The response of union utility to labor-saving innovation is analyzed w
ithin a framework of oligopolistic competition in the product market,
taking account of wage bargaining under several alternative structures
of industrial relations. Conditions are established under which wages
and employment will rise or fall in response to innovation. Union opp
osition tends to occur when union preferences are weighted in favor of
jobs and labor demand is perceived to be inelastic. Thus opposition i
s more likely with industry- or craft-based union organization in nonc
ompetitive industries and is less likely with enterprise unionism in c
ompetitive industries.