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Uncovered workers in plants covered by collective bargaining: Who are they and how do they fare?
Author(s) -
Hirsch Boris,
Lentge Philipp,
Schnabel Claus
Publication year - 2022
Publication title -
british journal of industrial relations
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.665
H-Index - 70
eISSN - 1467-8543
pISSN - 0007-1080
DOI - 10.1111/bjir.12679
Subject(s) - wage , collective bargaining , labour economics , disadvantaged , order (exchange) , hierarchy , economics , wage bargaining , efficiency wage , business , market economy , economic growth , finance
In Germany, employers used to pay union members and non‐members in a plant the same union wage in order to prevent workers from joining unions. Using recent administrative data, we investigate which workers in firms covered by collective bargaining agreements still individually benefit from these union agreements, which workers are not covered anymore and what this means for their wages. We show that about 9 per cent of workers in plants with collective agreements do not enjoy individual coverage (and thus the union wage) anymore. Econometric analyses with unconditional quantile regressions and firm‐fixed‐effects estimations demonstrate that not being individually covered by a collective agreement has serious wage implications for most workers. Low‐wage non‐union workers and those at low hierarchy levels particularly suffer since employers abstain from extending union wages to them in order to pay lower wages. This jeopardizes unions’ goal of protecting all disadvantaged workers.