De-Unionization and Macro Performance: What Freeman and Medoff Didn't Do

Freeman and Medoff's seminal book, What Do Unions Do?, covered the gamut of research on collective bargaining and its economic impact with one major exception. It had little to say about the macroeconomic impacts of unions. By the early 1980s, union representation in the private sector had been slipping relative to the size of the US work force for almost three decades. Gradual relative erosion had turned into dramatic absolute declines in union representation during the years immediately preceding the book's appearance. The political climate was unfriendly to unions in the 1980s. And product markets in sectors with relatively high union concentrations were reeling from such diverse forces as deregulation, an appreciating dollar, low-wage competition from abroad, etc. At the same time, union organizing, as measured, for example, by the number of NLRB representation elections, had fallen sharply. A reasonable hypothesis is that Freeman and Medoff looked to the future and saw union macro effects as yesterday's issue. A somewhat different view of the union-macro interaction is presented. It is pointed out that, although it may have seemed to Freeman and Medoff that no one going forward from the mid-1980s would be much worried about unions from a macro perspective, with hindsight it is known that wasn't entirely so.