WAGE AND EMPLOYMENT DETERMINATION IN MUNICIPAL GOVERNMENTS IS THE FOCUS OF THIS STUDY. ISSUES MOST FREQUENTLY RAISED BY THE RISE IN MUNICIPAL UNIONISM ARE THE NATURE OF THE APPROPRIATE LEGAL FRAMEWORK IN WHICH TO CONDUCT MUNICIPAL EMPLOYEE LABOR RELATIONS AND THE EXTENT TO WHICH MUNICIPAL EMPLOYEE UNIONS ARE RESPONSIBLE FOR THE ACCELERATING COST OF PROVIDING PUBLIC OUTPUT. EMPIRICAL LITERATURE ON MUNICIPAL UNION WAGE AND EMPLOYMENT EFFECTS IS CRITICALLY REVIEWED, AND THE WAGE ELASTICITY OF DEMAND FOR VARIOUS CATEGORIES OF MUNICIPAL EMPLOYEES IS EXAMINED. THE PROPOSED THEORETICAL MODEL FOR ANALYZING THE IMPACT OF UNIONS TAKES INTO ACCOUNT POLITICAL MOTIVATIONS OF MUNICIPAL DECISIONMAKERS, THE UNIQUE ROLE OF MUNICIPAL EMPLOYEE-VOTERS IN THE PUBLIC ALLOCATIVE PROCESS, AND THE EXPLICIT INTEGRATION OF THE POLITICAL ROLE OF UNIONS INTO THE THEORETICAL FRAMEWORK. PRINCIPAL FEATURES OF THE MODEL ARE: (1) DECISIONS ABOUT MUNICIPAL TAXES, SERVICES, WAGES, AND EMPLOYMENT ARE MADE BY MUNICIPAL OFFICIALS; (2) THE NUMBER OF VOTES WHICH INCUMBENTS MAY ANTICIPATE IS A FUNCTION OF THE EXTENT TO WHICH VOTERS ARE SATISFIED WITH THE PERFORMANCE OF OFFICIALS; (3) MUNICIPAL OFFICIALS, IN MAXIMIZING VOTES, FACE MULTIPLE AND DIVERSE CONSTITUENCIES; (4) EACH SUBCONSTITUENCY VOTE FUNCTION DERIVES FROM STANDARD UTILITY ANALYSIS AND FOLLOWS THE MEDIAN VOTER APPROACH; (5) IN MAXIMIZING VOTES, INCUMBENTS ATTEMPT TO SELECT VALUES OF ENDOGENOUS VARIABLES TO PROVIDE THE BEST COMBINATION TO THE MOST CONSTITUENTS WHO MAY VOTE; AND (6) MUNICIPAL EMPLOYEE UNIONS MAY AFFECT THE VOTER PARTICIPATION OF THEIR MEMBERS AND LIKE-MINDED VOTERS, THUS AFFECTING MUNICIPAL DECISIONS ON WAGE AND EMPLOYMENT LEVELS. EQUATIONS INVOLVED IN AND DATA DERIVED FROM THE ESTIMATION PROCEDURES FOR EVALUATING UNIONISM ARE PRESENTED. IT IS DEMONSTRATED THAT THERE IS A SIGNIFICANT UNION EMPLOYMENT EFFECT FOR FIREFIGHTERS BUT NOT FOR POLICE. THE DEMAND FOR POLICE OFFICERS IS HIGHLY INELASTIC, WHILE THE DEMAND FOR FIREFIGHTERS IS RELATIVELY MORE ELASTIC. THE IMPLICATIONS OF COLLECTIVE BARGAINING FOR POLICYMAKING ARE DISCUSSED. REFERENCES AND TABULAR AND GRAPHIC DATA ARE PROVIDED. (DEP)