Labor Politics in a Weak Institutional Environment Structural Power and Strategic Alliances of Healthcare and Education Employees in East Central Europe

Abstract

This paper explores the sources of labour’s bargaining power in a weak institutional environment, by focusing on the answers that public sector employees gave to crisis-induced austerity and the atrophy of collective bargaining in East Central Europe. As a result of ever tighter budgetary constraints, governments introduced wage and employment cuts in the public sector unilaterally, sidestepping bargaining institutions all over Europe. In East Central Europe, the degradation of public sector collective bargaining is the latest step in labour’s institutional decline since the start of the transition to a market economy. Nevertheless, the paper argues that even under extremely unfavourable institutional conditions, public sector employees could mobilize resources to fend off some of the austerity pressures. These non-institutional sources of labour power include the structural position of different employee groups and their coalition building capacities. To assess how these factors affect bargaining power and eventually bargaining outcomes, the paper features a cross-industry comparison between public healthcare and education in the East Central European region. The paper argues that the level of analysis has to be shifted from the encompassing public sector to specific industries within the public sector: healthcare and education. Despite similar bargaining institutions in the two industries - central or local governments as the main bargaining partner and relatively high levels of bargaining coverage rates - healthcare employees managed to weather austerity pressures relatively well compared to teachers. Using Beverly Silver’s theoretical framework, the paper claims that healthcare workers enjoy higher levels of structural power than teachers because of the labour shortage characteristic of the healthcare industry. This power has been manifested through the recent bargaining successes that doctors and nurses achieved all over the region by capitalizing on the issue of mass emigration. This happened even in Hungary, which features a comparatively very weak system of interest representation. On the other hand, we see mostly examples of failures in the education sector, but the exceptional success of the 2012 Estonian teachers strike proves that the structural weakness of the education workforce can be counterbalanced by apt coalitional strategies. Estonian teachers gained wide-spread support from the general public, from unions in other industries and from Scandinavian trade union partners, while they managed to avoid direct alliances with political parties. Although the paper focuses on East Central Europe, its findings are relevant from a broader European perspective, as bargaining institutions are on the decline in most “old” EU-member states’ as well, bringing non-institutional sources of labour’s power to the fore.