An Economic Theory of the Incidence and Growth of Trade Unionism


The theory of trade unions, why they are formed, why they grow
and their life cycle, has been discussed with decreasing frequency in
the economics literature in the past decade. This neglect was undoubt-
edly due to the quiescence of American unionism, both in established
unions and in areas of potential union growth. With the increased mil-
itancy of some unions, particularly those of professional employees,
and the unions’ continued emphasis on economic issues, economists still
have the task of explaining the reasons for union growth. In this
essay we examine the rapid increase in activity among organized profes-
sionals and test whether it can be explained by any existing theories of
the genesis of trade unions. We then formulate a general theory of
trade unions to explain the economic motivations for this militancy.
This theory has the virtue of being explicitly derived from the utility-
maximizing behavior of an individual worker; it is thus directly related
to certain strands of contemporary economic theory. The implications
of this new theory are then tested, and possible future loci of union
militancy are discussed.

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