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Facts and Fantasies about Wage Setting and Collective Bargaining
In this article, we document and discuss salient features of collective bargaining systems in the OECD countries, with the goal of debunking some misconceptions and myths and revitalizing the general interest in wage setting and collective bargaining. We hope that such an interest may help close the gap between how economists tend to model wage setting and how wages are actually set. Canonical models of competitive labor markets, monopsony, and search and matching all assume a decentralized wage setting where individual firms and workers determine wages. In most advanced economies, however, it is common that firms or employer associations bargain with unions over wages, producing collective bargaining systems. We show that the characteristics of these systems vary in important ways across advanced economies, with regards to both the scope and the structure of collective bargaining.
Journal Article
A collective bargain : unions, organizing, and the fight for democracy
\"From longtime labor organizer Jane McAlevey, a ... call-to-arms in favor of unions\"-- Provided by publisher.
Book
The German Model of Industrial Relations
We give an overview of the “German model” of industrial relations. We organize our review by focusing on the two pillars of the model: sectoral collective bargaining and firm-level codetermination. Relative to the United States, Germany outsources collective bargaining to the sectoral level, resulting in higher coverage and the avoidance of firm-level distributional conflict. Relative to other European countries, Germany makes it easy for employers to avoid coverage or use flexibility provisions to deviate downwards from collective agreements. The greater flexibility of the German system may reduce unemployment, but may also erode bargaining coverage and increase inequality. Meanwhile, firm-level codetermination through worker board representation and works councils creates cooperative dialogue between employers and workers. Board representation has few direct impacts owing to worker representatives’ minority vote share, but works councils, which hold a range of substantive powers, may be more impactful. Overall, the German model highlights tensions between efficiency-enhancing flexibility and equity-enhancing collective action.
Journal Article
From conflict to coalition : profit-sharing institutions and the political economy of trade
This book studies the conditions under which labor and capital collaborate in support of the same trade policies.
Book
Capital Structure as a Strategic Variable: Evidence from Collective Bargaining
I analyze the strategic use of debt financing to improve a firm's bargaining position with an important supplier—organized labor. Because maintaining high levels of corporate liquidity can encourage workers to raise their wage demands, a firm with external finance constraints has an incentive to use the cash flow demands of debt service to improve its bargaining position with workers. Using both firm-level collective bargaining coverage and state changes in labor laws to identify changes in union bargaining power, I show that strategic incentives from union bargaining appear to have a substantial impact on corporate financing decisions.
Journal Article
Is There Any Future for a US Labor Movement?
A recent flurry of labor movement activity has been driven by younger workers, tight labor markets, and a sympathetic federal government. Nonetheless, US union density remains low, even as unions remain popular. This is because employer opposition and US labor law together imply that workers need to overcome substantial collective action problems at work in order to win union recognition and collective bargaining agreements. These barriers make dense social networks and high levels of social capital at work a prerequisite for unionization. Labor organizing can build this social capital, but faces an uphill battle without policy changes that extend collective bargaining across employers and up the value-chain and make unionization easier. Partnering with labor unions, researchers can study theoretical problems of collective action while also getting a window into what strategies of a renewed labor movement may work.
Journal Article
Solidarity and conflict : European social law in crisis
\"The ongoing austerity crisis is being felt in all sectors of EU law, but has had a particularly severe impact on labour law. Silvana Sciarra, a leading judge and scholar of EU employment law, considers how solidarity regimes have been shaken by the crisis. She brings together existing European policies in social and employment law, to enhance synergies and developments in a post-crisis discourse. She looks at reactions of national constitutional courts to austerity measures and of international organizations in re-establishing respect of fundamental workers' rights. Criticizing soft law approaches in employment policies, she favours recourse to binding measures connected with selective financial incentives through European funds. She highlights developments in European sector social dialogue and new horizons of transnational collective bargaining in large multinationals. Taking a positive, practical approach, Sciarra shows how social policies can enhance solidarity and social cohesion, through European financial support\"-- Provided by publisher.
Book
The transformation of pay determination in Ireland
The collapse of social partnership in 2009 and several ensuing years of concession bargaining forced Irish unions to innovate in order to restore pay growth and improve conditions. Drawing on a unique dataset of over 1,600 pay agreements, alongside interviews and case studies, this paper provides the first comprehensive analysis of Ireland’s decentralised and primarily firm-level pay-bargaining system since the global financial crisis. Contrary to international portrayals of pay determination in Ireland as uncoordinated and fragmented, the paper reveals how unions have maintained effective pay coordination mechanisms. The analysis traces the shift from company-level ‘pattern bargaining’ to a ‘flexible coordination’ model, shaped by evolving economic and institutional conditions. Findings show that unions have delivered sustained real pay growth, contained pay dispersion, and secured significant improvements in working conditions, while preserving industrial peace. The paper also examines emerging efforts to institutionalise social dialogue and assesses the likely impact of these efforts on the future trajectory of collective bargaining in Ireland. Overall, the study highlights the adaptability and resilience of Irish unions in navigating a liberal market economy, while safeguarding workers’ pay and conditions.
Journal Article