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The Effect of Unions on Productivity in a Multinational Manufacturing Firm

Robert N. Mefford
ILR Review
Vol. 40, No. 1 (Oct., 1986), pp. 105-114
Published by: Sage Publications, Inc.
DOI: 10.2307/2523949
Stable URL: http://www.jstor.org/stable/2523949
Page Count: 10
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The Effect of Unions on Productivity in a Multinational Manufacturing Firm
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Abstract

This paper examines the effect of unions on productivity in 31 plants of a large multinational firm in the years 1975-82. The plants, 60 percent of which are unionized, all produce a similar line of products using material-intensive, labor-intensive, low-technology methods. Results obtained by estimating a translog production function indicate that unionization's overall effect on productivity is positive. Specific findings are that unionization increases the capital-labor ratio and improves management performance, but it also raises the absenteeism rate. A net positive effect on productivity remains even when these channels of union influence are controlled for, a result that, the author suggests, may reflect an improved labor relations climate or improved labor quality associated with unionization.

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