Freeman & Medoff voice effect
Freeman & Medoff (1984) key points
- His major work is What Do Unions Do? The framework is presented in an earlier paper, "Two Faces of Unionism" (freeman.scholars.harvard.edu ). (freeman.scholars.harvard.edu)
- Core assertion: The union has
- the face of monopoly (wage premium = squeeze on corporate profits) and,
- 2.Collective Voice/Face of Institutional Responsiveness (collect dissatisfaction and findings and convey them to management through the system)
- There are two aspects. The latter can contribute to efficiency through information sharing and the development of procedures.
- Key Evidence: Unions reduce turnover and increase length of service. This effect cannot be explained by wages and benefits alone, and the contribution of the voice function is estimated. (NBER)
- Corporate performance: profit margins consistently declined (wage increases transferred excess profit). Productivity is mixed positive and negative, depending on the environment, with a subsequent review showing average near zero. (NBER, [EconStor https://www.econstor.eu/bitstream/10419/20131/1 /dp892.pdf])
- Conclusion (later self-evaluation): Summarizes that the decline of unions is a social loss because the "positive effects of Voice" outweigh the "negative effects of monopoly. However, it also positions the design of a non-union type Voice system as important. (NBER) Supplement: This framework is an application of Hirschman's "Exit-Voice-Loyalty" to the workplace (also explicit in the text). Reference: 1979 "Two Faces of Unionism" (The Public Interest/text PDF), 1984 book, Freeman (2005) reassessment paper, Hirsch (2003) performance verification. (freeman.scholars.harvard.edu, NBER, [EconStor https://www.econstor.eu/bitstream/10419/20131/1/dp892 .pdf])
Related:. - Disengagement, Statement, and Loyalty
Results of the Survey on the Actual Management Situation of Small and Medium Enterprises and Necessary Support Measures Eigo Murakami PDF
One is to leave the job (Exit) and move to a job with better conditions, and the other is to demand that the employer improve the working conditions. However, individual workers are unlikely to have their demands heard by their employers, and some demands may result in dismissal, so workers try to realize their demands through labor unions. If the working environment improves as a result of labor unions collecting workers' grievances and negotiating with employers, the turnover rate will decrease, costs for recruitment and investment in human resources will be reduced, and the skill level of the entire workforce will be maintained, which may increase productivity. This is the voice effect.
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