Collective Bargaining Coverage Research Articles

The European Participation Index (EPI) and inequality: a multi-dimensional cross-national comparative measure of worker participation

Is worker participation becoming more prominent or less? Furthermore, what is the impact of worker participation on economic performance? This article introduces a tool designed by researchers at the ETUI to help answer these questions: the European Participation Index (EPI), a country-level summary measure of the strength of workers’ voice in companies. The EPI is based on (i) union density and collective bargaining coverage, (ii) workplace representation and (iii) board-level representation. This multi-level index provides an alternative to existing cross-national measures by taking into consideration two levels at which worker participation can take place: the workplace and the board. The article shows first that worker participation has become less prevalent in the EU over the past decade; and second that the EPI is robust and has superior explanatory power in relation to income inequality compared with traditional measures of collective bargaining.

Excluded but Fighting: Where Are the Voices of Sex Workers and Their Allies in EU Anti-Trafficking Policymaking?

The ‘end demand’ approach to prostitution has been popping up in Europe through the anti-trafficking debate and receives increasing attention on the international agenda. It is well recognized that improving workers’ rights, increasing unionization and collective bargaining coverage are effective strategies for tackling trafficking. However, with regard to sexual exploitation, focus is not on these strategies but instead on the abolition of the entire sex industry with the help of criminal justice systems. In first decade after the Palermo Protocol (2000), international organizations (IGOs) promoted a human rights-based approach to tackling trafficking, aiming to balance the criminal justice focus of the protocol. This work guided states on how to maintain and protect human rights while combating human trafficking. However, the explosive issue of sex work/prostitution was minimized, with IGOs avoiding the topic due to the fragile consensus about the definition of human trafficking and state obligations. Meanwhile, sex workers’ collectives and unions globally and throughout Europe developed their own strategies on how to address widespread criminalization, discrimination, violence and exploitation, with no or very limited funding and resources—and without recognition of their work, experience and expertise. This article presents how the European Sex Workers’ Rights Alliance (ESWA) and other sex workers’ rights civil society organizations have sought to challenge the harmful impacts of the ‘end demand’ discourse and the criminalization of sex work in the name of anti-trafficking in Europe.

Collective bargaining and power: Wage premium of collective agreements in Europe 2002–2018

AbstractThis article uses the European Structure of Earnings Survey to describe the evolution of collective bargaining coverage in European countries during 2002–2018 and how this affected the pay premium associated with being covered. Pay premia are an outcome of negotiations, reflecting the bargaining power on behalf of employees as well as the system of coverage, separately for the public and private sector. Descriptively, we show a decline in collective bargaining coverage linked to a general reduction in the pay differences. This hides much variation though. In a multivariate analysis of changes over time, we show that centrally bargained agreements are associated with larger pay premia if more people are covered and in countries and sectors with stronger trade unions. As this power declines over time, so do wage premia. At higher rates of coverage, there can be a spillover effect where wages for all workers increase, thereby reducing the premia.

Decent wage floors in Europe: Does the minimum wage directive get it right?

The Directive on Adequate Minimum Wages represents a watershed initiative adding substance to the EU’s social dimension. It contains two ambitious objectives: establishing the minimum level of statutory minimum wages at 60% of the gross median wage, and increasing collective bargaining coverage (CBC) to at least 80% of workers. In this article, we assess how statutory minimum wages and collective bargaining coverage are associated with the likelihood of low pay. Using a time series cross-section of EU-SILC for income years 2004–2019, we identify and assess the absolute and relative size of ‘effective wage floors’ for full-time employees in 30 countries. We specify multilevel, random effects within-between regression models to assess the individual and joint associations of SMW and collective bargaining coverage with wage floors. Our results indicate that SMWs and CBC both have distinct roles in establishing the effective wage floor. First, higher collective bargaining coverage is on average associated with a lower share of workers earning below 60% gross median wages. Second, higher SMWs are strongly associated with higher effective wage floors. Third, both collective bargaining coverage and union density are strongly associated with higher wage floors.

Round Table. Implementing the EU Directive on adequate minimum wages in southern Europe: the odd case of Italy

Southern European countries, with their apparently high degree of collective bargaining centralisation and state regulations, may seem to be little affected by the EU Directive on adequate minimum wages. This article looks at the case of Italy, the EU country generally reported to have the highest collective bargaining coverage in Europe, to show how the situation on the ground is more problematic than conventional indicators suggest. Not only does Italy lack a national minimum wage and a legal framework for collective bargaining extension, but its apparent high level of collective bargaining coverage is vulnerable to wage dumping practices. The article identifies the weaknesses of the Italian system and proposes some possible lines of reform.

Market-Engaging Institutions: The Rule of Law, Resilience and Responsiveness in an Era of Institutional Flux

This article analyses the institutional conditions required to support a strategic state in being responsive to the changing demands of a market-economy, whilst maintaining a credible commitment to long-term policy goals. This article identifies a key pillar of a market economy that we believe is crucial to promoting inclusive economic growth; we term these institutions market-engaging institutions. We propose that market-engaging institutions may form a bridge between the flexibility required by a dynamic market economy and the stability demanded by the rule of law. We define market-engaging institutions as those institutions that facilitate greater political participation for marginalized groups, manage technological disruptions, and support human capital formation. Examples include social partnership agreements, collective bargaining coverage, trade union membership, education and training services, and research and development programmes. We suggest that mobilizing these institutions necessitates credible commitment. Further, we argue that through its commitment to the non-arbitrary administration of general rules the rule of law is an essential condition for signalling the state’s credible commitment. However, at times the requirement for the state to be flexible to the changing needs of market actors may conflict with the rule of law’s demand for constancy and stability. This article examines the delicate balancing act required to sustain a strategic, responsive, and credible state in an era of institutional flux.

The Sword and the Shield: The Directive on Adequate Minimum Wages in the EU

Abstract This article contextualises the adoption of the Directive 2022/2041 (EU) on adequate minimum wages. The analysis considers wage adequacy, collective bargaining coverage, and the combat of in-work poverty as the main pillars on which the directive is built. The aim is to show the potential and limits of the directive’s approach to wage regulation, in the light of the stringent limits on EU competence deriving from EU treaties.

Addressing the Falling Labour Share in the UK and Beyond: Labour Law's Call to Arms

Economic studies jointly carried out by the ILO and the OECD, as well as the work of the economist Thomas Piketty has heightened public attention to the fact that the share of GDP in G20 (and other developed and developing) countries paid out as earned income has dropped since the early 1980s, with a corresponding increase in the share going to capital. To what extent can Labour Law contribute to the reversal of this decline in the labour share? Some commentators argue that reforms designed to strengthen trade unions and encourage broader collective bargaining coverage in the working population will lead to a correction. Others have recommended corporate governance reforms that prioritise more worker representational participation on the boards of corporations to promote the interests of labour. This paper will consider both of these suggestions, alongside others, and advance the proposition that inventive modes of regulatory thinking and new labour law solutions are required, which are tailored to the economic and social exigencies of the prevailing system of liberal meritocratic capitalist market exchange. The claim is that careful analysis of the current incarnation of capitalism (liberal meritocratic) can help us to identify the appropriate nature, scope and content of any labour law reforms that are motivated by a desire to resist the labour share decline. This paper will provide a preliminary basic sketch of how those adaptations of the rules of labour law should be configured.

Round Table. Mission impossible? How to increase collective bargaining coverage in Germany and the EU

Round Table. Mission impossible? How to increase collective bargaining coverage in Germany and the EU

Does collective bargaining reduce health inequalities between labour market insiders and outsiders?

AbstractCollective bargaining institutions are correlated with better population health. However, there are still major gaps in our understanding regarding the impact of collective bargaining on health inequalities, particularly between labour market ‘insiders’ and ‘outsiders’. In this study, we investigate the effect of collective bargaining coverage on individuals’ self-rated health, and whether the impact varies according to labour market status. We use four waves of the European Values Survey (1981–2018) and three-level nested random intercept models across 33 OECD and European countries (N = 66 301). We find that stronger and more inclusive collective bargaining institutions reduce health inequalities between the unemployed and the employed by disproportionately improving the health of the unemployed. This study implies that targeting the political institutions that shape the distribution of power and resources is important for reducing health inequalities.

The decline of paid overtime working in Britain

AbstractThe share of paid‐for overtime hours within total paid‐for hours worked in Britain has declined from 5.4% to 2.0% between 1997 and 2020. We investigate this decline, focussing on its distribution across full‐time (f/t) and part‐time males and females and across 19 one‐digit industries. It is established that f/t males are dominant in the decline both of overtime working and overtime hours. We explore the implications of the decline on the share of overtime pay within total pay as well as on the gender pay gap. We test for economic, structural and cyclical influences on overtime working via a two‐part regression model that allows us to differentiate between the incidence of overtime working and weekly overtime hours of overtime employees. We examine how paid‐for overtime has varied with collective bargaining coverage, low pay, the 2008 financial crisis, the arrival of Covid‐19, job mobility and the public/private sector dichotomy. Combined marginal effects of changes in the incidence of overtime working and weekly overtime hours are also provided. The influence of the decline of collective bargaining in the last two decades on overtime working is highlighted using Blinder–Oaxaca decompositions.

Job satisfaction and trade union membership in Germany

Using panel data from 1985 to 2019, we provide the first comprehensive investigation of the relationship between trade union membership and job satisfaction in Germany. Cross-sectional analyses reveal a negative correlation, while fixed effects estimates indicate an insignificant relationship. This is also true if we incorporate information on collective bargaining coverage or the existence of works councils in subsamples for which this data is available. To address the endogeneity of union membership, we generate information on the union density individuals faced in their industry and region. This time-variant IV suggests no causal impact of individual union membership on job satisfaction. Finally, using different estimation models, we investigate whether the effects vary by gender, age, birth year, and employment status.

Institutions, Labor Market Insecurity, and Well-Being in Europe

We examined the differences among seventeen European countries regarding the extent to which several key institutional and labor market characteristics affect the degrees of insecurity that people feel about their jobs and employment prospects, as well as their well-being (economic security and subjective well-being). We estimate how macrostructural factors affect well-being by fitting random-intercept multi-level models and decomposing the variance across national and individual levels, using data from the 2004 and 2010 European Social Surveys. We find that there is substantial country-level variation in labor market insecurity, economic security and subjective well-being. Active labor market policies, the generosity of unemployment benefits, and collective bargaining coverage explain a considerable portion of the identified differences among countries in labor market insecurity and well-being. The effects of employment protection legislation vary depending on whether the worker has a permanent or temporary contract. We did not find substantial differences between 2004 and 2010, suggesting that the effects of institutions and worker power on labor market insecurity and well-being reflect longer-term structural changes associated with the transformation of employment relations.

The wage impact of being a works council representative in Germany: A case of strategic discrimination?

AbstractWorks councils provide an essential mechanism for worker participation in decision‐making. While the literature has extensively explored their impact on worker and establishment outcomes, the negotiation process between works council representatives and their employer has remained largely unexplored. This article contributes to filling this gap by investigating wage discrimination towards works councilors in Germany. Fixed effects models leveraging panel data show that councilors receive a wage premium that positively correlates with the sectoral coverage of collective bargaining. In the manufacturing sector, where the tradition of bargaining is heavily entrenched, employers positively discriminate councilors. In contrast, in the service sector, where the culture of bargaining is weak, employers penalize works councilors. In both sectors, partisan and unionized works councilors are the most affected. The most likely hypothesis to explain these results is that employers strategically discriminate these councilors in order to bypass the traditional constraints of establishment‐level participation. This article therefore questions the quality of industrial democracy in Germany.

Membership in employers’ associations and collective bargaining coverage in Germany

While there is a strong overlap between membership in employers’ associations and collective bargaining coverage, the overlap is far from being perfect. Using unique firm-level data from Germany, this study estimates the determinants of the membership in employers’ associations and the coverage by industry-level or firm-level agreements. The analysis particularly focuses on the various constellations of membership and collective bargaining status. The results show that firm-level worker representation, foreign ownership, work organization, firm size, age and East–West differences are important determinants. Altogether, the analysis demonstrates that a more differentiated picture of industrial relations can be obtained by considering both membership in employers’ associations and collective bargaining coverage.

Membership in Employers' Associations and Collective Bargaining Coverage in Germany

Membership in Employers' Associations and Collective Bargaining Coverage in Germany

Legislation to support organising: could this renew the trade union movement?

Legislation to support organising:could this renew the trade union movement? Gareth Murphy (bio) Unions are increasingly seeking institutional support as a tactic in their renewal efforts and a means of levelling the playing field for unions and workers in the context of the often-increasing power and ability of employers to avoid unions. Research suggests that institutional support from a State can positively help unions rebuild membership and increase density across the economy. Organising approaches can work best where institutional support is also present (Ibsen and Tapia, 2017). Likewise, where institutional supports are weakened this corresponds to reduced union density (Eurofound, 2010). Two, positive examples in particular stand out. One, is the 'Ghent' system of welfare payment linked to trade union membership and, two, is the right for union organisers to access workplaces and workers who are not represented by trade unions at their workplace. FSU Ireland is developing this latter demand and calling for workers 'right to join' as part of a suite of institutional reforms to support workers unionising, protect activists and negotiate with their employer especially in newer non-union parts of the economy. In the US, the Biden administration is attempting to progress with an important piece of 'right to organise' legislation the PRO (Protecting the Right to Organise) Act responding to increasing and high-profile employer, and State, opposition to union organising which this journal has previously covered. 'The 'Ghent system' originated in Ghent, Belgium, whereby the States social welfare payments for unemployment benefit are directed through trade unions as opposed to a government agency. This provides workers a significant incentive to join their union and has helped maintain relatively high union density, 52 percent, levels in Belgium and other countries with it (Vandaele, 2019). Although it has been noted that the weakening of this system in recent times has negatively affected union members1. A paper by Jens Lind in 2004 specifically notes the high union density rates in Denmark, Finland and Sweden are due to the Ghent system (Lind, 2004). This paper also quotes a 1992 survey in Denmark of why you are a union member and the most popular answer was to be a member of the unemployment benefit fund. The paper warns that reforms of the model will weaken the incentive to join and union density. Baccarro and colleagues in 2003 note a word of caution and that is that unions embedded most in the State with strong institutional supports have been slower to turn to 'organising' and this may weaken grassroots organisation. It is a reasonable concern that relying too heavily on state support can hollow out a union and leave it weakened and vulnerable to removal of those supports at a later point. And so, any sectoral bargaining model that does not provide for the right to join, organise and be recognised in workplaces should be considered very carefully for potentially negative long-term consequences. More recently in Iceland, and contrary to trends in weakening this model, the Government has introduced the 'Ghent system' and this has had a very positive affect on union members. Iceland's union membership has grown by close to 11 percent between 2010 and 2017 and a union density of 88 percent of the workforce and collective bargaining coverage of over 90 percent (Vandaele, 2019). Ireland has 'voluntarist' industrial relations, with no statutory recognition or collective bargaining laws at an enterprise level. There are some sectoral arrangements, but they have been weakened over decades A different form of institutional support is evident from the 2000's on in New Zealand where a new Employment Relations Act (and amendments in 2004) provide union organisers with the right of access to talk to and encourage non-member to join the union in workplaces where the union was not recognised. It has been noted that these changes, amongst other things, brought New Zealand union membership back from the brink of collapse and has contributed to a steady climb in membership, which has stagnated in more recent times (Gall, 2009). Membership grew each year up to 2006 with a total growth of 25 percent or 70,000 net increase. This change follows an earlier policy reform in...

Collective bargaining levels, employment and wage inequality in Spain

After the increase in inequalities following the Great Recession, studies on wage bargaining systems have increasingly focused on wage inequality. This research examines wage inequality associated with collective bargaining levels in Spain, based on matched employer–employee microdata and quantile regression methods. These methods are applied across the wage distribution, following the method proposed by Firpo et al. (2011), to estimate wage premiums associated with agreement levels and to decompose the wage differentials observed at different points of the wage distribution. From the evidence obtained it can be concluded that, although the higher wages found in firm-level agreements are explained by the better observed characteristics of firms and workers covered by these collective agreements, there remains a positive wage premium. Although this premium is seen throughout the wage distribution, it favours mostly workers in the middle and upper-middle end. This slightly increases wage inequality in comparison with sectoral agreements. In contrast, workers without collective bargaining coverage generally suffer a wage penalty. This penalty is only observed on the left of the wage distribution. It becomes a significant wage premium in the upper end of the distribution, which implies a significant increase in wage inequality. In short, the evidence of this research suggests that reducing the coverage of collective bargaining could be associated with a significant increase in wage inequality. A better policy option for countries with a predominant sectoral model, such as Spain, would be to move towards an organized decentralization model. This would cause significant gains in employment as suggested by OECD (2019) and only a slight increase in wage inequality.

Union membership and the willingness to prioritize environmental protection above growth and jobs: A multi‐level analysis covering 22 European countries

AbstractThis article contributes to debates about trade unions and the environment by studying differences between union members and non‐members when asked to prioritize between environmental protection and jobs and economic growth. Differences are explored in a multi‐level framework based on European Values Study data from 2017, covering 22 European countries. The empirical results show that members are more pro‐environmentally inclined than non‐members. This is demonstrated to be attributable to a large extent to the fact that members tend to be more left‐leaning politically, a disposition which tends to be associated positively with environmental concern. While those employed in transport and manufacturing generally are least likely to be willing to prioritize environmental protection, membership has the most pronounced positive effect in this group. The tendency for members to be more pro‐environmentally inclined is consistent across the studied countries. The article also shows that both members and non‐members in countries with higher collective bargaining coverage tend to be more pro‐environmentally inclined. Implications of the findings are discussed in terms of the political nature of collective interest representation with which unions are concerned, broader debates about union renewal and the importance of unions in garnering workers’ support for a greener economy.

Care earnings in the United States and 24 European countries: The role of social policy and labour market institutions

AbstractCare occupations are gendered and remain relatively poorly paid, particularly in the United States. Prior research on the ‘care penalty’ primarily points to individual, relational, and market‐valuation factors in explaining the relative earnings of care workers. This study integrates these explanations with a comparative institutional perspective. Using higher‐quality data and methods than previous comparative research in the field—that is, harmonized micro‐data from the Current Population Survey and EU‐SILC from 2005 to 2016, country and year fixed effects models, and a counterfactual analysis—we find that national variance in labour market and welfare state institutions explains most of the difference in the relative earnings of reproductive care workers between the United States and European countries. Higher rates of collective bargaining coverage, stronger employment protection and welfare state spending contribute to higher relative earnings for reproductive care occupations, and lower relative earnings for high‐status nurturant care occupations. Differences in the relative earnings of care workers appear to be mostly a construct of social policy and labour market institutions rather than individual, relational, and market‐valuation factors.