Examining the Decline in Bargaining Power in Faculty Labor Unions in the United States: The Effects of Reduced Monopoly Power in Providing Public Higher Education

This study examines the decline in the economic power of faculty labor unions in public higher education in the United States in recent years. The authors assume the labor union is a utility maximizing entity and that income accrues to the “union family.” The union family attempts to maximize this income. By analyzing collective bargaining agreements and hiring practices between the Association of Pennsylvania State College and University Faculties and the Pennsylvania State System of Higher Education, the authors construct bargaining indices. Because this study is focused on the change in bargaining power of labor unions in public higher education over time, each index is constructed by looking at the ratio of the union annual income pay scale from the collective bargaining agreements of the mid-tier public universities in Pennsylvania to the average yearly income for workers in the private nonagricultural industries. Borrowing from the Harris-Todaro labor migration model, we construct a composite bargaining index where the original bargaining index is discounted by incorporating the proportion of part-time temporary faculty permitted by the collective bargaining agreements at the mid-tier public universities in Pennsylvania from 1972 to 2009. By considering the reduced employment of full-time tenured-tenure track faculty that can result from increased wages and salaries, or the increase in employment that may result from decreased wages and salaries, this composite bargaining index gives a better measure of the benefits accruing to the “union family” as faculty incomes are increasing or decreasing than would be given by our “original bargaining index.” Beginning with the early 1970s, and continuing until 2009, we find that the bargaining index has essentially flattened over the past ten years, and the composite bargaining index decreased from 1995 to 2009. Applying an historical perspective approach, the authors conclude that this decline in bargaining power in recent years came from the same sources as the declines in bargaining power in the private sector earlier. Namely, a reduction in monopoly power in the good or service offered to the buyer, substitution in the labor market, and a reduction in regulation of the product market