Seniority wage increases in union contracts serve as initiation fees.
The article looks at how seniority rules in union contracts can benefit early union members. By using a model that looks at different generations, the researchers found that seniority wage increases act as fees for joining the union. Layoff rules are only needed when organizers have limited contract options; otherwise, full insurance is the best option. The study suggests certain constraints organizers may face and explains when seniority layoff rules are most effective.