Geographic Spillover of Unionism

If a union successfully organizes one plant, does it make it easier to organize other nearby plants? If the answer is yes, there is a spillover effect from one plant to the next. If spillovers are important, then when a union gets it foot in the door and organizes some initial plants, unionism may spread like a contagion and turn a city into what trade unionists call a “union town.” The purpose of this paper is to quantify the extent of geographic spillover of unionism. Trade unionists and business people alike think that such spillovers exist, but there is virtually no economic research on this issue.2 There ought to be such research for three reasons. First, the research can potentially shed light on the process underlying the dramatic decline of unions in the U.S. in recent years. Existing research on this decline has focused on factors such as changes in the underlying structure of the economy and changes in the 1 I thank Alice Schoonbroot for helpful research assistance. The views expressed herein are solely those of the author and do not represent the views of the Federal Reserve Banks of Minneapolis or the Federal Reserve System. 2 Geographers have an interest in unions, see for example, the collection of papers in Herod (1998), but I have not found work related to the question I address.