Average hourly earnings in the industry in 1989 increased to $14.50, up 5.3 percent from the $13.77 level of 1987 ("Current Labor Statistics," 1990). Average weekly earnings in 1989 of $617.91, however, were up only 3.4 percent from the 1987 level of $597.62 ("Current Labor Statistics," 1990). Productivity in the industry trailed the national average through 1982; however, since that year, productivity improvement in the industry has exceeded the national average (Council of Economic Advisers, 1990).

In the absence of a major reversal in trends, employment levels in the steel industry may be expected to, at best, 3remain flat during the remainder of the 1990s. At worst, further declines could easily occur.

n resource problem examined is the effect on the American steel industry of the unionization of labor in the industry. At the outset of this examination, it must be recognized that the performance of the industry cannot be assessed solely within the context of the industry's relationship with organized labor. In fact, labor is no more than one of several major factors which contribute to steel industry performance, and it may not be the most significant of those factors. Thus, while it may be possible to state that high wages in the American steel industry contributed to its poor competitive performance, high wage levels may not be singled out as the sole cause of the industry's competitive decline. With mismanagement, a failure to reinvest (at an optimal level) profits in productive capacity improvements, a poorly thought out and implemented American industrial policy, inconsistent fiscal and economic policy, and other factors all contributing to the decline in competitiveness of the American steel industry, it is not only not feasible to attempt to completely isolate the effects of union activity on steel industry performance, it is probably not possible

One of the most persistent controversies surrounding the activities of labor unions is that of the ability of these activities to alter income distribution patterns within an 5economy, and the nature of such alteration should it occur. The unions claim that they alter the shares of national income between the workers (the owners of labor) and the companies (the owners of capital). For the moment, ignoring any claim that total national income is changed, the labor union argument is, quite simply, that they are able to obtain a greater share of total income for labor at the expense of capital. In this argument, it is held that both union and nonunion labor is benefited by this change in the income d