Unions and Robots : Automation and the Power of Labor

International economic competition has led to the increasing adoption of labor-replacing technology. What are the consequences of this development for the political influence of organized labor? I posit that robots make (skilled) workers more productive, increasing the opportunity cost of rent-seeking behavior via union activities. Consequently, the political influence of organized labor falls in response to robot adoption because unionization declines. I provide evidence for my claims using data from the U.S. (2004-2014) and a shift-share that leverages quasi-exogenous variation in international competition in the exposure to robots, at the congressional district level. An increase in one robot per a thousand workers reduces the likelihood that congresspeople vote with unions' interests by two percentage points. This effect is larger in areas with higher portions of skilled workers, lending support to the hypothesized opportunity-cost mechanism. Reductions in unionization, union activities and in campaign contributions in response to the exposure to robots explain this finding. Using demediation analysis I demonstrate that my findings are driven especially by lower unionization rates and not by the potentially competing effect of robots on unemployment