Abstract
Employment relations scholars argue that industrial relations institutions reduce low pay among the workforce, while the insider-outsider literature claims that unions contribute to increase the low-pay risk among non-union members. This article tests these expectations by distinguishing, respectively, between the individual effect of being a union member or covered by collective agreements and the sectoral effect of strong trade unions or encompassing collective agreements. Findings from multilevel logistic regression analyses of the German Socio-Economic Panel reveal that unions and bargaining coverage have distinct effects at individual and sectoral level. The analysis of their cross-level interactions provides partial support to both the insider-outsider approach, since non-union members are more exposed to the risk of low pay in highly unionized sectors, and to the power resource perspectives, since the probability of being in low pay in sectors with encompassing collective agreements decreases also for those workers who are not covered by them.
Highlights
With an average incidence of 16% of the workforce in Organisation for Economic Co-operation and Development (OECD) countries, low pay has been at the centre of political and academic debates on inequality and in-work poverty
The results suggest that all three variables are negatively related to low pay and significant, but the effects are larger for having both protections, followed by just having union membership and by just being covered without being a member
This article contributes to sociological debates on the relationship between industrial relations (IR) institutions and low pay
Summary
With an average incidence of 16% of the workforce in Organisation for Economic Co-operation and Development (OECD) countries, low pay has been at the centre of political and academic debates on inequality and in-work poverty. The probability of being in low pay decreases for those workers who are not covered by collective agreements – albeit to a lower extent than those who are covered – with the increase of sectoral bargaining coverage, in line with the expectations of the employment relations literature adopting a power resource (PR) approach. A series of sector-specific logistic regression on union membership and being covered by collective bargaining revealed wide variation in the size and significance of being a union member and being covered by an agreement on the probability of being in a low-pay job across sectors (see Figure A1.4.1 in the online appendix). The analysis was rerun using multilevel mixed effects linear models, with and without robust standard errors clustered at the sectoral level, and normal OLS regressions with sector fixed effects (see the online appendix)
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