Bargaining Structure Research Articles

Efficiency and equity in negotiated resource transfers: Contributions and limitations of trust with limited contracts

We consider a case of water reallocation in Brazil, one which has numerous analogs elsewhere. To permit empirical study of the effects of institutions that can facilitate or restrict allocations, we conducted field experiments to explore trust's potential when resource contracts are limited, using a novel asymmetric-productivity ultimatum game with a final surplus-sharing step added. As a form of informal institution, trust could in principle make rights and contracts unnecessary. We observe whether trust in compensation is in fact expected and expressed. We also explore whether trust is exploited, and the effect of communication, within our two bargaining structures: (1) no communication; and (2) with a non-binding message concerning the surplus to be shared. We see that our participants both expect and express trust that some of the surplus will be shared. Trust raises total output and some surplus is indeed shared: those who trust gain a bit on average; and the more trust was shown, the more was shared. However, often the trust was barely repaid. Further, the messages—found to help in other research—had little impact and were often untrue. In sum, trust does matter but both efficiency and equity could well rise with complete contracts.

The Regional Dimension of Collective Wage Bargaining: The Case of Belgium

Rusinek M. and Tojerow I. The regional dimension of collective wage bargaining: the case of Belgium, Regional Studies. The potential failure of national industry agreements to take into account productivity levels in the least productive regions has been considered as one of the causes of regional unemployment in European countries. This paper investigates the role of the collective bargaining structure in the relationship between regional wage and productivity differentials. Using a rich Belgian-linked employer–employee dataset, it is found that the more an industry is decentralized in terms of wage setting, the more regional differences in productivity are reflected in wages. It is concluded that the current Belgian wage-setting system already includes mechanisms that allow regional productivity to be taken into account.

Between Fragmentation and Centralization: South Korean Industrial Relations in Transition

This study investigates profound changes in South Korean industrial relations after the Asian financial crisis of 1997. Korea's neoliberal labour reforms have produced a large number of non-standard workers, deepening the union representation gap. Realizing that the fragmented enterprise unions could not adequately protect workers from this degradation of labour, trade union leaders began a major organizational drive at the industry level and tried to institutionalize sectoral bargaining. A political space for union centralization was partially opened because the state needed labour's co-operation to implement neoliberal reform packages. However, disorganized centralization in Korea, where important decisions on wages and working conditions have been negotiated mainly at the company level, has faced limitations in achieving meaningful changes in the dualistic structure of the labour market. This study concludes with a review of changes in Korea's labour law in 2010 and a discussion on the effects of the law on bargaining rights of non-standard workers and the incipient industry-level bargaining. This trend towards union centralization may continue, but the notable gap between the formal bargaining structure and actual practice is expected to widen.

Practitioner Review: Continuity and Change: The Fair Work Act in Aviation

This article begins by discussing the specific industrial relations challenges of the highly competitive aviation industry. It then reflects on the outcome of the recent intense national debate over industrial relations, exploring the consequences of that debate for practice and policy, and discusses some key issues that remain in play. Although the Fair Work Act 2009 may have come about as a reaction to what many perceive as the ‘excesses’ of Work Choices, the new Act does not so much ‘wind back the clock’ as represent a significant new development in Australia’s long and unique industrial relations history. This article will discuss the impact of the changes, to date, made by the Fair Work Act on one organization, including the expansion of the ‘safety net’, and how the new compromise between the role of the ‘collective’ and the role of the ‘individual’ struck by the Act has the potential to fundamentally change the nature and structure of bargaining. We offer these comments as practitioners who have worked under successive industrial relations regimes since the early 1980s.

HISTORICAL PERSPECTIVE AND TRANS-TASMAN CURRENTS IN INDUSTRIAL RELATION

I have attended twenty AIRAANZ conferences, including the first in 1983. This is the fourth AIRAANZ conference that I have attended in New Zealand (of six possible), the third in Auckland, and the second as a New Zealand resident. The first was the third AIRAANZ conference in 1987 at Palmerston North at Massey University, as an Australian visitor. I well remember the events described in Cathy Brigden's presidential address, where I was subjected to a mock 'trial' for questioning 'whether IR academics could contribute significant value to the writing of labour history' (Brigden 2009: 228). I was found guilty of bringing Industrial Relations (IR) into disrepute, but I hasten to say that my comments were not intended to question the abilities of IR academics per se, but to question a particularly narrow systems approach that attempted to reduce labour history to a process involving the development of collective bargaining structures (Markey 1987). Whilst I did not have much public support at the conference, subsequently a number of labour historians privately expressed their support for my argument, including the late Bert Roth, a pioneer New Zealand labour historian.

Review Essay: Collective Bargaining for the 21st Century

Collective bargaining has served as a cornerstone institution for democracy, a mechanism for increasing workers’ incomes, improving working conditions and reducing inequality, a means for ensuring fair employment relations and a source of workplace innovation. However, the number of workers belonging to trade unions has declined in many countries and global economic integration has tipped bargaining power in favour of employers. This paper reviews recent trends and developments in respect of collective bargaining. It examines the evolution of collective bargaining institutions in different regions of the world. It highlights the manner in which collective bargaining structures have adapted to competitive pressures and the increasing coordination of bargaining practices both within and across borders. In a survey of collective bargaining agendas, the authors note the increasing diversity of issues on the bargaining agenda. They highlight particularly innovative practices in respect of the application of collective agreements to non-standard workers and the role that collective bargaining played in mitigating the effects of the recent economic crisis on workers and enterprises. They argue that the support of public policy is essential to promote and sustain collective bargaining. These developments and the ongoing challenges facing collective bargaining present a number of issues for future research.

The determination of wages of newly hired employees: survey evidence on internal versus external factors

This paper uses information from a rich firm-level survey on wage and price-setting procedures, in around 15,000 firms in 15 European Union countries, to investigate the relative importance of internal versus external factors in the setting of wages of newly hired workers. The evidence suggests that external labour market conditions are less important than internal pay structures in determining hiring pay, with internal pay structures binding even more often when there is labour market slack. When explaining their choice firms allude to fairness considerations and the need to prevent a potential negative impact on effort. Despite the lower importance of external factors in all countries there is significant cross-country variation in this respect. Cross-country differences are found to depend on institutional factors (bargaining structures); countries in which collective agreements are more prevalent and collective agreement coverage is higher report to a greater extent internal pay structures as the main determinant of hiring pay. Within-country differences are found to depend on firm and workforce characteristics; there is a strong association between the use of external factors in hiring pay, on the one hand, and skills (positive) and tenure (negative) on the other.

The Structure of Collective Bargaining and Worker Representation: Change and Persistence in the German Model

This paper depicts and examines the decline in collective bargaining coverage in Germany. Using repeat cross-section and longitudinal data from the IAB Establishment Panel, we show the overwhelming importance of behavioral as opposed to compositional change and, for the first time, document workplace transitions into and out of collective agreements via survival analysis. We provide estimates of the median duration of coverage, and report that the factors generating entry and exit are distinct and symmetric.

Optimal negotiated transfer pricing and its implications for international transfer pricing of intangibles

Intangibles exhibit zero marginal licensing cost, including cross-border intra-firm licensing of intangibles within a multinational corporation (MNC). An MNC may not realise the full profit potential of licensing intangibles intra-firm, however, under suboptimal negotiated transfer pricing schemes. Our negotiated transfer pricing bargaining structure unlocks this potential by producing an optimal transfer price and larger optimal intra-firm licensed quantity. Increased licensing of intangibles intra-firm across borders produces a greater potential tax savings/consolidated after-tax profit gain per unit of transfer price adjustment, creating a context where MNCs feel a greater imperative or incentive to move beyond legal tax avoidance toward evasion.

Nota sobre algunos aspectos conflictivos de la representación y negociación colectiva en las Universidades Públicas

El presente trabajo aborda las reglas, y las carencias que presenta, la estructura del sistema de negociación colectiva en las Universidades públicas, aunque más allá de ello intenta poner de relieve la complejidad del sistema de empleo público universitario para que éste pueda ser calificado de eficiente y pueda, inclusive, responder a la propia estructura normativa establecida, ya que los procesos de interacción entre los actores estratégicos que concurren en el sistema y que son determinantes para el éxito de las políticas públicas universitarias a implementar en los próximos años no pueden ser calificados cómo los más idóneos.

Chairs as policy entrepreneurs in multilateral negotiations

AbstractChairs have a significant potential effect on the bargaining structure and conduct of multilateral negotiations, addressing collective action problems that arise in decentralised bargaining. We examine the role of the Chair as a policy entrepreneur in multilateral negotiations, identifying the parameters that increase the Chair's entrepreneurship potential and condition the outcome of the Chair's entrepreneurial activities. We cluster the identified parameters in three groups of organisational attributes, comprising the Chair'smandate, availableresourcesand (formal)constraints, in particular decision-making rules. We use this typology to analyse four important case studies within the UN setting.

Effects of family planning and health services on women’s welfare: evidence on dowries and intra-household bargaining in Bangladesh

This paper demonstrates how the availability of family planning and maternal and child health services alters the structure of intra-household bargaining. The overall welfare gains from such programs are likely to be large, but when women obtain access to services only through marriage, some of these gains may be partially offset by changes in their bargaining power and in the dowries that they pay their husbands. I examine these marriage market effects using a family planning and health services program in rural Bangladesh, finding that compared to women without program access, women in the treatment area are 35% less likely to be able to make purchases without permission from their husbands or another household member. Moreover, a difference-in-difference specification confirms that women pay 14% higher dowries in order to obtain husbands with access to the program. The fact that adjustments are made both before and within marriage suggests that marital contracts in rural Bangladesh are negotiated along multiple margins.

Measuring Union Bargaining Power in the Estonian Public Sector

This paper analyzes the impact of trade unions on remuneration in the Estonian public sector. In this paper, union bargaining power is investigated separately in healthcare, education and culture and the public service using a case study approach. The method elaborated by the author uses documentation from branch level negotiations in the period 2001–2005. The analysis reveals that unions do have an impact on remuneration in the Estonian public sector. The influence is greater in healthcare, less in education and culture, and ambiguous in the public service where social dialogue does not really work. The most important factors of union influence turn out to be the political and legal environment (the right to strike), funding schemes and the bargaining structure (the existence and stability of an employers’ union, the number of wage levels bargained, the clarity with which parties represent their positions).

The Determination of Wages of Newly Hired Employees: Survey Evidence on Internal versus External Factors

This paper uses information from a rich firm-level survey on wage and price-setting procedures, in around 15,000 firms in 15 European Union countries, to investigate the relative importance of internal versus external factors in the setting of wages of newly hired workers. The evidence suggests that external labour market conditions are less important than internal pay structures in determining hiring pay, with internal pay structures binding even more often when there is labour market slack. When explaining their choice firms allude to fairness considerations and the need to prevent a potential negative impact on effort. Despite the lower importance of external factors in all countries there is significant cross-country variation in this respect. Cross-country differences are found to depend on institutional factors (bargaining structures); countries in which collective agreements are more prevalent and collective agreement coverage is higher report to a greater extent internal pay structures as the main determinant of hiring pay. Within-country differences are found to depend on firm and workforce characteristics; there is a strong association between the use of external factors in hiring pay, on the one hand, and skills (positive) and tenure (negative) on the other.

Collective Bargaining, Macroeconomic Performance, and the Sectoral Composition of Trade Unions

Strong exposed‐sector unions and weak public‐sector unions are seen as having beneficial effects on macroeconomic performance. Although these effects must work through the bargaining structure, the interaction with union composition is unclarified. This paper argues that the interaction effect qualitatively differs with the bargaining type. The findings show that the performance of pattern bargaining significantly increases with growing exposed‐sector union strength whereas uncoordinated bargaining and centrally coordinated bargaining do not interact with union composition.

Pay and Working Conditions in Finance and Utility Call Centres in Denmark and Germany

This study analyses how national institutions, sectoral bargaining structures and union strategies affect working conditions and pay by comparing call centres in two liberalized service sectors: financial services and utilities. We find more segmentation and expansion of low wage work in Germany and more cooperation on high-involvement practices at workplace level in Denmark. However, outcomes are not uniform; we find differences between sectors in the use of subcontracting and union power at the workplace-level. Poor economic performance, segmentation-oriented employer strategies, declining bargaining coverage and weakened unions in Germany have undermined formal constraints on employers, whereas better outcomes in Denmark are due to a pronounced stability of the regulative and normative institutional framework. However, the Danish model is also being weakened from the margins.

Institutional Change and the Restructuring of Service Work in the French and German Telecommunications Industries

This study analyses recent changes in collective bargaining institutions and their implications for employer strategies in the French and German telecommunications industries, drawing on case studies and survey data from call centre workplaces. Findings demonstrate that differences in both formal institutions and past logics of action influenced actor responses to changing markets and ownership structures. French trade unions were more successful in establishing encompassing bargaining structures and reducing pressures for pay differentiation, due to state support for the mandatory extension of agreements and unions’ strategic focus on centralizing bargaining. In contrast, bargaining in Germany has become increasingly fragmented and decentralized as unions and works councils focused on company-level bargaining at major employers. This focus allowed worker representatives to preserve their strong influence over employment practices in core workplaces but has contributed to declining bargaining coverage and growing wage inequality.

Still a Coordinated Model? Market Liberalization and the Transformation of Employment Relations in the German Telecommunications Industry

This paper examines recent changes in collective bargaining and employer strategies in the German telecommunications industry following market liberalization in the late 1990s. Germany's distinctive co-determination and vocational training institutions encouraged large firms to adopt employment systems in technician and call center workplaces that relied on high levels of worker skill and discretion. However, organizational restructuring is undermining these gains, as firms use outsourcing and the creation of subsidiaries to escape or weaken company-level collective agreements. These trends have substantially weakened unions and contributed to the further disorganization of coordinated bargaining structures. Findings are based on interviews with union and works council representatives, managers, and employees at Deutsche Telekom and its major competitors conducted between 2003 and 2007, as well as secondary analysis of company documents and industry reports.

R&D INVESTMENTS AND SEQUENTIAL WAGE NEGOTIATIONS*

This paper analyses how the structure of wage bargaining affects R&D investment by firms that increases the productivity of labour in a Cournot duopoly. We find that total expenditure on R&D is greater when wages are set simultaneously than when they are set sequentially. Thus sequential wage negotiations reduce the incentive for firms to innovate and affect the productivity of labour. When wage negotiations are sequential the productivity of labour is greater (lower) in the follower (leader) firm than when negotiations are simultaneous. We also obtain that for same parameter values it is possible for the firm with the lower productivity to end up paying a higher wage than the firm with the higher level of labour productivity.

Jurisdictional Contests over the Regulation of Work: Evidence from the NSW Oil Refining Sectors, 1976—80

This article illustrates how a contest within the Australian Workers Union over the issues of workplace autonomy and bargaining structure came to develop a particularly intractable and entrenched character as a consequence of the coexistence of state and federal industrial regulation. It argues that as the dispute played out informal coalitions developed between different fractions of organized labour, capital and the state, which hardened the positions of all parties involved in the dispute. Both federal and state tribunals acted in a manner they saw as consistent with their role of maintaining public interests, but their behaviour in fulfilling this role saw them come into direct conflict.