forget that some benefits are mandated, like Social Security Benefits (FICA taxes),
unemployment benefits, worker's compensation, which is about 9 percent of payroll costs
and growing.
The company may not want to allow too much flexibility, especially time off for holidays,
vacations, etc. because it may have an adverse effect on work scheduling and product
delivery plans.
6. Which type of pension plan would you prefer to be covered under (i.e., defined benefit,
defined contribution, or cash balance) and why, if you were an employee? An employer?
Employers are typically concerned about the cost of a pension plan while employees are
concerned about the value and security of pension plan benefits. Employers may prefer a
defined contribution plan since it shifts the investment risk to the employees. Employees who
are risk takers and competent to manage their own investments may prefer the defined
contribution plan. An employee with little seniority who expects to change jobs within five
years might prefer a cash balance plan. An employee with higher seniority who does not feel
qualified to manage his or her own investments might prefer a defined benefit plan. Any
employee concerned about minimizing risk and ensuring a stable retirement income might
prefer a defined benefit plan.
7. To what extent can a union exploit benefit issues (e.g., health care insurance, pension, child-
care benefits, and family leave) in an effort to organize more union members? Explain your
reasoning.
To the extent a union can demonstrate to unrepresented employees that it has been
successful in obtaining such benefits in union contracts for other similar employees the
union represents, this can provide an important organizing issue for a union. Such benefits
are particularly desirable in a labor force having a high proportion of women, single
parents, or employees with pre-teen children or parents for whom they provide care. To the
extent a nonunion employer had taken steps to effectively address the child-care and family
leave concerns of current employees, any possible union advantage regarding these issues is
minimized or eliminated.
8. What type of control should an employee have over shares issued under an employee stock
ownership plan? For example, should an employee have a right to sell their plan shares at
any time or vote those shares in shareholder meetings to elect board of director candidates or
approve a merger or bankruptcy plan?
Many ESOP plans, particularly those in nonunion firms designed and implemented by
management, hold employee shares in trust for the employee and do not permit the employee
to exercise voting rights of such shares that might affect Company policies (e.g., election of
members of the Board of Directors, size and frequency of dividend payments to
shareholders, etc.). If the goal of management is greater employee involvement or work
motivation, then voting rights should be provided. If management's goal is to use ESOP
funds as a relatively inexpensive source of internal capital funds or as a form of wage or
pension plan, then employee voting rights would not be necessary to accomplish
management's goal.
9. Is early retirement (prior to age 62) still a realistic option for most employees to achieve
without experiencing a substantial decline in their preretirement standard of living?
Early retirement without experiencing a substantial decline in their preretirement standard

of living is not a realistic option for most employees because:
1. Retirement plans are not keeping pace with rising living costs.
2. Many employees have a negative personal savings rate and a high level of consumer debt
that makes investing in their pension account difficult.
3. During periods of economic stress, employers often suspend discretionary company
matching contributions to employee 401(k) plans as a cost savings measure, reducing
eventual payout.
4. Employers may discontinue medical benefits or raise coverage costs for retirees.
5. Employers are shifting to defined contribution plans which have no guaranteed levels of
payout as did traditional defined benefit plans.
Exploring the Web
Economic Issues
1. Sources of Economic Data: Bureau of Labor Statistics
2. National Compensation Survey
3. Occupational Pay Relatives (OPR)
4. International Labor Organization
Students should use an internet search engine (e.g., Google) to locate the relevant web pages for
these exercises. Specific URL address links for the exercises are not listed because they are
rendered nonfunctional when link-associated web sites and pages are updated.
Suggested Readings and Term Paper Topics

1. What do you think the future will hold in terms of fringe benefits? What will be a
popular new type of fringe benefit for the upcoming decade? Justify your positions.
Possible references:
Emanuele, R. (2000). Corporate culture in the nonprofit sector: A comparison of fringe benefits with the
for-profit sector. Journal of Business Ethics, 24, (1), 87-94.
Offen, T. (2000). Loading up with fringe benefits, Chartered Accountants Journal of New
Zealand, 79, (6), 62.
Ratcliffe, C. (2004). The economics of work and family. Industrial & Labor Relations Review, 57, 2, 305-
307.
2. Are "worker sabbaticals" a good idea? Why or why not?
------- (2000). Adjust Work Arrangements to Entice, Retain Professionals. ENR, 244, (1), 67.
Coleman, G. (1999). Someone get the phone--I'm on sabbatical. Journal of Environmental Health, 62, (4),
4-6.
Halcrow, A. (June, 1989). Sabbaticals in tandem with needs. Personnel Journal, 68, (6), 19-20.
Little, K. (1989). The Baby Boom generation: Confronting reduced opportunities. Employment Relations
Today, 16, 57-63.
3. Analyze the current state of corporate pension funds. Is there a crisis? If so, who is to
blame? If not, what is being done right? What are the implications of the current state
of pension funds for workers? For labor-management relations? What are your
recommendations?
-------- (April 3, 2004). House Backs Temporary Relief On Companies' Pension, The New York Times, C2,
col 05.
Bruce, S. R. (1988). Pension claims: Rights and obligations. Washington, D.C.: BNA Books.
Dorsey, S., & Turner, J. (1990). Union-nonunion differences in pension fund investments and earnings.
Industrial and Labor Relations Review, 43, (5), 542-555.
Sacher, S.J., Gibbs, J.L., and Shapiro, H. (Eds.)(1991). Employee benefits law. Washington, DC: BNA
Books.
4. In the 1980s and 1990s, it was not uncommon for managers to take steps to "cut labor
costs." Some of these steps included: negotiating lower wages, closing “'inefficient”
(unionized) plants, and implementing two-tier wage systems. Many unions have argued
that these requests are merely anti-union ploys. In response to such requests, they have
asked to "see the books." Managers hesitate to give unions such financial information.
Should they?
------- (1993). Delta cuts not just anti-union ploy. The Atlanta Journal the Atlanta Constitution, pg. A18.
Morishima, M. (Winter, 1991). Information sharing and firm performance in Japan. Industrial Relations,
30, (1), 37-61.
O'Reill, J. T. and Simon, G. P. (1980). Unions’ rights to company information. Philadelphia, PA: U. of
Pennsylvania Press.
Jacoby, S. M. (2004). Employing bureaucracy : Managers, unions, and the transformation of work in the
20th century. Mahwah, N.J. : Lawrence Erlbaum.
5. Agree or disagree: "Companies in severe financial hardship should be able to use

bankruptcy laws to seek relief from all financial obligations, including existing labor-
management contracts."
-----(June 17, 1985). Bankruptcy no longer an escape from union contracts. U.S. News & World Report, 78-
80.
Galen, M. (January 25, 1993). A new page for Chapter 11 ? Business Week, No. 3302, 36-37.
Smith, M., & Pulliam, M. (October 11, 1983). Congress wrote Continental's Ticket. The Wall Street
Journal, 202, 30.
Wren, J., & Murrmann, K. (Summer, 1990). Chapter 11 and collective bargaining agreements. Employee
Relations Law Journal, 16, 17-27.
6. Agree or disagree: The minimum wage law actually hurts U.S. labor.
-----(March 2003). Study shows minimum wage law hurting businesses. Everett Business Journal, 6, 3, A3.
Basu, K. (2000). The intriguing relation between adult minimum wage and child labour. The Economic
Journal, 110, (462), C50, 12 pgs.
Wimmer, B. (2000). The minimum wage and productivity differentials. Journal of Labor Research, 21, (4),
649-669.
7. Should there be a separate, lower minimum wage for teenagers? Why or why not?
Support your position.
-----(March 2003). Study shows minimum wage law hurting businesses. Everett Business Journal, 6, 3, A3.
Burkhauser, R. (2000). Who minimum wage increases bite: An analysis using monthly data from the SIPP
and the CPS. Southern Economic Journal, 67, (1), 16-41.
Neumark, D. & Wascher, W. (1992). Employment effects of minimum and subminimum wages:
8. Some union leaders negotiate higher wages for employees who must work night shift.
Others are opposed to management asking people to work such shifts. Argue for or
against the operation of night shifts.
Bohle, P. (1998). Early experience of shiftwork: Influences on attitudes. Journal of Occupational and
Organizational Psychology, 71, 61-80.
Folkard, S., & Monk, T. H. (Eds.) (1985). Hours of work. NY: Wiley.
Higgs, V. (2000). Learn the rhythm of the night (shift). Nursing, 30, (5), pg. HN14, 2 pgs.
307.
9. What is the "Urban Informal Sector"? What are the prospects for unionizing this
sector of the economy? What, if any, government actions should be taken to address
worker concerns in this economic sector?
Bromley, R. (Ed.) (1979). The urban informal sector: Critical perspectives on employment and housing
policies. Oxford: Pergammon Press.
Harrod, J. (1987). Power, production, and the unprotected worker. New York: Columbia University Press.
Portes, A. Castells, M., & Benton, L. A. (Eds.) (1989). The informal economy: Studies in advanced and less
developed countries. Baltimore: Johns Hopkins University Press.
Sanyal, B. (1991). Organizing the self-employed: The politics of the urban informal sector. International
Labour Review, 130, (1), 39-57.
10. How have compensation issues and labor relations in meatpacking changed in the last
30 years? What strategies do you recommend for union leaders?
Brueggemann, J. and Brown, C. (2003). The decline of industrial unionism in the meatpacking industry:
event-structure analyses of labor unrest, 1946-1987. Work and Occupations, 30, 3, 327-61.
Goldoftas, B. (Summer, 1989). Inside the slaughterhouse. Southern Exposure, 18, 27-30.
Zieren, G. R. (1989). A century of meatpacking and packinghouse labor in Chicago. Annals of lowa, 49,
692-709.
11. Freeman and Medoff argue that unionized workers are more productive than non-
unionized workers. Why? Others have criticized their conclusions. Do you believe
unionized workers are more productive than nonunionized workers? Support your
arguments.
Freeman, R. B., & Medoff, J. L. (1984). What do unions do? NY: Basic Books.
Hiatt, J. (1997). Union survival strategies for the twenty-first century. Journal of Labor Research, 18, (4),
487-502.
Nissen, B. (2003). The Recent Past and Near Future of Private Sector Unionism in the U.S.: An Appraisal.
Journal of Labor Research, 24, 2, 323-38.
12. What are the advantages and disadvantages of HMO's (Health Maintenance
Organizations) relative to traditional medical insurance? If you were a union president,
which type of coverage would you seek for union members?
Possible reference:
Halverson, P. (2000). Working together? Organizational and market determinants of collaboration between
public health and medical care providers. American Journal of Public Health, 90, (12), 1913-1917.
Luft, H. S. (1985). Health Maintenance Organizations: Dimensions of performance. New Brunswick, NJ:
Transaction books.
Sacher, S. J., Gibbs, J. L., and Shapiro, H. (Eds--1991). Employee benefits law. Washington, DC: BNA
Books.
13. Should companies offer day-care facilities or child-care allowances as fringe benefits?
Should labor unions seek such fringe benefits? Why or why not?
Auerbach, J. (1990). Employer-supported child care as a woman-responsive policy. Journal of Family
Issues, 11, 384-400.
Marshner, C. (1990). Can motherhood survive? Brentwood, TN: Wolgemuth & Hyatt.
307.
14. What effect do unions have on wages and benefits? (That is, compare the union and
non-union sectors of the economy.) Are unionized firms more profitable or less
profitable than their nonunion counterparts within the same industries?
Belman, D. L., & Voos, D. B. (1993). Wage effects of increased union coverage: Methodological
considerations and new evidence. Industrial & Labor Relations Review, 46, 368-380.
Blackflower, D. G., & Freeman, R. B. (1992). Unionism in the United States and other advanced OECD
countries. Industrial Relations, 31, 56-79.
Neumark, D. and Adams, S. (2003), Detecting effects of living wage laws. Industrial Relations, 42, 4, 531-
564.
15. Several contracts now contain "two-tier" wage clauses, where new workers will begin
working with substantially lower wages than present new employees. Do you believe
that these clauses are temporary concessions, or do they mark some sort of
fundamental shift in labor relations? Support your position.
Townsend, A. (1999). Revisiting multi-tier wage structures: Equity, employment mobility, and tier effects.
Journal of Labor Research, 20, (4), 605-619.
16. Does Human Capital Theory explain lower earnings of African Americans relative to
Caucasians? Does another theory do a better job of explaining the earnings ratio?
Support your position.
Becker, G. (1964). Human Capital: A theoretical and empirical analysis. Princeton, NJ: Princeton
University Press.
Crawford, R. D. (1991). In the era of human capital. NY: Harper.
Guthrie, J. (2000). Alternative pay practices and employee turnover: An organization economics
perspective. Group & Organization Management, 25, (4), 419-431.
Kiefer, D., & Philips, P. (1988). Doubts regarding the Human Capital Theory of racial inequality,
Industrial Relations, 27, 251-269.
17. Should wages be tied more to seniority or performance? Support your position.
Abraham, K. G., & Farber, H. S. (1987). Job duration, seniority, and earnings. American Economic Review,
77, 278-297.
Gerhart, B., Milkovich, G. T., & Murray, B. (1992). Pay, performance, and participation. In D. Lewin, O.
S. Mitchell, and P. D. Sherer (Eds.) Research frontiers in industrial relations and human resources.
Madison, WI: Industrial Relations Research Association.
Cardoso, A. (1999). Firms' wage policies and the rise in labor market inequality: The case of Portugal.
Industrial & Labor Relations Review, 53, (1), 87-103.
18. Is pay a motivator? What role do unions play in the relationship between money and
productivity (if any)?
Lawler, E. E. m (1990). Strategic pay: Aligning organizational strategies and pay systems. San Francisco:
Jossey-Bass.
Lindgren, H. C. (1991). The psychology of Money. Melbourne, FL: Krieger Publishing.
Rollins, T. (1989). Productivity-based group incentive plans: Powerful, but use with caution. Compensation
and Benefits Review, 21, (3), 39-50.
19. What is gainsharing? How does it work? Is this an idea that unions should embrace?
Or should they be suspicious of gainsharing systems?
D'Camp, K. A., Ferracone, R. A. (Sept. 1989). Spot gain sharing provides high-impact incentives.
Personnel Journal, 68, (9), 84-88.
Kaufman, R. T. (1992). The effects of improshare on productivity. Industrial and Labor Relations Review,
45, 311-322.
Moore, B. G. and Ross, T. L. (1990). Gainsharing: Plans for improving performance. Washington, D.C.:
BNA Books.
Thornicroft, K. W. (1991). Promises kept, promises broken: Reciprocity and the Scanlon plan. Employee
Relations, 13, (5), 12-21.
20. What effect do unions have on corporate profitability? What effect do they have on the
attractiveness of a company as an investment opportunity (if any)?
Becker, B. E., & Olson, C. G. (1992). Unions and farm profits. Industrial Relations, 31, 395-415.
Brunello, G. (1992). Effect of unions on firm performance in Japanese manufacturing. Industrial & Labor
Relations Review, 45, 471-487.
Gittell, J.H., Nordenflycht, A. V., and Kochan, T.A. (2004). Mutual Gains or Zero Sum? Labor Relations
and Firm Performance in the Airline Industry. Industrial & Labor Relations Review, 57, 2, 163-180.
21. Why do firms give raises when unemployment levels are high and people are willing to
work for less money? Phrased another way: Why doesn't supply-demand theory work?
What role do unions play in this process? Support your arguments.
Dorman, P. (1998). Wage compensation for dangerous work revisited. Industrial & Labor Relations
Review, 52, (1), 116- 136.
Freeman, R. B., & Medoff, J. L. (1984). What do unions do? NY: Basic Books.
Lewin, D., Mitchell, O. S., & Sherer, P. D. (Eds.) (1992). Research frontiers in industrial relations and
human resources. Madison: Industrial Relations Research Association.
Thurow, L. C. (1980). The zero-sum society. NY: Basic Books.
22. Should states give or deny unemployment benefits to striking union members?
Hutchens, R., Lipsky, D., & Stern, R. (1992). Unemployment insurance and strikes. Journal of Labor
Research, 13, 337-354.
Muckenberger, U. (1990). The regulation of strike law in times of new technology and deregulation: The
case of West Germany. Industrial Relations, 45, 136-145.
Weaver, C. S. (1988). Should workers be paid to strike? Personnel Administrator, 33, (6), 108112. The
Brookings Institute.
23. Should the minimum wage be changed? Should minimum wage laws be changed? If so,
how? Support your position.
Card, D. (1992). Do minimum wages reduce employment? A case study of California, 19871989.
Industrial & Labor Relations Review, 46, 38-54.
Engdahl, R. A., & Keating, R. J. (June, 1989). End the minimum wage debate: revise the concept itself.
Employee Responsibilities and Rights Journal, 2, (2), 141-144.
Katz, L. F., & Krueger, A. B. (1992). Effects of the minimum wage on the fast-food industry. Industrial &
Labor Relations Review, 46, 6-21.
24. How do "informal information networks" affect employment? What role do they play
within the field of labor economics?
Rees, A. (May, 1986). Information networks in labor markets. American Economic Review, 56. Also
reproduced in: Reynolds, L. G., Masters, S. H., & Moser, C. H. (Eds.) (1986). Readings in labor economics
and labor relations, fourth edition. Englewood Cliffs, NJ: Prentice-Hall, 60-65.
Maas, J. (1998). Information for Innovation: Managing Change from an Information Perspective. Sloan
Management Review, 40, (1), 105-107.
Macdonald, S., Williams, C. (1992). The Informal Information Network in an Age of Advanced
Telecommunications. Human Systems Management, 11, (2), 77-88.
Weilgosz, J. B., & Carpenter, S. (1987). The effectiveness of alternative methods of searching for jobs and
finding them: An exploratory analysis of the data bearing upon the ways of coping with joblessness.
American Journal of Economics and Sociology, 46, 151-164.
25. Imagine that you were charged with writing a report for the AFL-CIO. Your report is
to offer guidance on whether workers and/or the unions should buy out (i.e., own) their
factories or companies (usually through Employee Stock Option Plans--ESOPs). If they
shouldn't, explain why not. If they should, explain why and under what circumstances.
Dilts, D. A., & Paul, R. J. (1990). Employee ownership of unionized firms: Collective bargining or
codetermination? Business & Society, 29, 19-27.
McElrath, R. G., & Rowan, R. L. (1992). The American labor movement and employee ownership:
Objections to and uses of Employee Stock Ownership Plans. Journal of Labor Research, 13, 99-119.
Handel, M.J. and Gittleman, M. (2004). Is there a wage payoff to innovative work practices? Industrial
Relations, 43, 1, 67-97.
26. What role do unions play in failing organizations? What role should they play?
Kim, D. (1996). Factors influencing organizational performance in gainsharing programs. Industrial
Relations, 35, (2), 227-245.
Martin, R. (1993). The new behaviorism: A critique of economics and organization. Human Relations, 46,
(9), 1085- 1102.
Meyer, M. W., and Zucker, L. G. (1989). Permanently failing organizations. Newbury Park: Sage.
27. Do unions increase productivity? Or decrease productivity?
Campbell, N., & Vousden, N. (2000). Import competition and worker productivity in unionized firms.
Review of International Economics, 8, (2), 193-207.
Chezum, B. & Garen, J. E. (1998). Are union productivity effects overestimated? Evidence from coal
mining. Applied Economics, 30, 913-918.
Zavodny, M. (1999). Unions and the wage-productivity gap. Economic Review - Federal Reserve Bank of
Atlanta, 84, (2), 44-53.
28. How have labor unions reacted to innovations in compensation and benefits? For
example, do unions support gainsharing?
Ceniceros, R. (May 17, 1999). Employers defend alternative comp programs. Business Insurance, 33, (20),
pp. 1 & 15.
Fottler, M. D., Johnson, R. A. McGlown, K. J., & Ford, E. W. (Spring, 1999). Attitudes of organized labor
officials toward health care issues: An exploratory survey of Alabama labor officials. Health Care
Mericle, K., & Dong-One, K. (1999). From job-based pay to skill-based pay in unionized establishments: A
three-plant comparative analysis. Relations Industrielles, 54, (3), 549578.
307.
29. Do unions increase economic development (and worker prosperity) when they form in
relatively underdeveloped areas? Or do they have adverse effects on economic
development and the poor?
Deyo, F. C. (Feb., 1997). Labor and post-fordist industrial restructuring in East and Southeast Asia.
Workand Occupations, 24, 97-119.
Faini, R. (1999). Trade unions and regional development. European Economic Review, 43, 457474.
Hirsch, B. T., & Schumacher, E. J. (1998). Unions, wages, and skills. The Journal of Human Resources,
33, 201-219.
564.
30. What is the relationship between labor unions and health care benefits? Within this
general question, you might address any of the following more specific questions: Do
unions typically secure a particular type of health care benefit? Do unions help control
health care costs? Do unions favor a particular type of health care reform?
Fottler, M. D., Johnson, R. A. McGlown, K. J., & Ford, E. W. (Spring, 1999). Attitudes of organized labor
officials toward health care issues: An exploratory survey of Alabama labor officials. Health Care
Gray, G. R. (May, 1998). Collective bargaining agreements: Safety and health provisions. Monthly Labor
Review, 121, (5)13-36.
Jones, C. (July, 1999). The union label. Life Association News, 94, (7), 106- 114.
Lippman, H. (1997). Labor and managed care: An uneasy alliance. Business and Health, 15, (6), 42-48.
31. Do unionized workers earn more money or benefits than similarly situated workers in
nonunion firms in the same industry?
Easton, T., & King, M. C. (Feb., 2000). Differences in wage levels among metropolitan areas: Less-
educated workers in the United States. Regional Studies, 34, (1), 21-27.
Hirsch, B. T., & Schumacher, E. J. (1998). Union wages, rents, and skills in health care labor markets.
Journal of Labor Research, 19, 125- 147.
Kahn, L. M. (Nov. 2000). Wage inequality, collective bargaining, and relative employment from 1985 to
1994: Evidence from fifteen OECD countries. The Review of Economics and Statistics, 82, (4), 564-579.
Wunnava, P. V., & Ewing, B. T. (1999). Union-nonunion differentials and establishment size: Evidence
from the NLSY. Journal of Labor Research, 20, 177-183.
32. What are "Taft-Hartley Plans”? How do they work? How do they differ from
traditional plans?
Fulman, R. (April 3, 2000). Seven union plans join fund. Pensions & Investments, 28, (7), 38-39.
Fulman, R. (Sept. 6, 1999). Taft-Hartleys commit to privaty equity fund that helps small firms. Pensions &
Investments, 27, (18), 53-54.
Ghilarducci, T. & Kevin, T. (1999). Scale economies in union pension plan administration: 198 1-
1993.Industrial Relations, 38, (1), 11-17.
Goebel, B. F. (Summer, 2000). Taft-Hartley plans: Thriving in a new economy. Compensation & Benefits
Management, 16, (3), 17-23.
33. Some union-owned pension plans now allow workers to direct how their money should
be invested. How do these plans work? How do they compare to traditional 401(k) or
403(b) plans? How do they compare to other types of corporate "defined contribution"
plans? What unique challenges do these plans pose for unions?
Jacobs, A. (June 26, 2000). Union members getting a say in directing assets. Pensions & Investments, 28,
(13), 38-43.
St. Goar, J. (Dec., 1999). Labor gains. Institutional investor, 33, (12), 125-126.
Williams, F. (Mar. 23, 1998). Segal aims to help unions start 401(k)s. Pensions & Investments, 26, (6), 41-
42.
34. Some communities have passed "living wage" legislation? What is this? How does it
compare to the "minimum wage"? Are these laws a good development for public sector
workers and contractors doing business with the government? Or a bad idea? Should
they be applied to all businesses in a community? Why or why not?
Cleeland, N. (Mar. 4, 1999). Unions Fight to Lift Pay for LAX Workers; Labor: Despite a city ordinance,
many are still denied a 'living wage.' Organizers are trying to change that. The Los Angeles Times, 1.
Spector, A. (July 24, 2000). Operators dodge living-wage bullet, await insurance hike. Nation's Restaurant
News, 34, (30), 4-6.
564.
35. What are some current issues with pension funds, given the volatility of the stock
market?
Burr, B. B. (Sept. 18, 2000). AFSCME succeeds in first foray into activism. Pensions & Investments, 28,
(19), 38-40.
Byrnes, N. (June 5, 2000). GE's pension fund runneth over, so do tempers: Refusing to share more of the
riches with workers spark revolt. Business Week, No. 3684, 52.
Healy, B. (Nov. 28, 2000). Teamsters sue Cowen over pension fund loss: Losing stocks held too long, union
says. Boston [Mass.] Globe, D-7.
36. Unions often own large blocks of shares of stock in other companies. How do they use
this stock ownership to advance their own union's causes or the causes of organized
labor, generally? Should they use their stock ownership to pursue their union causes?
Or is such activism inappropriate?
Burr, B. B. (Sept. 18, 2000). AFSCME succeeds in first foray into activism. Pensions & Investments, 28,
(19), 38-40.
Lubin, J. S. (May 17, 1996). Unions brandish stock to force change. Wall Street Journal, pg. B-1.
Schwab, S. J., & Thomas, R. (1998). Realigning corporate governance: Shareholder activism by labor
unions. Michigan Law Review, 96, (4), 1018-1094.
37. Many American workers are employed by staffing agencies. What benefits do these
contingent workers earn compared to typical employees? What are the implications of
this trend for society? Should new legislation be passed at the state or federal level?
Why or why not?
Grimsley, K. D. (May 24, 2000). Temporary Workers Exploited, Group Says; [FINAL Edition]. The
Washington Post, E-1.
Helm, L. (June 4, 1999). TECHNOLOGY; 16 Microsoft Temps Organize Into Bargaining Unit; Labor:
Group hoping for improved benefits signs a petition seeking representation by local union. [Home Edition];
The Los Angeles Times, pg. 3
Jacobsen, W. S. (Dec., 1999). Top 10 employee benefits issues for the year 2000. HR Focus, pgs. S 1- S4.
Lewis, D. E. (Dec. 26, 2000). A day at a time, and no stock plan: New economy doesn't reward labor pool
workers. Boston Globe, C- 1.
38. Write a paper on the relationship between unions and unemployment compensation.
You might examine the characteristics of typical Supplemental Unemployment Benefits
(SUBs) found in union contracts. Should union workers receive state unemployment
benefits when on strike?
Budd, J. W., & McCall, B. P. (1997). The effect of unions on the receipt of unemployment insurance
benefits. Industrial & Labor Relations Review, 50, 478-492.
Leef, G. C. (May 21, 1998). Help people; get government out of unemployment business; [Final Edition].
Detroit [Michigan] News, A-14.
Norris, F. (July 23, 1998). Did

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IV. Employee benefits

VI. Union Effects on Wages and Benefits

Management usually wants a wider spread for several reasons:

a. Unions will emphasize the following:

b. Unions will focus on:

Management may counter by stating that:

This approach is called the "cafeteria-style" or "smorgasbord" approach to employee

Early retirement without experiencing a substantial decline in their preretirement standard

Suggested Readings and Term Paper Topics

2. Are "worker sabbaticals" a good idea? Why or why not?

5. Agree or disagree: "Companies in severe financial hardship should be able to use

27. Do unions increase productivity? Or decrease productivity?

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