BOAL, W. M. (2017). THE EFFECT OF UNIONIZATION ON PRODUCTIVITY: EVIDENCE FROM A LONG PANEL OF COAL MINES. ILR Review, 70(5). Business Source Complete. https://doi.org/10.1177/0019793916682222
The Effect of Unionization on Productivity: Evidence From a Long Panel of Coal Mines by William M. Boal
Unionization in West Virginia Coal Mining
- History of Unionization
- “The 1920s brought a reversal of fortune to the UMWA in West Virginia (and elsewhere). In 1922, after a long national strike… those few mines that had signed a three-year contract with the union in 1924 had either shut down or broken the contract and deunionized. The state’s coal mines remained completely nonunion until the 1930s,” ( Boal 1258).
- Unions in the 1930s were formed through strikes rather than election, like it is today, making unionization tricky.
- “Nonunion coal operators often required employees to sign “yellow-dog contracts” (pledges not to join the union) as a condition of employment,” (Boal 1258).
- The coal mining industry was incredibly competitive. “In 1910, for example, 425 coal companies operated in West Virginia,” (Boal 1258)
- Unions in the 1930s were formed through strikes rather than election, like it is today, making unionization tricky.
- “The 1920s brought a reversal of fortune to the UMWA in West Virginia (and elsewhere). In 1922, after a long national strike… those few mines that had signed a three-year contract with the union in 1924 had either shut down or broken the contract and deunionized. The state’s coal mines remained completely nonunion until the 1930s,” ( Boal 1258).
Panel Estimates of the Effect of Unionization on Productivity
- Panel of West Virginia Coal Mines
- Data set for Table 1 is measured in the following ways
- “The strength of this data set is that it meets all four criteria for credible estimates, as discussed above: output is measured in physical units (tons), observations are from a single industry at a low level of aggregation (the mine), the data form a panel with many mines changing union status but not simultaneously, and the panel is long enough to detect changes in union effects over time,” (Boal 1262)
- Figure 2. Comparison of Sample and Total Population of WV Coal Mines
- “New mines had lower productivity because narrow entries and haulage ways were being driven to open the mine, a productivity difference reflected in higher piece wage rates… Coincidentally, new mines usually began operation as nonunion,” (Boal 1263)
- Data set for Table 1 is measured in the following ways
Explanations
- Shorter Daily Hours of Work under Unionization
- “Union mines worked about one hour, possibly two hours, less per day than nonunion mines until World War I, with some variation across the state. During World War I, the 8-hour day was adopted by ‘‘practically every bituminous coal mine in the United States,’’ union or nonunion, according to a nonunion operator source,”(Boal 1268)
- Before this, WV mine workers mined 10 hrs/day. Working hours fell during WWI, regardless of unionization, to 8 hr days (Figure 5)
- “Union mines worked about one hour, possibly two hours, less per day than nonunion mines until World War I, with some variation across the state. During World War I, the 8-hour day was adopted by ‘‘practically every bituminous coal mine in the United States,’’ union or nonunion, according to a nonunion operator source,”(Boal 1268)
- Restrictive Union Work Practices
- Operators complained about a range of practices imposed upon them by the UWMA
- Claim One: union mines closed frequently without valid pretexts, which decreased productivity
- “Days of operation do not seem to have been systematically lower under unionization, though they may have been more difficult for operators to control,” (Boal 1269).
- According to the author, the days of operation were only less than the national average during a year-long nationwide strike in 1922, and a significantly small amount between 1924 and 1925 when the nonunion wages were slightly lower than union wages
- “The estimated coefficients of the union 3 year interactions are positive from 1904 to 1920. A large negative value does occur for 1922, the year of a long nationwide strike, and smaller negative values occur for 1924 and 1925, when coal prices and nonunion wages had fallen but union wages had not,” (Boal 1269)
- “Days of operation do not seem to have been systematically lower under unionization, though they may have been more difficult for operators to control,” (Boal 1269).
- Claim Two: the union made it difficult to fire lazy or incompetent workers
- This claim does hold truth, though the author notes: “some operators did acknowledge that without the union, foremen occasionally abused their power and fired workers for petty reasons,” (Boal 1270)
- Claim Three: unionized workers intentionally limited output
- There is no significant evidence that this is true, and the author mentions that decreased output would have reduced the total earnings of the workers
- Claim One: union mines closed frequently without valid pretexts, which decreased productivity
- Operators complained about a range of practices imposed upon them by the UWMA
- Deteriorating Labor Relations under Unionization
- Strikes in the early 1910s may have “radicalized many rank-and-file union members, brought militants into leadership of District 17, and shifted the attention of the union to remaining nonunion fields where it was violently opposed. In effect, operators and unionists shifted from ‘‘cooperative’’ to ‘‘competitive’’ behaviors, with possible adverse consequences for productivity (Pohler and Luchak 2015). Moreover, it seems at least possible that when mines were deunionized in the 1920s, ill will and divisions persisted between miners and operators, and between strike breakers and unionists,” (Boal 1274)
- *mention this in relation to the negative connotation unions had when first being formed in the 1930s*
- Strikes in the early 1910s may have “radicalized many rank-and-file union members, brought militants into leadership of District 17, and shifted the attention of the union to remaining nonunion fields where it was violently opposed. In effect, operators and unionists shifted from ‘‘cooperative’’ to ‘‘competitive’’ behaviors, with possible adverse consequences for productivity (Pohler and Luchak 2015). Moreover, it seems at least possible that when mines were deunionized in the 1920s, ill will and divisions persisted between miners and operators, and between strike breakers and unionists,” (Boal 1274)
Conclusion
- “The single most plausible explanation for the relative decline in productivity at union mines is a sharp deterioration in labor relations after the violent Paint Creek-Cabin Creek strike of 1912–1913. Contemporary observers and scholars agree that this strike radicalized rank-and-file union members, brought militants into union leadership, and shifted the attention of the union away from everyday labor relations in the union fields to “mine wars” in the nonunion fields,” (Boal 1276)
- “Fixed-effects estimates show that the union had little effect on productivity before 1914, but thereafter it had a negative effect of 5 to 10%. Interestingly, this negative effect was not reversed when mines were later deunionized,” (Boal 1276)
Figures Referenced
