Two Faces of Union Voice in the Public Sector.

This article discusses the influence of labor unions on the public sector. In their classic article on the Two Faces of Unionism and their subsequent book, What Do Unions Do?, Freeman and Medoff (1979, 1984, respectively) emphasized the positive-voice face of unions in contract to the conventional monopoly face that emphasized rent extraction. Under its monopoly face, unions can have negative effects on resource allocation, productivity, and social welfare by fostering strikes and restrictive work practices as well as by raising wages above the competitive norm. In contrast, by serving as the institutional embodiment of voice at the workplace, Unions could have positive effects on productivity, cost, and social welfare.