Governors' Party Affiliation and Unions

• DOI: http://doi.org/10.1111/irel.12206
• Published date: 01 April 2018
• Author: Louis‐Philippe Beland,Bulent Unel
• Date: 01 April 2018

Governors’Party Affiliation and Unions

*

LOUIS-PHILIPPE BELAND and BULENT UNEL

Employing a regression discontinuity (RD) approach on gubernatorial elections in

the United States over the last three decades, this paper investigates the causal

effects of governors’party affiliation (Democrat versus Republican) on unioniza-

tion of workers, and unionized workers’working hours and earnings. Surpris-

ingly, we find no significant impact from the party affiliation of governors on

union membership and union workers’labor-market outcomes.

Introduction

Since the success of Franklin D. Roosevelt’s New Deal in the 1930s,

which greatly benefited labor organizations by giving workers the right to

join a union, unions have shown a strong allegiance to the Democratic Party.

Unions have played an important role in the Democrats’success by encour-

aging their members to support the party and by raising money for Demo-

cratic candidates. For instance, according to National Institute for Labor

Relations Research (NILRR) estimates, unions spent about $1.4 and $1.7 bil-

lion in the 2010 and 2012 election cycles, respectively (NILRR 2013), and

the overwhelming majority of this spending went to Democrats. In response

to this strong support from unions, Democrats claim that “[F]or decades,

Democrats have stood alongside labor unions in defense of fair pay and eco-

nomic security.”

1

In this paper, we investigate whether governors’party affiliation (Democrat

versus Republican) has had any impact on unionization (and deunionization)

of workers as well as their working hours and earnings. Using data on union

membership in the Current Population Survey (CPS) Outgoing Rotation Group

(ORG) files over 1983–2013 together with gubernatorial election results in

fifty states, we address the question by exploiting random variation associated

with close elections in a regression discontinuity (RD) design. We utilize an

JEL: J58, J31, D72.

*The authors’affiliations are, respectively, Louisiana State University, Baton Rouge, Louisiana. E-mail:

lbeland@lsu.edu; and Louisiana State University, Baton Rouge, Louisiana. E-mail: bunel@lsu.edu.

1

This is the statement on the Democratic Party’sofficial web site (https://www.democrats.org/).

INDUSTRIAL RELATIONS, Vol. 57, No. 2 (April 2018). ©2018 Regents of the University of California

Published by Wiley Periodicals, Inc., 350 Main Street, Malden, MA 02148, USA, and 9600 Garsington

Road, Oxford, OX4 2DQ, UK.

177

RD design for our analysis, because the simple ordinary least squares (OLS)

approach suffers from the endogeneity problem arising from factors such as

voter characteristics, party incumbency, labor-market conditions, etc. Surpris-

ingly, we find that governors’party affiliation has had no significant effect on

unionization of workers. We also find that party affiliation of governors has no

impact on labor-market outcomes of unionized workers (relative to nonunion-

ized ones).

These findings are surprising because U.S. governors have a high degree of

autonomy in exercising their power in their policy choices. Governors head

the executive branch, which is responsible for proposing the budget, recom-

mending legislation, and appointing key personnel. In addition, state govern-

ments have powers to levy taxes, establish license fees, spend tax revenues,

regulate businesses, manage the health-care system, and provide emergency

services. By having the right to veto state bills, governors have considerable

control over state policies. Several studies have documented that the party alle-

giance of governors has a significant impact on their actions (Alt and Lowry

2000; Beland and Oloomi 2017; Besley and Case 1995; Knight 2000, among

many others). It has been shown that Democratic governors affect the labor

markets of groups voting for them (target-based policies): blacks (Beland

2015) and immigrants (Beland and Unel 2017).

Party affiliation may have different effects on unionization of workers in dif-

ferent earning groups and we also investigate this. In the union-wage literature,

several authors have found that unions compress the structure of wages in the

sense that union membership increases wages in the lower end of the earning

distribution and decreases wages in the upper end (see Card 1996; Frandsen

2014; and Rios-Avila and Hirsch 2014; among many others). We divide our

sample into five earning groups based on predicted earning distribution, and

investigate the impact of party affiliation on (de)unionization of workers and

their earnings for each subgroup. We find no significant impact of the party

affiliation on any earning groups.

We also investigate whether a governors’party affiliation has different

effects on the unionization of skilled and unskilled workers and their corre-

sponding labor-market outcomes. This issue is important because many econo-

mists have argued that skill-biased technical change (SBTC) is the driving

factor behind the steady decline in union power in the United States.

2

For

example, Acemoglu, Aghion, and Violante (2001) developed a model in which

SBTC undermines unionization by providing better outside options for skilled

2

Union power has declined considerably over the last three decades: while 25 percent of workers were

union members in 1985, this fraction dropped to less than 12 percent in 2013. These statistics are calculated

using the CPS data.

178 / LOUIS-PHILIPPE BELAND AND BULENT UNEL