A Theoretical Analysis of Trade Union Membership Fees, Bargaining Power, Wage Rate and Unemployment

Amnon Levy

Australian Economic Papers, 1998, vol. 37, issue 4, 404-413

Abstract: The positive effect of membership fees on trade unions' cohesion and commitment and the adverse effect of these fees on trade unions' density imply that the effects of membership fees on trade unions' bargaining power, wage rate and unemployment can be depicted by inverted U‐shaped curves whose upper bounds are reached when membership fees are set at half the ratio of the upper‐bound on members' level of satisfaction from the trade union services to their disposable income rate. The implications of these effects for membership fees are analysed for a trade union that sets its membership fee so as to minimise the loss stemming from missing wage rate and unemployment targets.

Date: 1998
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