A Theory of the Organization

of State and Local Government Employees

A M Y H. D A L T O N
Virginia C o m m o n w e a l t h University, R i c h m o n d , VA 23284

Expansion o f public employee labor organizations has brought considerable

change in a sector previously considered outside the domain of the trade union
movement. A model to explain this phenomenon among state and local govern-
ment employees is developed and tested using data f r o m the 1977 Census of
Governments. The percentage o f employees organized is determined by a number
o f factors which affect the costs and benefits o f membership and may be influ-
enced by the level o f employees" earnings. Empirical evidence indicates that a
higher level o f organization is a product o f government size, legal provisions,
unionization in the private sector, and, in some government functions, the
unemployment rate, and level o f income.

I. Introduction
Public employee labor organizations have become an important economic and
political force in state and local governments. The growth of these organizations
during the past two decades is one of the most interesting aspects of the labor
movement. Long considered outside the domain of trade unions, 50 percent of
state and local government employees now belong to a labor organization (1977
Census of Governments, Vol. 3, No. 3, 1979, p. 1). The expansion of organized
labor in the public sector is of particular significance to economists because of its
effects on labor markets and the fiscal health of the states and localities.
The term "labor organization" is used to refer to any employee organization
having the principal aim of improving wages, hours, and other conditions of
employment. Unlike the private sector, public employees are organized not only
by AFL-CIO and independent unions, but also by state employee associations
and professional societies which bargain for their members.
This paper develops and tests a model to explain the percentage of state and
local government employees who belong to labor organizations. In the second
section, factors will be considered which make adaptation of conventional
theories of union growth necessary to explain the organization of public
employees. The behavior of labor organizations and employees of state and local
governments is described in the third section. The model is specified in the fourth
section and estimated by two stage least squares. The empirical results are

JOURNAL OF LABOR RESEARCH

Volume 111, No. 2 Spring, 1982
164 JOURNAL OF LABOR RESEARCH

presented in the following section. A summary and conclusions are given in

the final section.

II. Characteristics Unique to the Public Sector

Theories of union growth are not new to labor economics (Ashenfelter and
Pencavel, 1969; Bernstein, 1953, 1961; Davis, 1941; Dunlap, 1948, and Shister,
1953), but the application of existing theories to the public sector is questionable.
Although some of the factors accounting for union growth in the private sector
can be expected to provide a partial explanation for similar growth in the public
sector, the relationship of each factor to growth must be assessed separately by
sector. Prior theories were constructed to explain the overall growth of unions in
the entire economy which heretofore has generally meant within the private
sector. Employment in the public sector has unique characteristics which exert a
significant influence on the growth of organized labor. A prime consideration is
the participation of public employees in the hiring of their own employer. This
factor, absent from previous models because it was irrelevant in the private
sector, should be taken into account in any model of public sector unionism.
The major testable model of union growth developed by Ashenfelter and
Pencavel (1969, pp. 434-448) contains explanatory variables that are not
pertinent to the public sector. For example, their model predicted a statistically
significant negative relationship between the proportion of employees unionized
in the unionized sectors of the economy and a change in the number of workers
unionized in the entire economy, and their test results supported this hypothesis.
The rationale was that the higher the percentage of labor that is organized, the
more difficult would be the task of recruiting the remainder of the unorganized
labor force. The proportion of the total labor force organized seems likely to
have a positive relationship to the change in the number of workers unionized
in a particular segment of the economy. A high proportion would indicate
public approval of unionization and could provide support to organizers
in a less organized or unorganized segment of the economy. State and local
governments make up a particular segment. These differences indicate an alter-
native model is necessary to explain the level of organization of state and local
government employees.

III. Behavior o f Labor Organizations and Employees

In order to develop an economic theory of labor organizations, the members or
the organizers must be assumed to maximize or minimize some factor of impor-
tance to them. There is considerable debate as to what is maximized. Do unions
maximize the interest of the rank and file? Do unions maximize the utility of their
leaders subject to the constraint of a satisfied membership? Or, do unions
maximize the probability of survival of the organization? If labor organizations
maximize the interest of the rank and file, then how is this interest defined? If the
utility function of leaders is maximized, what are the arguments of this function
AMY H. DALTON 165

- salary, working conditions, status in the national union or standing with

-

legislative bodies?
The answer to these particular questions is beyond the scope of this paper. L
However, due to the unique character of the employer-employee relationship
existing between governments and their labor organizations, public employee
organizations are assumed to behave as if they sought to maximize the percentage
of employees organized.2 The desire to maximize membership arises because state
and local government employees can use their votes to elect officials who will vote
for measures favorable to employees. In one situation they cast votes to secure the
desired end, and in the other they entertain the possibility of withholding votes in
future elections (Murphy, 1970; Wellington and Winter, 1971; Tullock, 1974;
and Spizman, 1980). Even though some local government employees may not
work and reside in the same jurisdiction, this condition generally holds. The
larger the percentage of employees belonging to a labor organization, the more
effective the voting bloc becomes in the political process. By belonging to the
same labor organization, public employees of a government unit reduce the cost
of colluding. When they agree, their influence is not weakened by dispersing their
votes between rival candidates or issues.
Several conditions reinforce the organizations' desire to enroll as many
employees as possible. First, the exclusion of public employees from the provi-
sion of the National Labor Relations Act of 1935 (Wagner Act) may mean that
recognition of a labor organization will require more than a majority of the
employees to become members. Some states have passed labor relation laws
covering public employees which provide procedures for granting recognition
similar to those of the Wagner Act. By 1976, half of the states required collective
bargaining at some level of government; however, only fifteen states and the
District of Columbia required all non-federal governments to bargain collectively
when a majority of the employees so desired.
Where employers are required by law to bargain collectively when employees
so request and an agency of government has the responsibility of carrying out
representation elections, enrolling fifty-one percent of the employees is usually
sufficient. Where government units are permitted but not required to bargain
collectively, have no legal guide for determining their behavior with organized
employees, or are prohibited from bargaining collectively, more than fifty-one
percent of the employees will usually have to join in order to secure recognition.
Even 100 percent participation of workers in the organization may not assure
recognition, but the probability of recognition improves with a rising partici-

'For a critique of the literature on this topic, see Martin (1980, pp. 6-30).
2Presumablythe percentageof employeesorganizedcould approach 100070if sufficientcosts were
incurred; however,the organizationsare constrainedby the fact that total cost must be coveredby
total revenue.
166 JOURNAL OF LABOR RESEARCH

pation rate because the political power of the labor organization grows with a
rising participation rate.
Second, the highly inelastic demand for state and local government services
(Borcherding and Deacon, 1972) implies that a rise in the price of these services
due to an increase in wages would not be met by a sharp reduction in the quantity
of services consumed.3 As a consequence, there would not be a sharp reduction in
employment resulting from an increase in compensation. However, the highly
elastic supply of workers to these governments (Ashenfelter, 1972) implies that if
a labor organization secures an increase in wages for its members, some organ-
ization workers would be replaced. A successful organization must address the
problem caused by the elastic supply of workers. Hicks pointed out that " i f
technical change is easy, while the product has an inelastic demand," it is impor-
tant to be important (1957, pp. 241-246). When a very large portion of the
employees are represented by a single labor organization, they become impor-
tant, and government officials find it difficult to replace those organized
employees who have gained a wage increase.
The individual's decision to join or not to join an organization is based on
the net gain from membership, defined as the value of anticipated benefits less the
value of anticipated costs of membership to the employee. Potential benefits
include not only increased income, but also such nonpecuniary items as job secur-
ity, agreeable surroundings, congenial fellow workers, better working rules, and
efficient grievance settlement procedures.
Dues paid for membership may be the least of the cost involved. Other costs
may include job insecurity and disapproval of fellow workers and others
because of labor organization activity. Job insecurity could be translated into
separation, discrimination in the form of delayed or omitted promotion, or in
less desirable assignments.

IV. The Model

Assuming the labor organization and its members have the same goals, the
percentage of employees organized (O/E) will be increased whenever the cost to
the employee of becoming a member is reduced either directly or through reduced
operating costs of the organization. Percentage organized is the number of
employees belonging to a labor organization (O) divided by the number of
full-time equivalent employees (E). Labor organizations incur costs of
organizing employees, overcoming employer resistance, establishing and
administering the organization, a n d servicing the membership. Other major

~Passageof Propositions 13in Californiaand 2 in Massachusetts restrictinglocaltaxesattestto the

desire for lowertaxes. An implicationfollowingfrom reducedtaxes is that the citizen's demand for
utilities, police and fire protection, streets, and other government servicesis not as inelastic as
previouslythought.
AMY H. DALTON 167

factors affecting the percentage of organized workers are the benefits gained
from membership, the political strength of the labor organization, and the level
of income of the employees.
While most of the costs and benefits cannot be measured directly, they are
directly related to several variables which can be quantified. The 1977 Census o f
G o v e r n m e n t s (Vol. 3, No. 1, No. 2, and No. 3) provides much of the necessary
data. It is hypothesized that, in state i for thejth government function,
( O / E ) i j = f II,j, S,j, L ~, L ~; ( O / E ) , * , U,] (1)
where
O/E = the percentage of full-time employees organized, 1977;
I= average monthly earnings of full-time employees, 1977;
S= a measure of the size of government, 1977;
Zr= 1 if state and local government units must bargain collectively
when a majority of the employees vote to be represented by a
labor organization, 19764, and
0 otherwise;
L " = 1 if state and local government units may, but are not required to
bargain collectively with employees, 1976', and
0 otherwise;
( O / E ) * = the percentage of nonagricultural employees belonging to
unions, 19764; and
U the employment rate, 1977.
Six government functions (education, highways, public welfare, hospitals,
police protection, and fire protection) and total state and local government
services are investigated empirically.
If labor organization membership is considered an economic good in the
sense that workers are willing to pay a price for the service provided by the unio n
or employee association, rising income should mean increasing membership.
Membership might, however, be treated as an inferior good leading to lower
membership as income rises. This could occur in communities where labor
organizations do not have "status." The relationship between O / E and I is
therefore theoretically indeterminate.
The more grievances workers have, the more likely they are to perceive
membership in a labor organization as a means of redressing their "wrongs." The
theories of union growth in the private sector (Tannenbaum, 1962) have consid-
ered the grievance factor to be a function of firm size. The concept can easily be
applied to the public sector where size will be measured in terms of employment.
The larger the government unit becomes, the smaller is the relative importance of

'Data for 1977werenot available.

168 J O U R N A L OF LABOR RESEARCH

each worker; the corresponding increase in the distance between the worker and
those who make decisions about his job raises the probability of disputes and
misunderstandings. Demand for membership can be expected to rise as workers
join for the purpose of exerting some control over their working conditions.
As the size of governments increase, economies of scale in organizing
workers may be present, lowering the per worker costs of both recruiting and
operating the organization. If lower costs are passed on in the form of lower dues,
additional employees would be attracted. Because effective organizers are a
scarce resource to employee organizations, they will be used where their potential
productivity is greatest. A large municipal government will offer a better
opportunity for a high new-members-per-organizer ratio than a small county
government. The coefficient of S is expected to carry a positive sign.
The measurement of size requires additional explanation. When the model is
tested by total state and local government employees, S is defined as the percen-
tage of full-time equivalent employees working for a government (state, county,
municipality, township, special district or school district) where 1,000 or more
full-time equivalent employees are hired. When tested by government function
(education, highways, public welfare, hospitals, police protection or fire
protection) S is defined as the percentage of full-time equivalent employees
working where 300 or more full-time equivalent employees are hired for that
particular function. 5
The existence of a labor law allowing or requiring collective bargaining when
a majority of workers so desires reduces the cost of joining a labor organization
by making such activities legal. For the organization itself, promotional action is
less costly because both nonorganized employee and employer resistance are
lower. Because state labor laws customarily contain unfair labor practice provi-
sions and provide for an administrative body to enforce compliance and hold
elections to determine representation, the cost of maintaining the organization
and servicing the membership is also reduced. Benefits of joining a labor
organization appear to be more promising when collective bargaining is
encouraged by law. The omitted regressor is the group of states in which collective
bargaining in the public sector is forbidden or no state law exists relative to the
matter. L ' and L " are used to measure the effect of state labor laws and are
expected to be positively related to the percentage of state and local government
employees organized (O/E).
A highly unionized private sector labor force may reduce both promotional
and operating costs by providing financial aid and support personnel during
organization efforts or at collective bargaining time. The assistance from a

'The 1977 Census o f Governments reports the number of full-time equivalent employees working in a
local government where 1,000 or more full-time equivalent employees are hired and the number work-
ing in a local government function where 300 or more full-time equivalent employees are hired. S was
calculated by adding these figures to comparable state government data and dividing by the total
employment of the appropriate category.
AMY H. DALTON 169

private sector union to a public employee organization need not be financial to

reduce effectively the cost of organizing or bargaining. Because recognition of a
public employee labor organization or assent to its demands at the bargaining
table is a political decision as well as an economic one, the support of private
sector unions for these decisions will be taken into account by elected officials.
The coefficient of (O/E)*, the percentage of nonagricultural employees belong-
ing to unions, is expected to be positive.
Included in nonagricultural employees belonging to unions are 1,704,000
state and local government employees. Elimination of this group would be
desirable, but impossible since the Bureau of Labor Statistics does not report this
statistic by states. However, the number of public employees included in the
union membership figure (i.e., 15 percent) is small relative to the total union
membership. Approximately two-thirds of organized state and local government
employees belong to associations and only one-third to unions (Bureau of Labor
Statistics, 1979).
When the unemployment rate (U) is low, government officials will be hiring
in a tight labor market and may take more tolerant attitudes toward employees
who participate in labor organizations. If the cost to an individual for joining an
organization includes any form of job insecurity, one would expect to see this
portion of membership cost decline. Also, employees may feel freer to partici-
pate, knowing that if their behavior brings the disapproval of their employer,
they can find other jobs. A negative relationship is anticipated between percen-
tage organized and percentage unemployed.
Income (I) is one of the explanatory variables, and higher income is a major
goal of organized labor. If labor organizations do influence the level of wages and
salaries, a simultaneity problem exists, and the model needs a second equation to
explain how the level of income is determined.
Lewis's analysis (1963) of twenty studies on unionism and wages indicated
that unionization in the private sector had a moderate effect on wages, raising
unionized workers' wages perhaps 10 to 15 percent above competitive levels.
Ehrenberg's empirical study (1972) indicated that because of the relative inelastic
demand for government services, state and local government employees can ask
for higher real wages than they would seek elsewhere.
Factors other than the level of organization will influence the level of income
of state and local government employees. Because both public and private
employees are drawn from the same labor market and because many governments
operate under the prevailing wage rule in establishing rates of pay, it is assumed
these factors are reflected in the level of private income (P1). The income equa-
tion is given by:
Iij = g [ (O/E) u,/91-] (2)
where
L O/E, i, and j are defined as above; and,
PI = the average weekly earnings in manufacturing.
170 JOURNAL OF LABOR RESEARCH

V. Data and Empirical Results

Data for the fifty states and the District of Columbia were used to estimate
equations (1) and (2) by two stage least squares method. Sources of data are
given in the Appendix and values of O/E in Table I. Reviewed in this section are
the results of fitting equations (1) and (2) to data for total state and local govern-
ments and for six selected government functions. The empirical results are
reported in Table II.
The coefficient of I is positive for total government operations and all
government functions except education, indicating that membership in labor
organizations is considered a normal good. Since this coefficient is significantly
different from zero only for police protection, the ambiguity of the effect of the
level of income on the level of organization remains.
The hypotheses that size of government units, the existence of a state labor
law, and the level of private sector unionization are contributing factors to the
level of public sector organization are strongly supported. The coefficients of S,
L ', and (O/E)* were positive and statistically significant (1% or 5% level) in
three-fourths of the cases. The only negative coefficient was for the size variable
for fire protection.
While the coefficient of the L " variable was usually positive, it was never
statistically significant. This result is not surprising. A law permitting collective
bargaining is seen to be less effective in increasing the level of organization than a
law requiring collective bargaining when employees vote to be represented by a
labor organization.
The coefficients of the unemployment variable raise questions. The sole
category with a coefficient statistically significant (1% level) and carrying the
expected negative sign is fire protection. Three other estimations have negative
coefficients and three estimations have positive and statistically insignificant
coefficients. Is the unemployment statistic a good measure of the condition of the
economy? Does the percentage of state and local government employees organ-
ized increase because of a rise in unemployment? The explanation of the
unexpected sign on the coefficient of Umay be found in the job security enjoyed
by government workers. A weak labor market implies layoffs and declining earn-
ings. With the probability of layoffs relatively low do public employees turn to
labor organizations to increase their earnings when the labor market would
indicate the opposite?
The coefficient of determination, R 2, used to measure the "goodness of fit"
on ordinary least squares estimations, is not appropriate for two stage least
squares estimations; however, it may be instructive to note in each case the corre-
lation between the actual values of the dependent variable and the values of the
dependent variable estimated by the structural equation. The correlation of the
actual and estimated values of O/E is given for each category: total, .833; educa-
tion, .766; public welfare, .675; hospitals, .818; highways, .720; police
protection, .845; and fire protection, .783.
AMY H. DALTON 171

Turning to the second equation, the hypothesis that the income of state and
local government employees is influenced by the level of labor organization
(O/E) and the prevailing wage rate (PI) is strongly supported. With only one
exception the estimated coefficients of O/E and PI are statistically significant at
the 17o or 5070 level, and in no case have the positive relationships hypothesized
earlier been refuted by the estimates.

VI. Summary and Conclusions

The model predicts that the extent of labor organization across states is deter-
mined by a number of factors which affect the costs and benefits of membership
and may be influenced by the level of employees' earnings. Estimation of the
model with seven sets of data give reasonably good results. The unemployment
rate (U) was not as useful as expected in explaining the level of labor organization
in the state and local government sector and the effect of income on the level of
labor organization was ambiguous.
The results supported the remaining hypotheses of the model. Increasing size
of government units increases the benefits of membership to individual workers
and reduces the per worker cost of providing organization services. State labor
laws allowing or encouraging collective bargaining reduces both the cost of join-
ing a labor organization and the cost of operating an organization. A high level of
unionization in the private sector enhances organizations in the public sector. The
level of organization influences the level of public employees' wages.
Higher levels of labor organization will tend to increase the influence of
labor on economic and political decisions and to decrease the influence of market
factors in determining wages, hours and other conditions of employment.
Will the percentage of state and local government employees joining labor
organizations continue to rise? From the above empirical findings, it can be
argued that a higher level of organization is the result of larger governments, the
passage of additional state labor laws, and an expansion of unionism in the
private sector. The trend of these factors for the past several years may indicate a
downturn in the rate of increase of the level of organization of state and local
government employees.
Since World War II, the size of local governments has increased because of
expanding services rendered the citizenry and because of consolidation of local
governing bodies. However, the rate of consolidation was reversed in the 1970s.
The number of governments in the U.S. declined by more than 10 percent in each
five year period from 1952 to 1967; declined by less than 4 percent from 1967 to
1972; and increased by 2 percent from 1972 to 1977 (1977 Census o f Govern-
ments, Vol. 1, No. 1, p. 25). If the "taxpayer's revolt" continues to be effective,
the rate of increase in state and local government services also may be slowed.
Further, the public's negative reaction to activities of organized public
employees may deter state legislatures from enacting new labor-relations laws.
 Table I
Percent of State and Local Government
Employees Organized, by State, by Selected Functions, 1977

Public Police Fire

Total Education Welfare Hospitals Highways Protection Protection

Alabama 31.5 41.8 49.9 14.4 30.2 24.1 52.8

Alaska 65.2 56.1 94.2 67.5 88.9 64.4 84.0
Arizona 34.3 41.0 34.6 21.6 31.1 43.6 64.8
Arkansas 16.9 25.7 0.0 7.6 8.2 11.1 35.0
California 64.3 62.7 59.9 52.1 73.9 76.2 82.4
Colorado 41.3 50.9 24.1 32.9 38.9 46.0 72.0
Connecticut 72.1 83.2 61.1 70.2 80.9 80.9 92.5
Delaware 53.6 56.3 67.1 59.7 56.6 61.6 91.4
District of Columbia 60.1 50.2 35.7 60.0 30.5 90.2 95.4
Florida 31.9 44.6 11.9 27.0 9.8 39.4 65.0
Georgia 17.9 30.8 18.8 7.5 8.6 5.8 14.4
Hawaii 83.8 95.7 89.5 55.2 81.8 75.8 88.2 O
Idaho 33.6 48.0 0.2 8.4 26.5 26.5 77.0
Illinois 45.6 55.8 33.7 57.8 35.3 37.0 68.9
Indiana 34.7 46.9 4.8 22.5 24.8 32.4 72.3
Iowa 39.8 54.8 16.2 8.1 37.8 42.3 80.8 0
Kansas 25.9 41.4 7.1 7.0 9.5 15.7 68.1
Kentucky 23.2 39.1 0.0 3.7 2.2 27.4 56.6 >
Louisiana 24.7 36.5 5.8 14.5 27.8 22.4 54.4 0
Maine 55.6 59.0 54.8 65.2 67.3 53.7 75.6
Maryland 57.7 64.4 49.5 60.1 63.6 57.7 81.2
Massachusetts 69.5 80.5 71.1 57.8 78.3 81.5 87.3
Michigan 67.9 77.0 52.4 55.8 58.5 78.7 85.0 >
Minnesota 60.2 69.6 44.7 47.4 75.9 71.2 91.8
Mississippi 8.9 13.0 31.1 0.0 2.0 6.3 37.6
Missouri 33.5 46.1 15.5 23.5 48.1 19.4 67.0
Montana 46.2 53.6 43.8 72.3 61.2 29.8 76.1
Nebraska 37.0 56.3 17.2 28.4 23.7 34.9 83.6
Nevada 47.9 50.3 61.0 17.4 67.6 65.0 80.4
New Hampshire 43.1 48.6 29.1 47.7 50.5 25.0 59.1
New Jersey 63.1 74.9 37.7 63.4 47.0 70.5 86.5
New Mexico 23.3 30.3 31.1 21.8 20.5 19.3 45.4
New York 72.1 78.5 53.9 79.7 57.3 83.8 89.4 Z
North Carolina 31.4 39.5 3.4 24.1 56.0 19.9 31.5
North Dakota 32.8 44.3 8.7 28.4 31.6 20.8 75.1
Ohio 45.2 58.1 21.3 27.6 44.5 47.7 80.2
Oklahoma 23.9 36.3 0.0 2.1 6.0 41.4 71.9
Oregon 60.1 72.1 42.9 49.2 62.1 53.4 82.7
Pennsylvania 64.2 73.1 47.0 70.7 60.4 78.2 87.0
Rhode Island 83.0 88.0 98.2 97.4 72.0 83.3 92.3
South Carolina 19.7 29.6 39.5 10.8 5.3 6.6 29.3
South Dakota 30.7 43.3 0.4 19.2 35.0 15.9 59.6
Tennessee 30.3 47.6 41.4 17.7 11.9 25.1 52.7
Texas 31.2 43.4 21.0 12.6 32.6 29.2 51.2
Utah 51.4 60.5 50.0 13.0 59.7 42.6 64.8
Vermont 44.4 47.0 85.0 47.6 51.2 17.9 43.1
Virginia 26.9 34.9 8.8 13.0 47.4 13.1 26.2
Washington 56.4 62.5 62.0 46.5 63.1 58.8 83.0
West Virginia 27.8 47.7 0.0 10.4 2.6 15.1 44.9
Wisconsin 64.4 69.0 47.6 49.5 71.7 75.7 85.7
Wyoming 37.0 48.0 76.2 13.5 41.2 16.8 82.2

Source: 1977 Census of Governments," Vol. 3, No. 3.

t.O
 Table II
Estimates of Equations (1) and (2) by 2SLS, by States by Selected Government Functions, 1977

Total O/E = -1.801 + .0051 + .221S + 2 0 . 7 4 9 L ' + 3.793L" + .813(O/E)* - .228U

(-.144) (.285) (1.779) (3.988) (.838) (3.512) (-.192)
I = 350.44 + 5 . 9 8 7 0 / E + 1.878/)/
(4.479) (5.566) (4.843)

Education O/E = 34.957 - .0111 + .0895S + 1 9 . 8 3 6 L ' + 2.402L" + 1.106(O/E)* - 1.530U

(2.483) ( - . 5 8 2 ) (.706) (3.356) (.462) (4.036) ( - 1.094)
! = 262.562 + 5 . 0 7 0 0 / E + 2.462P/
(2.618) (3.454) (5.245) 0

Public Welfare O/E = -32.261 + .018I + .192S + 1 0 . 4 4 6 L ' - 12.883L" + . 6 3 2 ( O / E ) * + 3.337U

( - .678) (.283) (1.041) (1.066) ( - 1.560) (1.553) (1.300) 0

I = 584.335 + 2 . 9 4 6 0 / E + .935PI >

(6.379) (2.939) (2.178)
0

Hospitals O/E = -59.831 + .0161 + .546S + 2 2 . 4 4 6 L ' + 2.295L" + .648(O/E)* + 1.349U

( - 2.806 (.497) (2.808) (3.419) (.388) (1.998) (.709) >
I = 369.367 + 3 . 8 0 9 0 / E + 1.545PI
(4.217) (4.432) (3.752)
 Highways O/E = - 3 . 6 1 0 + .0301 + .001S + 17.509L' - 2.781L" + .761(O/E)* - 1.093U
(-.159) (1.300) (.003) (1.934) (-.370) (2.185) (-.568)
I = 353.145 + 5 . 0 7 0 0 / E + 1.824PI
a~
(2.714) (2.746) (2.591) t~

Police Protection O/E = -24.386 + .020 + .272S + 23.048L' + 4.436L" + .719(O/E)* + .907U Z
(-1.652) (.949) (1.951) (3.381) (.780) (2.232) (.571)
I = 384.271 + 7 . 4 3 8 0 / E + 1.833PI
(3.655) (7.092) (3.510)

Fire Protection O / E = 23.605 + .0411 - .016S + 18.822L' + 7.141L" + .560(O/E)* - 3.992U

(1.710) (2.445) ( - . 1 6 3 ) (2.865) (1.312) (1.988) (-2.720)
I = 262.218 + 9 . 1 6 0 0 / E + 1.358PI
(1.620) (3.730) (1.471)

Numbers in parentheses are t-scores.

176 JOURNAL OF LABOR RESEARCH

Strikes, with the attendant interruption o f government services, have antagon-

ized a portion of the public. When gains from collective bargaining by public
employee labor organizations are considered excessive and a contributing factor
to a state or local government financial crisis, voters will not want to see organiza-
tion encouraged. It would seem that state labor laws will be more difficult to
secure in the future than in the past ten or fifteen years.
A n d finally, the trade unions have been recruiting a declining proportion o f
private sector employees for a number of years. The percentage of non-
agricultural employees belonging to a union declined from 33.2 percent in 1958
to 24.5 percent in 1976. These percentages are those derived by the Bureau o f
Labor Statistics from the reports made by union officials. A survey of other
sources of membership data indicated that this reported decline is understated
(Heldman, 1979).
The future of the labor organizations among state and local government
employees lies in the changes o f government size, legal provisions, unionization
in the private sector, and, in some government functions, the unemployment rate
and the level o f income. One may come to the conclusion that their future growth
rate will decline considering the recent trends o f the first three factors.

REFERENCES

Ashenfelter, Orley. "Demand and SupplyFunctions for State and Local Employment:Implications
for Public EmploymentPrograms," Preliminary Draft, Industrial Relations Section, Princeton
University, 1972.
, and Pencavel, John H. "American Trade Union Growth, 1900-1960." Quarterly
Journal o f Economics, 83 (August, 1969), 434-448.
Bernstein, Irving. "The Growth of American Unions." American Economic Review, 44 (October
1953), 301-318.
"The Growth of American Unions, 1945 and 1960." Labor History, 2 (Spring,
1961), 131-157.
Borcherding, Thomas E. and Deacon, Robert T. "The Demand for Services of Non-Federal
Governments." American Economic Review, 62 (December, 1972), 891-901.
Davis, Horace B. "The Theory of Union Growth." Quarterly Journal o f Economics, 55 (August,
1941), 611-633.
Dunlop, John T. "The Development of Labor Organization: A Theoretical Framework." Insights
into Labor Issues. Edited by Richard A. Lester and Joseph Shister. New York: Macmillan
Co., 1948.
Ehrenberg, Ronald. The Demand f o r State and Local Government Employees: A n Economic
Analysis. Toronto and London: Lexington Books, 1972.
A M Y H. D A L T O N 177

Heldman, Dan C. "Making Policy in a Vacuum: The Case of Labor Relations." Policy
Review, 10 (Fall, 1979), 75-88.
Hicks, J. R. The Theory o f Wages, Gloucester, Mass.: Peter Smith, 1957.
Lewis, H. G. Unionism and Relative Wages in the United States. Chicago: University of Chicago
Press, 1963.
Martin, Donald L. An Ownership Theory o f the Trade Union. Berkeley, California: University
of California Press, 1980.
Murphy, Richard J. "The Politics of Public Employee Relations." The Crisis in Public Employee
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D.C.: The Bureau of National Affairs, Inc., 1970.
Shister, Joseph. "The Logic of Union Growth." Journal o f Political Economy, 61 (October,
1953), 413-433.
Spizman, Lawrence M. "Public Employee Unions: A Study in the Economics of Power." Journal o f
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Tannenbaum, Frank. A Philosophy of Labor. New York: Alfred A. Knopf, 1962.
Tullock, Gordon. "Dynamic Hypothesis on Bureaucracy." Public Choice, 19 (Fall, 1974), 124-131.
Wellington, Harry H. and Winter, Ralph K., Jr. The Unions and the Cities. Washington, D.C.:
The Brookings Institution, 1971.

APPENDIX
Sources of Data

O/E 1977 Census o f Governments, Vol. 3, No. 3, Labor-Management Relations in State and Local
Governments. Washington, D.C.: Government Printing Office, 1979.
I 1977 Census o f Governments, Vol. 3, No. 2, Compendium o f Public Employment. Washington,
D.C.: Government Printing Office, 1979.
S 1977 Census o f Governments, Vol. 3, No. 2, Compendium o f Public Employment. Washington,
D.C.: Government Printing Office, 1979.
L ' and L" U.S. Department of Labor, Summary o f State Policy Regulations f o r Public Sector
Labor Relations. Washington, D.C.: Government Printing Office, 1976.
(O/E)* U.S. Department of Labor, Directory o f National Unions and Employee Association, 1977,
Washington, D.C.: Government Printing Office, 1979.
U U.S. Department of Labor, Employment and Training Report o f the President. Washington,
D.C: Government Printing Office, 1978.
PI U.S. Department of Labor, Handbook o f Labor Statistics. Washington, D.C.: Government
Printing Office, September, 1979.