Union Attitudes to Labor-Saving Innovation: When Are Unions Luddites?

The response of union utility to labor-saving innovation is analyzed within a framework of oligopolistic competition in the product market, taking account of wage bargaining under several alternative structures of industrial relations. Conditions are established under which wages and employment will rise or fall in response to innovation. Union opposition tends to occur when union preferences are weighted in favor of jobs and labor demand is perceived to be inelastic. Thus, opposition is more likely with industry- or craft-based union organization in noncompetitive industries and is less likely with enterprise unionism in competitive industries. Copyright 1994 by University of Chicago Press.