The authors model the politics of wage and employment determination for unionized public-sector workers who can strike. If the employment level affects the identity of the decisive voter in budget referenda and other elections, then unions may be able to increase wages by increasing employment....

Union members may vote for a strike even if they do not expect to thereby increase their wages. For under majority voting any one member's vote for a strike is unlikely to be decisive. A union member who obtains a noninfinitesimal emotional benefit from the act of voting for a strike may...

Firms frequently use contests to compensate their employees: an employee's pay depends on the ranking of his output compared to that of others, rather than on the absolute level of his output. This paper analyzes the design of a contest which maximizes the contestants' expected aggregate output...