Declining Union Strength and Labor Cost Inflation in the 1980s



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    • *Department of Economics, University of Pennsylvania, and National Bureau of Economic Research. I am grateful to Gregory Crawford, Nathaniel Land, and Victoria Keeoleian for research assistance; and to Linda Bell, McKinley Blackburn, Jonathan Leonard, Janice Shack-Marquez, David Stockton, Sandy Struckmeyer, Robert Valletta, Wayne Vroman, David Wilcox, anonymous referees, and especially William Wascher for helpful comments.


This paper explores the hypothesis that the declining strength of labor unions underlies the moderation of labor cost inflation in the 1980s, which is not explained by standard Phillips curve equations. Data on union density, union certification and decertification election results, and work stoppages are used as proxies for union strength. No support is found for the declining union strength hypothesis at either the aggregate level (using economywide or union-sector labor cost series) or the industry level.