UNIONS, GOVERNMENT, AND WAGES
ALTHOUGH ECONOMISTS concur generally on the principles governing wage determination, their disagreements about the effects of union action or government legislation upon either the level or structure of wages are significant. We have already referred to some of the hypotheses concerning the role of unions in wage determination, and in this chapter we shall bring them together for theoretical and statistical appraisal. Government legislation as well as union actions will also be considered, because both represent arbitrary interferences with the "natural" market, in the sense that wages might have been different if they had been determined by economic forces alone. Some writers take the position that such "arbitrary" actions have no appreciable effect upon wages in the last analysis, while others contend that unions (and governments) can and do raise wages. An occasionally expressed third view is that under certain well-defined circumstances unions may actually bring about lower wages than their members would otherwise receive. Despite their contradictory conclusions, most writers are quick to point out that their economic appraisals of wage "interference" by unions or governments are not total judgments of the value of unions. Unions serve other than economic functions, and whether they can or cannot raise wages does not determine how desirable they are from the viewpoint of their members or of society.
Methodologically, the question of whether unions can affect wages may be approached in two ways. The deductive approach uses a theoretical