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Depending on the correlation between factors associated with unionization and those associated with employment, output, and productivity, the observed correlation between union status and employer outcomes american flag alabama crimson tide football team crocband clog may overstate or understate the true effects of unions. Two competing phenomena may induce opposite selectivity biases. On the one hand, unions may tend to organize at highly successful enterprises that are more likely to survive and grow. On the other, a union organizing drive may be more likely to succeed when a firm is poorly managed, or has faced recent difficulties. Although many studies show a positive relationship between extent of unionization and union members’ wages, some analysts suggest that this relationship could reflect a concentration of labor organization in industries with potentially high wage gains,

rather than unions’ efficacy in raising wages. Consistent with that speculation, studies across occupations or geographic areas generally show a much weaker relationship between unionization and wages than do studies across industries. The criticism that has been advanced regarding the earlier empirical literature on the effects of union coverage cannot be dismissed out of hand. Most earlier studies have focused on inter-industry wage differences. The typically positive and significant coefficient on the union coverage variable in such studies may indeed reflect characteristics of industries that might be correlated with both union wages and unionization. The effect of labor organization itself is not isolated in such studies. There Is Big Variation in Industry-Level Union Wage Premia. F&M also found wide variation in industry-level premiums and might have expected this to persist because unions’ ability to push for a premium, and employers’ ability to pay, is determined by industry-specific factors .