June 22: Felipe Balcazar (NYU)

Monday, June 22nd

Felipe Balcazar (NYU), Unions and robots: Technological change and the political power of organized labor

Abstract:
We explore the effects of technological innovation on unions levels of de facto political power. Using data for the United States, for the period 1993-2007, we show that the density of unions declines as a result of exposure to automation. Specifically, we find that one percent increase in the exposure to robots is related to 7.6 percentage points reduction in the number of unionized workers and a 1.1 percentage points reduction in the share of unionized workers. We also document lower public policy responsiveness to union’s interests in those areas most affected by automation. These findings are consistent with a theoretical model of distributive conflict wherein efficiency-enhancing technological change re-distributes de facto political power from labor to capital.