Bargaining Institutions Research Articles

Monetary Union and Wage Bargaining Institutions in the EU

This article considers the question of how monetary union in the EU is likely to impact the preferences of governments, employers, and unions regarding the organization of wage bargaining. European Monetary Union involves a decentralization of wage bargaining (centered at the national level) in relation to monetary policy (centralized at the European level). Drawing on recent literature and on the experience of two member states (Italy and Spain), which, prior to EMU, underwent periods of intense bargaining fragmentation, the author argues that the imposition of restrictive monetary policy in a fragmented wage bargaining context in which workers nonetheless have substantial bargaining rights tends to have perverse effects. These effects ultimately led governments and bargaining actors in Italy and Spain to seek a reorganization of bargaining that gave national actors greater control over wage setting. The article considers to what extent a similar dynamic might play out in the Euro zone.

Project Work in Context: Regulatory Change and the New Geography of Media

Like all forms of work, project work is constructed within the rules that govern labor and capital markets. In this paper, I examine how project work and the project workforce in ‘old’ media (motion pictures and television) and ‘new’ media (multimedia or Internet-based information, entertainment, and infotainment) have been affected by changes in the regulatory regime governing entertainment and information-intensive industries in the United States. Of particular significance is the role that collective bargaining institutions play in industry governance. In the case of old media, the regulatory regime initiated in the 1980s by the Reagan administration considerably reshaped the terrain for media production. ‘Virtual integration’ of a substantial portion of production resulted in the routinization of project work and decreased the need for collocation of preproduction, production, and postproduction in Los Angeles, the ‘home base’ of these industries. Old media, however, retained the key governance organizations that predated changes in regulation, particularly guilds and unions. New media, by contrast, emerged in the 1990s era of laissez-faire regulatory policy. ‘Consent decrees’, regulating competition in a wide range of industries were lifted, allowing firms to acquire, merge, and move freely both to concentrate economic power and to diversify. Unlike their old-media counterparts, new-media workers (and their employers) did not have the intermediary institutions to set the rules for employment, to define roles in project production, or to facilitate project management. For the new-media worker, and his or her employers, stronger dependence on interpersonal connections for credentials, legitimacy, and job match means stronger dependence on regional markets. The history of change and continuity in media project work can illuminate broader questions, such as how market regulation affects the location strategies of firms and workers.

Employers and the Persistence of Centralized Wage Setting

Recent research indicates that centralized collective bargaining institutions are more resilient than predicted by the conventional wisdom, which viewed them as incompatible with new competitive conditions and newproduction strategies. Drawing on a case study of Norway, the author argues that one reason for this resilience is that centralized wage setting may be actively supported by employers because it serves important employer interests. It has helped moderate wage growth, reduced transaction costs, contributed to stable industrial relations, and provided political leverage for employer organizations. The author also argues that institutional change must be viewed in terms of its economic and institutional context. There has been some formal devolution of bargaining capacity to the level of the individual firm in Norway, Sweden, and Denmark. However, these changes have been accompanied by institutional changes, instigated by employers, that have increased the coordinating capacity of labor market actors. Labor markets in all three countries remain highly institutionalized.

The Architecture of Militancy: Workers and the State in Algeria, 1970-1990

capital relations in late industrializing countries. How can labor's varying responses to privatization, subsidy reduction, and other reforms that undermine long-standing state-labor relationships be explained? Why do workers develop strong collective identities and strategies in some cases but not in others? Why does militancy remain focused on workplace issues in some cases while elsewhere it takes up broader social and political grievances? Moral economy and macrostructural analyses figure prominently in efforts to answer these questions. This article evaluates these two frameworks through an examination of state-labor relations in Algeria from the early 1970s through the late 1980s. Algeria is a case where both approaches might be expected to fare well. While its experience conforms to important moral economy and macrostructural expectations, it also confounds both frameworks. This article identifies these points of conflict and proposes an alternative that accounts more successfully for Algeria's pattern of state-labor relations. This alternative involves a historical institutionalist analysis that emphasizes the ways in which wage bargaining and other labor institutions distribute power and uncertainty across the work force. These institutions play a key role in shaping the formation of collective identities. Institutions established by the Algerian government helped to generate a wave of worker unrest in the middle and late 1970s, but these institutions also created divisions within the work force that prevented the rise of a politicized working class movement. New institutions in the late 1980s sparked even greater unrest, but these institutions bridged divisions and encouraged the development of a more unified and politicized labor movement.

Much More Than a Game: Players, Owners, and American Baseball since 1921

Power struggles off the field To most Americans, baseball is just a sport; but to those who own baseball teams - and to those who play on them - our national pastime is much more than a game. In this book, Robert Burk traces the turbulent labor history of American baseball since 1921. His comprehensive, readable account details the many battles between owners and players that irrevocably altered the business of baseball. During what Burk calls the paternalistic era, from 1921 to the early 1960s, baseball's management rigidly maintained racial segregation, established a network of southern-based farm teams to serve as a captive source of cheap replacement labor, and crushed attempts by players to create collective bargaining institutions. In the 1960s, however, the paternal order crumbled, eroded in part by the civil rights movement and the arrival of television. As a consequence, in the inflationary era that followed, both players and umpires established effective unions that successfully pressed for higher pay, pensions, and greater occupational mobility - and then fought increasingly bitter struggles to hold on to these hard-won gains.

Institution building under “10+3”: Tackling the practical issues

Using institution‐building theory from the school of neoliberalism, the paper examines the role of leadership and institutional bargaining in moving the “10+3” regional cooperation framework forward. The core argument developed here is that close cooperation between Japan and China is key to the future of “10+3”, and ASEAN states and South Korea should utilize the “10+3” platform for bringing Japan and China together. Finally, some ASEAN states’ fear that a more integrated East Asia will mean the withdrawal of U.S. presence in the region is very remote.

Politics and Unemployment in Industrialized Democracies

This paper provides an empirical appraisal of the influence ofpolitics on the evolution of unemployment rates in 13industrialized democracies (12 European Union countries andthe U.S.) from 1960 to 1999. We conduct new tests ofopportunistic and partisan business cycle models, using richerdata and more general specifications than previous studies. Incontrast to most previous studies, we pay particular attentionto the importance of labor market structure in conditioningthe influence of politics on unemployment. We also investigatethe relationship between political stability and economicstability. The results suggest the existence of partisan effects, withhigher unemployment rates prevailing under ``right'' partiesthan ``left'' parties. There is more support for ``rational''partisan models that embody transient partisan impacts thanfor models with permanent effects. We find evidence that unionpower is associated with higher average unemployment rates,but that centralized bargaining institutions tend to lowerunemployment rates. The evidence also suggests that morefragmented coalition governments are associated with higherunemployment rates than single party governments.

The Impact of Wage-Setting Institutions on the Incidence of Public Employment in the OECD: 1960-98

Using data on 17 OECD countries for 1960-98, this paper studies the impact of unions on public employment incidence, using macrodata and microdata. Macrodata show that greater coverage by centralized collective bargaining institutions raises the public employment share, controlling for country effects and country-specific trends. Microdata show that this effect is more positive for outsiders: women, and younger and older men, suggesting that government is employer of last resort. Greater unionization lowers public sector wage premia, particularly for women, suggesting that some of the public employment results may reflect movements along the labor demand curve rather than conscious policy.

Employment and competitiveness as challenges for collective bargaining: a global perspective

This article explores the changing focus of collective bargaining within the context of the global drive for competition. The first section describes how the main items on the agenda for collective bargaining have shifted from income distribution to means of promoting and protecting employment and competitiveness, and explains how mass unemployment and precarious employment have pushed employment security to the top of the collective bargaining agenda. Technological change, the increasing globalisation of the economy, the formation of regional economic groupings, and the intensification of competition between firms in the product market have all contributed to the pressure on collective bargaining institutions to improve competitiveness. The second section examines innovative approaches to dealing with the issues of employment protection, creation and competitiveness by highlighting the collective bargaining experiences of a number of countries outside of the European Union.

The Interaction of Wage Bargaining Institutions and an Independent Central Bank - A Methodological Reflection on Current Theories

The paper analyses the increasingly popular literature on strategic interactions from a methodological viewpoint. These political economy approaches focusing on interactions between wage bargaining institutions and an independent central bank do not follow unified methodological rules and so cannot be categorised under a single particular paradigm. Moreover, the literature remains in a way circumscribed by the limits of our logical capacities and of mathematical tractability and therefore relates to the ''real world'' of wage bargaining and economic policy institutions in a very limited way only. A consideration of the vast complexity of institutional conditions that impact economic performance in EMU reminds and cautions one that actual economic policy research is able to cover only very few of the numerous conditions responsible for the overall outcome.

Social dialogue in EU enlargement: acquis and responsibilities

The article presents the different reasons why social dialogue is important in the current EU enlargement process. First because of developments of social dialogue at the Community level, described in the first section, from its establishment in the Treaty of Rome, to Delors' Val Duchesse initiative in the mid-1980s to the new rights for the social partners under the Amsterdam treaty and the new 'macroeconomic dialogue'initiated at the Cologne Economic Summit in 1999. Second, because social dialogue is clearly part of the current legal and institutional acquis, implying important responsibilities for the social partners. The third section discusses the implications for the social partners in the candidate countries. In particular they are called upon to play a more active role in their respective country's accession negotiations, to support implementation of the acquis 'on the ground', and to prepare themselves for participation in European social dialogue. Currently, collective bargaining institutions at both enterprise and supra-enterprise level remain underdeveloped in the CEECs, placing a question mark over implementation of some aspects of the acquis. Social dialogue is an important part of the acquis communautaire, and substantial efforts on the part of governments and the social partners in the candidate countries will be required prior to accession.

Unions in Decline? What Has Changed and Why

Between 1950 and 1980, labor markets grew increasingly organized in advanced industrial societies. Union membership in most countries expanded more rapidly than the labor force, centralized wage setting became more common, and union members became increasingly concentrated in a small number of large unions. Between 1980 and 1992, however, union density fell on average, and centralized wage setting grew increasingly rare. Only union concentration continued to increase in the 1980s. Existing theories of union organization and collective bargaining institutions are largely successful in explaining both the trends over time and much of the cross-national variation from 1950 to 1980, but they fail to account for the dramatic declines in union strength that some (but not all) countries have experienced since 1980.

International Trade and the Skill Structure of Wages and Employment in West Germany / Außenhandel und die Qualifikationsstruktur von Löhnen und Beschäftigung in Westdeutschland

Summary Building on a Heckscher-Ohlin-Samuelson framework with factor price rigidities, this paper provides an empirical analysis of the relationship between trade, technical progress, and the labor market in West Germany for the period from 1970 until 1990. The analysis builds on relative product prices as the major transmission channel of trade effects on the labor market and allows for three skill types of labor. The major findings are that, relative to skilled labor, wages were increasing disproportionately both for low- and high-skilled labor whereas employment trends were favoring higher skill levels monotonically. Import competition as well as total factor productivity were increasing disproportionately in those industries using low- or high-skilled labor intensively. These results are consistent with trade effects dominating for low-skilled labor and technology effects for high-skilled labor while wage bargaining institutions were holding up relative wages of low-skilled labor. The combined effect accounts for the disproportionate increase of unemployment for low-skilled workers.

Institutional uncertainties in international fisheries management

Around the world, many commercial fisheries are in crisis. The failure of the traditional management models, centered on calculations of maximum sustainable yields (MSY) from individual species or stocks has complicated efforts to come to terms with this situation. A growing emphasis both on interdependencies in large marine ecosystems (LMEs) and on the non-linear or chaotic changes that are prominent features of these systems highlights the biophysical uncertainties affecting fisheries management. Less familiar is the proposition that efforts to manage fisheries are affected by institutional uncertainties as well. These uncertainties stem from: (1) contradictions embedded in fisheries regimes as an outgrowth of institutional bargaining, (2) vague or ambiguous formulas arising from the pressures of negotiation processes, (3) the complexity of specific institutional arrangements, (4) gaps between regimes on paper and regimes in practice, (5) compliance problems, (6) linkages between individual fisheries regimes and other international institutions, and (7) limited capacity to forecast how fisheries regimes will evolve over a period of time. Not all institutional uncertainties are bad. The existence of a thick `veil of uncertainty,' for example, may contribute to the development of successful fisheries regimes by giving participants incentives to pay attention to considerations of fairness. But any effort to manage international fisheries effectively must reckon with the existence of institutional as well as biophysical uncertainties in this realm.

Wage Bargaining, Hard Money and Economic Performance: Theory and Evidence for Organized Market Economies

The political and economic couplings between wage bargaining institutions and macro-economic policy regimes are explored in this article. It is argued that in advanced industrialized democracies with well-organized unions and employers' associations, macro-economic performance (especially unemployment) is the outcome of an interaction between the centralization of the wage bargaining system and the monetary policy regime. Thus, a decentralized bargaining system in which the government in credibly committed to a non-accommodating monetary policy rule poses an institutional alternative to a centralized mode of wage regulation where the government enjoys macro-economic policy flexibility. Based on time-series data from ten highly organized market economies, I show that both of these institutional ‘equilibria’ produce superior employment performance, but also that the two systems are associated with very different distributional outcomes, and that they are supported by different coalitions of organized interests. In addition to predicting economic outcomes, the proposed model provides a theoretical framework for analysing institutional change in wage bargaining systems and in macro-economic policy regimes.

The Fragmentation of the Bargaining Society

It is commonly believed that corporatist bargaining institutions have been in general decline in the 1980s and 1990s. The leading explanations of the purported universal trend toward greater decentralization of collective bargaining are the impact of technological change, changes in the occupational structure, and growing international economic integration. Decentralization should be particularly visible in the Nordic countries, because collective bargaining was more centralized in these countries in the 1960s and 1970s than in any others in Western Europe. In this article, the authors present data on the changes in the centralization of wage bargaining in the four Nordic countries since 1950. They document that a significant decentralization of collective bargaining has occurred in Sweden, as is well known, but not in the other three. The article concludes with a review of possible explanations of Swedish exceptionalism.

Unions, Employers' Associations, and Wage-Setting Institutions in Northern and Central Europe, 1950–1992

The eight countries examined in this study—Austria, Belgium, Denmark, Finland, Germany, the Netherlands, Norway, and Sweden—have long been viewed as exemplifying “corporatist” industrial relations systems, in which union coverage is high, unions are influential and commonly have strong ties to political parties, and collective bargaining is institutionalized and relatively centralized. Many observers have recently argued that such corporatist bargaining institutions are everywhere being undermined by changes in the global economy. The authors, using data from a wide variety of primary and secondary sources, test whether changes in patterns of wage-setting in the private sector are consistent with that claim. Although they find some signs that corporatist wage-setting institutions are in decline, they also find offsetting signs of the resiliency of such institutions. Overall, the evidence does not indicate that wage-setting in the private sector is undergoing a general process of decentralization in these eight countries.

Unions, Employers' Associations, and Wage-Setting Institutions in Northern and Central Europe, 1950-1992

The eight countries examined in this study--Austria, Belgium, Denmark, Finland, Germany, the Netherlands, Norway and Sweden--have long been viewed as exemplifying industrial relations systems, in which union coverage is high, unions are influential and commonly have strong ties to political parties, and collective bargaining is institutionalized and relatively centralized. Many observers have recently argued that such corporatist bargaining institutions are everywhere being undermined by changes in the global economy. The authors, using data from a wide variety of primary and secondary sources, test whether changes in patterns of wage-setting in the private sector are consistent with that claim. Although they find some signs that corporatist wage-setting institutions are in decline, they also find offsetting signs of the resiliency of such institutions. Overall, the evidence does not indicate that wage-setting in the private sector is undergoing a general process of decentralization in these eight countries.

Labor Markets, Production Strategies, and Wage Bargaining Institutions

Transformed patterns of labor market governance occupy a central place in the study of contemporary West European political economies. Here, detailed analysis of the dramatic decentralization of wage bargaining in Sweden identifies organized employers, especially engineering employers, as the decisive agents of institutional change. We argue that the employer offensive should be understood as a response to a shift in power within old wage-bargaining institutions, introducing invasive regulation of firm-level pay practices and, at the same time, as a consequence of new flexibility-centered production strategies, giving rise to demands for more firm-level autonomy in wage bargaining. The exceptional features of the old Swedish bargaining and the particular needs of different sectors come into play as we seek to explain the mixed pattern of wage-bargaining changes across Western Europe.

Inter-industry wage differentials in Finland: Evidence from longitudinal census data for 1975–85

This paper provides estimates of inter-industry wage differentials in the Finnish private sector using a new longitudinal data source. We find about 8 percentage point industry wage differentials, even after controlling for observable human capital and job characteristics, which explain over half of the raw wage differentials between industries. Controlling further for the unobservable ability using fixed effects methods we still find statistically significant industry wage differentials in the order of 2–3 percentage points. The industry wage differentials are persistent over the period studied. Finally, interindustry wage differentials are larger in Finland than in Sweden despite apparently similar centralized wage bargaining institutions.