Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/272686 
Year of Publication: 
2023
Series/Report no.: 
IZA Discussion Papers No. 16059
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
Over the past decade, organized labor has played a significant role in advocating for minimum wage increases. Why might this be, given that the minimum wage may act as a substitute for the bargaining power offered by labor unions? In this paper, we study the interplay between minimum wages and union membership. We estimate that each dollar in minimum wage increase predicts a 5 percent increase (0.3 pp) in the union membership rate among individuals ages 16–40. Consistent with a classic "free-riding" hypothesis, however, we find that minimum wage increases predict declines in union membership among the minimum wage's most direct beneficiaries. Instead, increases in union membership occur among much broader groups that are not directly affected by the minimum wage.
Subjects: 
political economy
social choice
minimum wage
unionization
JEL: 
D71
D78
P16
Document Type: 
Working Paper

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