Academic journal article Contemporary Economic Policy

Some Empirical Effects of Using Permanent Striker Replacements

Academic journal article Contemporary Economic Policy

Some Empirical Effects of Using Permanent Striker Replacements

Article excerpt


The Wagner Act of 1935 protected employees' right to strike but did not explicitly guarantee employers the right to permanently replace economic strikers (see Olson, 1991). The Supreme Court, however, granted employers that right in NLRB v. Mackay Radio & Telegraph Company, 304 U.S. 333 (1938). The Mackay doctrine has become increasingly controversial in recent years, leading to repeated attempts to enact federal legislation banning the use of permanent striker replacements. The current version of this bill, entitled the Workplace Fairness Act, was passed by the House but has not yet come up for a vote in the Senate.

Many of the bill's proponents and opponents argue about the likely effects of hiring permanent replacements or of banning their use. Prior research on the issue is limited. Gramm (1990, 1991a, 1991b) provides descriptive studies. Card and Olson (1992), Gramm (1990, 1991a), Olson (1991), and Schnell and Gramm (1994) investigate the relationship between using replacements and strike duration. Gunderson and Melino (1990) study the effects of variations in Canadian provincial laws regulating the use of replacements on strike activity.

This paper provides new evidence relating to three empirical questions raised in the policy debate over the Workplace Fairness Act: (i) How crucial is using permanent replacements to the employer's ability to continue operations during a strike? (ii) How does an employer's use of permanent replacements affect the reinstatement of striking bargaining unit members? (iii) How does the employer's use of permanent replacements influence bargaining outcomes?


The empirical analyses here use an augmented version of a database that Gramm (1990, 1991a, 1991b) constructed from two randomly selected samples: (i) a sample of stoppages from the population of "major" U.S. work stoppages (i.e., stoppages involving 1,000 or more workers) in progress during 1984-1988 and (ii) a sample from the population of work stoppages in progress in New York state during the same period. The New York population comprises stoppages involving six or more workers for the period ending before January 1986 but is limited to stoppages of 20 or more workers after that date. Both samples are limited to single firm bargaining units.

The U.S. sample offers the advantage of broad geographic scope but has the limitation of including only stoppages involving bargaining units of 1,000 or more workers. In contrast, the New York sample includes only two bargaining units that covered more than 1,000 workers. Including small unit strikes is useful because smaller strikes may significantly differ from major strikes (Skeels et al., 1988) and because opponents of the Workplace Fairness Act argue that denying employers the option of hiring permanent replacements will be particularly detrimental to small businesses.

Gramm obtained detailed information about each stoppage from a questionnaire mailed to a labor relations manager at the firm involved in the stoppage. She conducted the survey after the stoppages ended. Thus, the responses represent the respondents' records and recollection of what occurred.

Gramm initially pretested her questionnaire on small random samples of stoppages from both the U.S. and New York populations. Following the pretest, she modified the questionnaire and mailed it to labor relations managers in firms associated with larger random samples of stoppages from both populations. The analysis here is based on the subset of stoppages that occurred during contract negotiations in a sample combining the pretest and second samples from both populations. Combining these observations should not be problematic because both the pretest and second samples were selected at random from the same population. Thirty-five (58.33 percent) of the 60 managers in the U.S. sample and 22 (36.67 percent) of the 60 managers in the total New York sample, respectively, responded to the questionnaire. …

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