Principles of Microeconomics/Issues in Labor Markets: Unions, Discrimination, Immigration

Collective Bargaining in Wisconsin

In 2011, thousands of people crowded into the Wisconsin State Capitol rotunda carrying placards reading “Kill the Bill.” What were they protesting? The newly elected Wisconsin governor, Scott Walker, supported a bill proposed by Republican state legislators that would have effectively eliminated most collective bargaining rights of public sector union employees.

Collective bargaining laws require employers to sit down and negotiate with the representative union of their employees. The governor argued that the state needed to close a multi-billion-dollar deficit, so legislators proposed a Budget Repair Act that would eliminate collective bargaining over everything but wages. The bill passed and was signed into law after a significant level of drama that saw Democratic legislators leaving the state so that there would not be enough legislators in house to continue the debate or bring the bill to a vote. The law proved so unpopular that Governor Walker faced a recall vote in 2012. The recall attempt was defeated, but the law has been subjected to numerous court reviews. The discussion about the role of collective bargaining is not over.

Why was a bill like this proposed? Are collective bargaining rights necessary for public sector employees? How would an economist respond to such a bill? This chapter lays out the changing role of unions in U.S. labor markets.

Introduction to Issues in Labor Markets: Unions, Discrimination, Immigration

In this chapter, you will learn about: When a job applicant is bargaining with an employer for a position, the applicant is often at a disadvantage—needing the job more than the employer needs that particular applicant. John Bates Clark (1847–1938), often named as the first great American economist, wrote in 1907: “In the making of the wages contract the individual laborer is always at a disadvantage. He has something which he is obliged to sell and which his employer is not obliged to take, since he [that is, the employer] can reject single men with impunity.”
 * Labor Unions
 * Employment Discrimination
 * Immigration

To give workers more power, the U.S. government has passed, in response to years of labor protests, a number of laws to create a more equal balance of power between workers and employers. These laws include some of the following: [link] lists some prominent U.S. workplace protection laws. Many of the laws listed in the table were only the start of labor market regulations in these areas and have been followed, over time, by other related laws, regulations, and court rulings. This chapter covers three issues in the labor markets: labor unions, discrimination against women or minority groups, and immigration and U.S. labor market issues.
 * Setting minimum hourly wages
 * Setting maximum hours of work (at least before employers pay overtime rates)
 * Prohibiting child labor
 * Regulating health and safety conditions in the workplace
 * Preventing discrimination on the basis of race, ethnicity, gender, sexual orientation, and age
 * Requiring employers to provide family leave
 * Requiring employers to give advance notice of layoffs
 * Covering workers with unemployment insurance
 * Setting a limit on the number of immigrant workers from other countries