Harold Jenkins has some thoughts in this recent Wall Street Journal column about why a new Wal-Mart in some region may drive down the average wages of workers.
...It's easy to believe, as claimed by one study last week, that when Wal-Mart opens a new supercenter in a county, the average retail wage in that county falls. That's the effect of Wal-Mart taking out traditional unionized supermarket jobs. And not just Wal-Mart. The unionized grocery sector is under siege from a host of new competitors: Whole Foods, Costco, Dollar General, SuperTarget, as well as classic supermarket chains like Save-a-Lot and Harris-Teeter. All are non-union. Even Sears is adding groceries because it sees an opportunity.
In most industries, unionized jobs pay better than non-unionized jobs. Believe it or not, there are some occupation al groups where union jobs, excluding all benefits but the size of the paycheck, pay less than non-union jobs, at least on average. "Computer and mathematical occupations" is one occupational group. Finance and Insurance occupations are another. But retail trade is not one of those occupational groups.
When unionization leads the employer to provide less value at the margin to its customers, this opens the doors to entrepreneurs to enter the market and compete. For example, unionization can lead to more bureaucracy at the firm which could, in turn, make the firm less fluid when it comes to customer service. It's not only happening in retail but it's also happening in the airline industry with employers such as Northwest Airlines and the auto industry with employers such as GM who are heavily unionized.
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