The Growth of Australian Trade Unions: 1907-1969

Australia, Commonwealth Bureau of Census and Statistics , Year Book of the Commonwealth of Australia, 55 (1969), p. 1196.

Orley Ashenfelter and John H. Pencavel , "American Trade Union Growth: 1900-1960 ", Quarterly Journal of Economics, 83 (August, 1969), pp. 434-48.

Monroe Berkowitz , "The Economics of Trade Union Organization and Administration", Industrial and Labor Relations Review, 7 (July, 1954), pp. 575-92.

J. E. Isaac and G. W. Ford (eds.), Australian Labour Relations Readings (Melbourne: Sun Books , 1966), p. 97.

Ashenfelter and Pencavel, loc, cit., p. 436.

Selig Perlman , A History of Trade Unionism in the U.S. (New York: The Macmillan Company, 1937), p. 276.

It should be noted that the hypothesis advanced to explain the negative relation between unemployment and trade union growth is in no sense unique. A referee of the Journal of Industrial Relations prefers to argue that unemployed persons tend to terminate their union membership either for cost reasons or because membership involves certain obligations, such as observing union working conditions, which restrict an unemployed person in finding employment. These unemployed represent a threat to the employed unionists who then tend to combat this threat by letting their union membership lapse. This negative relationship may be offset to some extent in that the collective bargaining advantage relative to the bargaining power of individual workers may decline as unemployment declines. Thus, Charles C. Holt argues that, under certain conditions, as unemployment decreases the threat to quit on the part of an individual worker takes dominance over the union strike threat. However, seniority rights, retirement benefits, and the policy of hiring at the bottom of the skill ladder all reduce the effectiveness of the individual's threat to quit so that workers do in fact become increasingly dependent on collective bargaining, even in a very tight labour market. Refer to "Job Search, Phillips' Wage Relation, and Union Influence: Theory and Evidence", in E. S. Phelps et al., Microeconomic Foundations of Employment and Inflation Theory (New York: W. W. Norton, 1970).

N.F. Dufty , "Unions in Action: Aims and Methods", in P. W. D. Matthews and G. W. Ford (eds.), Australian Trade Unions (Melbourne: Sun Books, 1968), p. 43.

Ashenfelter and Pencavel, loc. cit., pp. 436-7.

Brian Fitzpatrick , The British Empire in Austradia. (Melbourne: Melbourne University Press, 1941), p. 341.

O. de R. Foenander , "Aspects of Australian Trade Unionism", International Labor Review, 83 (April, 1961), p. 324.

D.W. Oxnam , "Industrial Arbitration in Australia: Its Effects on Wages and Unions", Industrial and Labor Relations Review , 9 (July, 1956), p. 617.

D.L. Glickman , "The Labor Movements in Australia and New Zealand ", Social Research, 16 (June, 1949), p. 208.

The dummy variable cannot be associated with the effect of compulsory arbitration any more than with anything else.

The regression results reported in the following section use the rate of increase of employment in the highly unionized sectors, ΔE*, as the independent variable. Experiments were also conducted using the rate of increase of employment for the whole economy (excluding defence forces), ΔE, but the explanatory power of the regression was markedly reduced. For example, for the sub-period 1912-1960 and excluding the dummy variable, regression equation 1 in the results section had an R2 of .739 using ΔE* and T/E*, and an R2 of .644 using ΔE and T/E while the coefficients of ΔE* and ΔE were .58 and .85 with standard errors .09 and .18 respectively. There is also a possibility that the employment variable may overlap the percentage organized and unemployment variables. However, this does not appear to be a problem in this case as the simple correlations between ΔE* and U and between ΔE* and T/E* are —.13 and —.25 respectively.

Ashenfelter and Pencavel, loc. cit., p. 440.

When the employment coefficient is not significantly different from unity it can be shown that an analysis of the factors influencing T/E corresponds to an analysis of ΔT. Assume T/E = f(X) where X is a vector of independent variables. Taking logs and then differentiating this equation with respect to time allows us to derive the following relationship, which is written for convenience in discrete terms: ΔTt = ΔEt + g(X).

For example, A. G. Hines argues that changes in trade union membership strongly influence wage increases in his paper "Trade Unions and Wage Inflation in the United Kingdom, 1893-1961", Review of Economic Studies, 31 (October, 1964). Proponents of this view would argue that trade union growth positively influences nominal wages and thereby prices also. If it is assumed that the increase in prices is less than the increase in nominal wages, then a positive relationship between trade union growth and real wages would be expected. On these assumptions, intuitively we would expect the coefficients of real wages in the regression equations to be biased towards positive values. However, the regression results indicate that B5, B6 and B 7 are significant and negative, so unless it is argued that trade union growth reduces real wages we can conclude that the negative impact of real wages on trade union growth dominates any positive impact of trade union growth on real wages.

A.G.L. Shaw , The Economic Development of Australia (Croydon: Longmans, Green, 1964), p. 170.

Ian Turner , Industrial Labour and Politics; The Dynamics of the Labour Movement in Eastern Australia, 1900-1921 (Canberra: Australian National University Press, 1965), p. 72.

Turner, loc. cit., p. 69.

H.V. Evatt , Australian Labour Leader (Sydney: Angus and Robertson, 1945), pp. 348-9.

Shaw, loc. cit., p. 144.

D.W. Oxnam , "The Incidence of Strikes in Australia", in Isaac and Ford (eds.), loc. cit, p. 27.

R.A. Gollan , "The Historical Perspective", in P. W. D. Matthews and G. W. Ford (eds.), Australian Trade Unions (Melbourne: Sun Books, 1968), pp. 14-41.

Australia, Commonwealth Bureau of Census and Statistics, Monthly Bulletin of Employment Statistics, various issues.

Australia, Commonwealth Bureau of Census and Statistics, Labour Report, various issues.

O. de R. Foenander , Wartime Labour Developments in Australia (Melbourne: Melbourne University Press, 1943), p. 12.

Shaw, loc. cit., p. 195.

G.W. Ford , "Unions and the Future", in Matthews and Ford (eds.), loc. cit, pp. 190-208.

Lloyd Ross , " Australia", in H. A. Marquand (ed.), Organized Labor in Four Continents (New York: Longman's, Green, 1939), p. 462.

The interested reader may obtain a copy of the series used in this paper by writing to the author.

M. Keating , "Australian Work Force and Employment, 1910-1911 to 1960-1961", Australian Economic History Review, 3 (September, 1967), pp. 150-71.

N.G. Butlin , Australian Domestic Product, Investment and Foreign Borrowing 1861-1938/39 (Cambridge: University Press, 1962).

Keating, loc. cit., pp. 164-7.