Social & Education Policy

Unions, Strikes, and Labor's Share of Income: A Quarterly Analysis of the United States, 1949–1992

Wallace, M.; Leicht, K.T.; Raffalovich, L.E.
09/1999

Abstract

This paper examines a common assumption of much of the research on class relations in capitalist economies that workers' collective action improves the economic standing of the working class. Specifically, we utilize a quarterly, time-series analysis to test hypotheses about the impact of changes in union membership and strike activity on changes in labor's share and its three components—changes in employment, compensation, and net revenue—during the post-World War II U.S. economy. We examine these hypotheses during a period of transition in the capital–labor accord that has dominated the U.S. political economy since 1949. We identify three periods during the capital–labor accord—the peak, the transitional, and the post-accord periods—and anticipate changing effects of strike activity and union membership on labor share and its components in the different periods. Our results provide mixed support for the hypotheses, but generally confirm our expectations that trends in strike activity and union membership were more instrumental for impacting labor's share and its components as hypothesized during the peak period of the capital–labor accord and less instrumental in later periods. In the post-accord period, in particular, strikes and unions become virtually irrelevant for the economic standing of workers, a result that bespeaks the changing configuration of class relations in the postwar U.S. economy.