The Guaranteed Wage-The Economics of Opulence in Collective Bargaining

Abstract

I MPORTANT segments of the trade union movement in this country have adopted the guaranteed wage as a major objective of collective bargaining. While no stern test of the ability of the unions to win such guarantees has as yet occurred, the proposals advanced have been widely discussed from the point of view of their adaptability to mass production industries and their potential economic consequences. The purpose of this paper is to examine the union demand for wage or employment guarantees primarily as an inevitable outgrowth of the pressures generated by collective bargaining. The main focus of interest will be neither the feasibility of the proposals nor their desirability as an income security measure in the labor market; rather, an attempt will be made to explore the essential reasons for the emergence of the guaranteed wage demand in the collective bargaining forum at this particular time. Regardless of whether or not guaranteed wage plans eventually become widespread in one form or another, the current demand is an interesting example of a general type of bargaining proposal which will continue to spring from the dynamics of trade union development and the existing labor-management situation, and which will evoke similar attitudes and arguments from the main parties-atinterest. The development of a stable, massive, essentially democratic trade union movement creates a market for the novel, the striking, proposal for change in the mechanism or content of employeremployee relations. The trade union leader, in adjusting to the market, becomes the innovator, applying whatever ingenuity he possesses to the formulation of demands which are both meaningful to union members and appropriate to a given of collective bargaining. In the guaranteed wage, the union has an issue with great political sales appeal for its own constituency, the membership, and for the community at large; at the same time the demand fits the pattern of collective bargaining in what might be called the stage of opulence.' Basic survival needs have been satisfied, union recognition has been achieved, changes in wage rates bear a reasonably acceptable relationship to changes in cost-of-living and productivity, and the agreement already provides some protection against the economic hazards of old age, sickness, and disability. But control of layoff, in respect to volume and timing, remains almost altogether as a discretionary power of the employer.