Collective Bargaining In Skill And Knowledge Intensive Occupations:

 Why Collective Bargaining Did Not influence The Yule Distribution Of NBA Salaries Following The New Collective Bargaining Agreement

Jonathan R. Anderson is an Assistant Professor of Management and Business Systems at the University of West Georgia's Richards College of Business. You can contact him at janderso@westga.edu.

Discussion of Findings

The paper I am responding to empirically tests whether the Yule distribution fits the salary distribution of NBA players. The Yule distribution is a mathematically-based, evolutionary concept that suggests a small number of species occupy the largest space on the planet, while many different species will remain few in number. That is, life is rather narrowly distributed to a few species rather than broadly distributed to many. It opposes the Darwinian perspective which suggests that species are replaced over time by new and improved species. It has been expanded to test a large number of phenomenon as varied as why freshman cite a small number of sources many times, rather than selecting from a large variety of sources a few times.  Finally, in the article in this issue of B>Quest, "The Effect of the New NBA Agreement on Superstar Pay," it is used to determine why there is such variance in the salary range of players in the National Basketball Association with only a few players being relatively highly paid, hence the superstar phenomenon.

The first aim of the cited article is to empirically test whether the Yule distribution fits that salary dispersion of NBA players. If it does,  this would suggest that a small number of players receive large amounts of money, while a larger number of players receive smaller salaries. This was supported in the data cited in this article. The author then suggests that the collective bargaining agreement reached in 1999 between the National Basketball Players Association and the National Basketball Association (http://www.nbpa.org/cba) may have decreased the Yule distribution of salaries within the NBA and reduced the dispersion of  pay at least somewhat.This was not supported, and the only significant changes following the collective bargaining agreement were in points, assists, and years (tenure in the NBA). Thus, the Yule distribution fit salary both before and after the collective bargaining agreement. The author discussed these findings by suggesting that the collective bargaining agreement did not influence salary dispersion, but that teams began to reward “team players” over the time period, rather than high point scoring superstars.

In addition to focusing on changes in the skill type of highly paid players over time, it is also worth asking, why didn’t the collective bargaining agreement influence the Yule salary dispersion? Why is it that the collective bargaining agreement did not 'fix' the Yule distribution in the NBA? This is possibly better understood with a brief summary of the aims and history of collective bargaining.

History and Aims of Collective Bargaining

For decades collective bargaining has been a part of our national economic and industrial structure Collective bargaining seeks to protect and improve wages, create equity between, and improve working conditions for groups of employees. For decades it has been a major tool for labor unions and business organizations to come to agreement on what constitutes fair pay and equitable working conditions.

Collective bargaining has historically been targeted at protecting the interests of employees in the working class. Many examples of the importance of collective bargaining agreements exist, including the tragic incident riveted in our nation’s industrial history of the Triangle Shirtwaist Factory fire of 1911 (Pence, Carson, Carson, Hamilton III, & Birkenmeier, 2003) . By binding themselves together, working class employee such as mechanics, textile workers, manufacturing employees, and pipe fitters have greater power in negotiating with their employer than any individual employee would have. Collective bargaining aimed to bind together the weak to create a synergistic unit with power for all employees. In traditional collective bargaining, weak union members are protected as a part of the bound between unionized employees.

Challenges to Collective Bargaining in Skill and Knowledge Intensive Occupations

Within the last few decades collective bargaining has expanded to include employees in many professions. While many of these professional unions protect weaker workers, the concept of collective bargaining takes a different meaning when individual employees covered by an agreement have meaningful characteristics that create valuable and measurable distinctions between them. Players in the National Basketball Association have measurable outcome differences that may not be so apparent between pipe fitters or textile workers. In a traditional collective bargaining agreement, employees are considered commodities. If an airline pilots union is negotiating with the airline, the pilots are considered by the outside body (the airline) as similar in talent and skill. It does not necessarily matter who is flying the plane as long as they have met the requirements of union membership.

The aim of collective bargaining is to protect all workers against the whims of the business organization and management. Although a collective bargaining agreement does protect valuable distinctions between employees such as tenure and rank, these distinctions are identified and rewarded by the union side of the agreement. However, when collective bargaining agreements cover employees who are not commodities because there are distinct and measurable differences between them, we would not expect the agreement to drastically influence pay differences between employees, regardless of the tenets of the agreement. It may influence working conditions required by teams and the ability of teams to trade players, but it cannot influence the Yule distribution of salary between players, as individual output is measurable and valuable. We would then expect that there would not be a difference between the Yule distribution of NBA salaries before and after the collective bargaining agreement as the results obtained by the author of this article show.

The Undying Yule Distribution