What do unions do… for temps? Collective bargaining and the wage penalty

Abstract

Does collective bargaining lift wages for contingent workers? Well-worn theory suggests that temps at a covered employer earn less than otherwise similar “perms,” but still fare better than they would in a nonunion workplace. Our analysis of a national sample of matched employee–employer data first disposes of the universality of this conventional wisdom. Then, it allows us to test an alternative, contingent theory of the mitigating impact of collective bargaining on the temp wage gap predicated on received research in labor relations and institutional labor economics. We find that just how temps fare relative to perms hinges on the labor relations orientation of the employment relationship. Whereas unions clearly deliver for temps under adversarial conditions, they do not appear to do so where they adopt a more cooperative stance toward their employer counterparts.