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Uncovered workers in plants covered by collective bargaining: Who are they and how do they fare?

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  • Hirsch, Boris
  • Lentge, Philipp
  • Schnabel, Claus
Abstract
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 percent 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.

Suggested Citation

  • Hirsch, Boris & Lentge, Philipp & Schnabel, Claus, 2022. "Uncovered workers in plants covered by collective bargaining: Who are they and how do they fare?," FAU Discussion Papers in Economics 02/2022, Friedrich-Alexander University Erlangen-Nuremberg, Institute for Economics.
    • Handle: RePEc:zbw:iwqwdp:022022
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    References listed on IDEAS

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    6. Hermann Gartner & Thorsten Schank & Claus Schnabel, 2013. "Wage Cyclicality Under Different Regimes of Industrial Relations," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 52(2), pages 516-540, April.
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    Cited by:

    1. Adrian Chadi & Laszlo Goerke, 2023. "Seeking shelter in times of crisis? unemployment, perceived job insecurity and trade union membership," Economica, London School of Economics and Political Science, vol. 90(359), pages 1041-1088, July.
    2. Theresa Geißler & Laszlo Goerke, 2023. "Educational Mismatch and Labour Market Institutions: The Role of Gender," Working Papers 2023.14, International Network for Economic Research - INFER.
    3. Marina Bonaccolto-Töpfer & Claus Schnabel, 2023. "Is There a Union Wage Premium in Germany and Which Workers Benefit Most?," Economies, MDPI, vol. 11(2), pages 1-14, February.
    4. Tom Günther & Ulrich C. Schneider & Fabian Stürmer-Heiber, 2023. "Working More for Less: Part-time Penalties Across the Working Hours Distribution?," Berlin School of Economics Discussion Papers 0025, Berlin School of Economics.
    5. Goerke, Laszlo & Huang, Yue, 2022. "Job satisfaction and trade union membership in Germany," Labour Economics, Elsevier, vol. 78(C).
    6. Bucher, Florian & Scheu, Lucas & Schröpf, Benedikt, 2022. "Economic complexity and environmental pollution: Evidence from the former socialist transition countries," Discussion Papers 124, Friedrich-Alexander University Erlangen-Nuremberg, Chair of Labour and Regional Economics.

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    More about this item

    Keywords

    collective bargaining; union wage; uncovered workers; Germany;
    All these keywords.

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J53 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Labor-Management Relations; Industrial Jurisprudence

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