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Article
Wage Bargaining under the National Labor Relations Act
Journal of Economics and Management Strategy
  • Jesse Schwartz, Kennesaw State University
  • Quan Wen, Vanderbilt University
Document Type
Article
Publication Date
1-1-2006
Abstract

Sections 8(a)(3) and 8(a)(5) of the National Labor Relations Act (NLRA) prohibit the management of a firm from unilaterally increasing the wage during contract negotiations without the union's approval. We show how the management can strategically increase the wage during negotiations without violating the NLRA. Increasing the wage during negotiations will upset the union's incentive to strike and decrease the union's bargaining power, thereby shrinking the set of equilibrium contracts in the firm's favor. Indeed, as the union becomes more patient, the set of equilibrium wages converges to the best equilibrium outcome to the firm.

Digital Object Identifier (DOI)
10.1111/j.1530-9134.2006.00126.x
Citation Information
Schwartz, Jesse A., and Quan Wen. "Wage Bargaining under the National Labor Relations Act." Journal of Economics and Management Strategy 15.4 (2006): 1017-1039.