Globalization and Declining Unionization in the United States

18 Pages Posted: 16 Mar 2007

See all articles by Matthew J. Slaughter

Matthew J. Slaughter

Dartmouth College - Tuck School of Business; National Bureau of Economic Research (NBER)


For decades, the private-sector unionization rate in the United States has been falling. At the same time, the integration of the United States into the world economy has been rising. Many anecdotes suggest the latter has played a role in that decline, with unions feeling pressured to reduce employment and/or compensation demands in the face of rising cross-border activity of employers. To investigate this possibility econometrically, in this paper I assembled a panel of U.S. manufacturing industries that matches union-coverage rates with measures of global engagement such as exports, imports, tariffs, transportation costs, and foreign direct investment. The main finding is a statistically and economically significant correlation between falling union coverage and greater numbers of inward FDI transactions. Possible interpretations of this finding are then discussed. Because U.S. affiliates of foreign multinationals have higher unionization rates than U.S.-based firms do, this correlation does not reflect just a compositional shift toward these affiliates. Instead, it may reflect pressure of international capital mobility on U.S.-based companies, consistent with research on how rising capital mobility raises labor-demand elasticities and alters bargaining power.

Suggested Citation

Slaughter, Matthew J., Globalization and Declining Unionization in the United States. Industrial Relations: A Journal of Economy and Society, Vol. 46, No. 2, pp. 329-346, April 2007. Available at SSRN: or

Matthew J. Slaughter (Contact Author)

Dartmouth College - Tuck School of Business ( email )

Hanover, NH 03755
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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