The Influence of Unionism Upon Earnings: Comment Richard A. Lester Richard A. Lester Princeton University Search for other works by this author on: Oxford Academic Google Scholar The Quarterly Journal of Economics, Volume 62, Issue 5, November 1948, Pages 783–787, https://doi.org/10.2307/1883472 Published: 01 November 1948

T HIS paper analyzes negotiated settlements over a 17-year period. The analysis uses annual data for manufacturing as a whole, for individual manufacturing industries, and for building construction as a special case. Various comparisons are made. The wagesettlement series for manufacturing is compared with increases in straight-time average earnings in manufacturing and the unemployment rate in manufacturing; settlements are also compared with earnings increases for individual manufacturing industries, suggesting some conclusions with respect to wage drift and the wage-price guidelines of the Kennedy and Johnson administrations. Likewise, settlements are compared for eleven manufacturing industries and construction, indicating the contrasts among them and the effects of changes in industry differentials upon the structure. Such comparison raises questions concerning the influences of the wage-price guidelines on negotiated increases in various types of industry beginning in 1962. Finally, negotiated increases in building construction are compared with such increases for manufacturing as a whole and with the relative unemployment rate for construction workers, indicating disparate developments and the consequent pressures on negotiations in manufacturing, especially the mass production industries.

ECONOMISTS who have made detailed comparative studies of wage rates within a plant or between plants in the same labormarket area are struck by the haphazard variations in such rates and by the irrationality of many intraplant and interplant differentials in wages.2 Actual wage facts seem contrary to what one might expect according to conventional wage theory. Demand and supply do not eliminate gross inequities or gross irrationality.3 Perfect competition seems to be the exception rather than the rule. Movement in response to varying rates does not take place even in the same locality. One of the most significant facts about wage rates is their variation for the same job in the same labor market.4 Instead of a single rate for the same work, there is usually a band or zone of rates ranging from the lowestto the highestpaying employer in a community. The wide diversity in plant wage levels in the same labormarket area is strikingly indicated by the local surveys made by the U. S. Bureau of Labor Statistics in I943 and I944 in order to establish, by occupational groups and labor-market areas, brackets of sound and tested going rates.