Labor Unions and the Distribution of Wages and Employment in South Africa

• Published in: Industrial & labor relations review Vol. 51; no. 4; pp. 680 - 703
• Main Authors: Schultz, T. Paul, Mwabu, Germano
• Format: Journal Article
• Language: English
• Published: Los Angeles, CA New York State School of Industrial and Labor Relations, Cornell University 01.07.1998; SAGE Publications; ILR Review, Cornell University, ILR School; Cornell University, New York State School of Industrial and Labor Relations; SAGE PUBLICATIONS, INC
• Series: Industrial and Labor Relations Review
• Subjects: Black White Differences; Collective bargaining; Councils; Economic models; Employment; Enrollment; Income distribution; Income Inequality; Industrial unions; Inequality; Labor; Labor economics; Labor force; Labor Force Nonparticipants; Labor Force Participation; Labor market; Labor markets; Labor unions; Labour market participation; Men; Nonunion; Relative wages; South Africa; South Africa, Republic of; Studies; Trade union membership; Trade unions; Unemployment; Union labor; Union Members; Union membership; Unions; Urban Areas; Wage differential; Wages; Wages & salaries; Whites; Workers; Workforce; Youth employment; South Africa
• ISSN: 0019-7939; 2162-271X
• DOI: 10.1177/001979399805100407

Few countries have higher wage inequality than South Africa, where wages of African and white workers differ by a factor of five. Using survey data collected in 1993, the authors analyze the complex effect of unions on this wage gap. Among male African workers in the bottom decile of the wage distribution, union membership was associated with wages that were 145% higher than those of comparable nonunion workers, and among those in the top decile the differential was 19%. Regression estimates also indicate that returns to observed productive characteristics of workers, such as education and experience, were larger for nonunion than union workers. If the large union relative wage effect were cut in half, the authors estimate that employment of African youth, age 16-29, would increase by two percentage points, and their labor force participation rate would also increase substantially.