Collective Bargaining Regime Research Articles

Charting a New Course in a Fissured Economy? Employer Concepts and Collective Bargaining in the US and Canada

The legal concept of the employer plays an increasingly important and contested role in the modern economic context of broad-sweeping organizational fissuring. This article focuses on the role of employer concepts specifically in the collective bargaining domain, where they hold the unique potential to substantially affect access to regulated collective bargaining, its efficacy, and the extent of worker bargaining power. Building on a critical engagement with previous normative literature on fissuring and on the concept of the employer, the paper examines the interaction of fissuring and employer concepts in the context of the US and Canadian ‘Wagnerist’ collective bargaining regimes, and compares the trajectory of employer concept doctrine in each of these two countries in recent decades. The comparative analysis suggests that while employer concept reform within collective bargaining regimes remains constrained in important respects in both the US and Canada, these concepts have also recently diverged in important formal respects shaping their effects in fissured contexts. This divergence is comprised of a formal expansion of their scope in Canada; a narrowing of their scope in the US; and an effective inversion of the US joint employer concept consequentially into less of a remedial, and a more restrictive device. As a heuristic, comparison of US developments with those in its neighbour’s regime that has much else in common, help to highlight the extraordinarily restrictive nature of most recent US doctrine, including the 2020 National Labor Relations Board (NLRB) final rule on joint employer status, its facilitation of fissuring, and the formidable task confronting US labour of somehow bringing lead firms into the regulated collective bargaining process. Employer Concept, Fissuring and Collective Bargaining, Joint Employer, Scope of Collective Bargaining Regime

Introduction to a Special Issue on the New Labor Federalism

The articles in this volume grew out of a 2018 conference organized by the Rutgers School of Management and Labor Relations and Cornell University’s ILR School to address questions regarding labor regulation at lower levels of government. During the extended period that federal reform has been blocked, enormous activity has taken place at the state and local levels in terms of both the passage of new employment laws and regulations as well as their administration and enforcement. Drawn from the larger set of papers presented at that conference, these articles focus on specific dimensions of the puzzle. This introduction paints the broader picture suggested by the conference and papers taken as a whole. The move toward federalism as a strategy, particularly as an alternative to organizing through the NLRA, while promising, is so far limited because it focuses on the substance of labor regulation exclusively, in isolation from the procedures through which work regulation is promulgated and enforced. The most likely place to look for reforms that will give the new labor federalism institutional support and stability comparable to that of the New Deal collective bargaining regime at its apogee is in their implementation and enforcement.

State and Local Policies and Sectoral Labor Standards: From Individual Rights to Collective Power

The US enterprise-based collective bargaining regime creates substantial limitations for organizing workers in an economy in which supply chains are increasingly disaggregated in ways that reduce worker power. Federal labor law generally preempts state and local policies that directly address private-sector bargaining. State and local governments, however, are not preempted from setting general labor standards. The authors examine four cases of recent experiments using sectoral standards at the local level. The cases show that sectoral standards have the potential to expand new forms of social bargaining through state and local public policy in areas of the country where worker organizations are already strong. Sectoral standards can do so in ways that promote worker organization and build institutional power, especially when combined with robust worker organizing. In presenting these cases, the authors show both the potential power, and limitations, of federalism in US workplace regulation.

Social partners’ bargaining strategies in Germany and Spain after the introduction of the Euro: A morphogenetic perspective on corporate agency

This article addresses how far wage imbalances in the Eurozone can be imputable to intentional agency by collective bargaining organizations. Using Archer’s morphogenetic approach, we explain the agentic role of social partners in core (Germany) and periphery (Spain) cases, in relation with the respective collective bargaining regimes. We show that the capacity of macro- and meso-level organizations to effect wage-setting practices can be constrained inadvertently by contextual influences with morphostatic properties, generating constrained modes of corporate agency. Yet wage moderation is best understood as a form of agency itself, functioning ‘by being’ rather than ‘doing’, which over time can become more innovative. We contrast this finding with the less constrained capacity of more institutionalized corporate agents, such as transnational business corporations and central state agencies.

Employment Protection Reform in European Labor Markets: The Collective Bargaining Regime Matters

Policy advisers repeatedly call on Western European countries to reform their employment protection legislation (EPL) by switching to a layoff tax model of unemployment insurance (UI) funding. This new design, partly based on the existing “experience-rating” (ER) system in the U.S., should induce firms to internalize layoff fiscal costs and hence reduce unemployment. However, its success remains uncertain in economies with a collective wage-setting system, as do those of many Western European countries. Using a matching model with endogenous job destruction, we provide an ex-ante evaluation of this policy reform’s effects on labor market outcomes and aggregate welfare in firm-level and sector-level bargaining economies. Our numerical analyses yield two main results. First, compared to simply increasing firing/dismissal costs, implementing an ER system improves labor market outcomes in both types of economies. Second, the design of the reform has to be adapted to the level of wage bargaining in the economy. Because firms can adjust most of the terms and conditions of employment (including wages) in decentralized negotiations, adding ER to existing EPL yields the largest reduction in unemployment under firm-level bargaining, while with sector-level bargaining, ER is better implemented with a relaxation of existing EPL. However, if the aim is to increase aggregate welfare, it is better under both bargaining regimes to relax existing EPL when implementing ER.

Dissecting Between‐Plant and Within‐Plant Wage Dispersion: Evidence from Germany

Using rich linked employer–employee data for (West) Germany between 1996 and 2014, we conduct a decomposition analysis based on recentered influence function (RIF) regressions to analyze the relative contributions of various plant and worker characteristics to the rise in German wage dispersion. Moreover, we separately investigate the sources of between‐plant and within‐plant wage dispersion. We find that industry effects and the collective bargaining regime contribute the most to rising wage inequality. In the case of collective bargaining, both the decline in collective bargaining coverage and the increase in wage dispersion among the group of covered plants have played important roles.

Wage Differentials by Bargaining Regime in Spain (2002-2014): An Analysis Using Matched Employer-Employee Data

This research examines wage differentials associated to different collective bargaining regimes in Spain and their evolution over time based on matched employer-employee microdata. The primary objective is to analyse the wage differentials associated to the presence of a firm-level agreement and how they have evolved, taking into account the changes in the economic cycle and the recent labour reform of 2012. The second objective of the study is to examine the impact on wages of an absence of a collective agreement. This regime has become more prevalent due to the regulatory changes associated to the labour reform. From the evidence obtained it may be concluded that, although the higher wages observed in company-level agreements are systematically explained by the better characteristics of firms with labour agreements, there is a positive wage premium that favours workers mostly in the middle and upper-middle end of the wage distribution. This premium has remained relatively stable over time and does not seem to have been affected by the reform, although a degree of cyclical evolution cannot be ruled out. With respect to the impact on wages of the absence of a collective agreement, the results suggest that this level of bargaining, which is still fairly scarce, despite displaying an increasing trend, is associated, on average, to comparatively low wages, and, consequently, to higher wage flexibility. The principal explanatory cause for this wage differential is the existence of a negative wage premium for workers of firms covered by sectoral agreements, particularly those at the lower end of the distribution.

Wage Differentials by Bargaining Regime in Spain (2002–2014). An Analysis Using Matched Employer-Employee Data

This research examines wage differentials associated to different collective bargaining regimes in Spain and their evolution over time based on matched employer-employee microdata. The primary objective is to analyse the wage differentials associated to the presence of a firm-level agreement and how they have evolved, taking into account the changes in the economic cycle and the recent labour reform of 2012. The second objective of the study is to examine the impact on wages of an absence of a collective agreement. This regime has become more prevalent due to the regulatory changes associated to the labour reform. From the evidence obtained it may be concluded that, although the higher wages observed in company-level agreements are systematically explained by the better characteristics of firms with labour agreements, there is a positive wage premium that favours workers mostly in the middle and upper-middle end of the wage distribution. This premium has remained relatively stable over time and does not seem to have been affected by the reform, although a degree of cyclical evolution cannot be ruled out. With respect to the impact on wages of the absence of a collective agreement, the results suggest that this level of bargaining, which is still fairly scarce, despite displaying an increasing trend, is associated, on average, to comparatively low wages, and, consequently, to higher wage flexibility. The principal explanatory cause for this wage differential is the existence of a negative wage premium for workers of firms covered by sectoral agreements, particularly those at the lower end of the distribution.

International Financial Institutions and Labour Rights: Rhetoric versus Reality

6 | International Union Rights | 24/1 FOCUS | WORLD BANK AND IMF International Financial Institutions and Labour Rights: Rhetoric versus Reality Labour organisations have long been critical of the International Monetary Fund (IMF) and World Bank. In particular, groups argue that policy prescriptions attached to international financial institution (IFI) loans, which emphasise labour flexibility, wage cuts, and reduced public sector jobs, amount to ‘cookiecutter policies that harm the interests of working people’ (Lloyd and Weissman 2007: 7). Politically, these policies are seen as undercutting the power of labour groups, decreasing both their ability to protect members as well as their relative political power. A large body of academic scholarship has studied the ways in which IFI programmes affect recipient countries. While earlier studies primarily focused on macroeconomic implications, more recent systematic research has also begun to examine the socio-political impacts. Thus far, results have been decidedly negative. For instance, Abouharb and Cingranelli (2007) found that structural adjustment programmes (SAPs) are significantly related to political repression– the programmes created a pernicious dynamic in which loan conditions encouraged anti-government protests that were often violently repressed. Subsequent work has found these programmes to be negatively associated with women’s economic rights, particularly freedoms from work and pay discrimination as well as workplace harassment (Detraz and Peksen, 2015). There is some evidence, however, that these programmes may ultimately serve to support some democratic reforms (Abouharb and Cingranelli 2007; Birchler et al. 2016). Somewhat surprisingly, less attention has been devoted to the labour rights implications of IFI policies. For its part, until recently the IMF has overlooked the possible effects of their programmes on labour conditions. In a welcome break, a recent IMF report (Jaumotte and Buitron 2015) noted the importance of a strong collective bargaining regime to reduce income inequality and secure better wages for low and middle-income earners. The report specifically finds that ‘the decline in unionisation appears to be a key contributor to the rise of top income shares’ (p. 31) to the detriment of those in other groups. Given the dearth of IMF research in the area of labour rights, the significance of this release was noted by labour scholars. For example, Manborde (2015: 7) observed in an earlier edition of this journal that the report finally attested to the importance of trade unions as necessary ‘economic and political correctives’ in the ‘kind of free market economy created by the mainstream political parties’. Somewhat sardonically, Cross (2015: 10) welcomed the IMF’s ‘foray into the realm of union rights’, though noting that it ultimately did little beyond refuting ‘some of the lazier assumptions on the effects of stronger trade unions’. Paucity of labour research aside, the IMF and World Bank have long noted the potential social and economic harm that their policies can cause, and have at the least expressed rhetorical support for labour rights. For example, over twenty years ago then IMF Director Michel Camdessus (1996) noted that IMF programmes should ‘contribute to improving human living standards’, States should take measures to assist with the ‘human costs of adjustment’ and labour organisations can play a key role in helping countries deal with the possible adverse impact of globalisation. Subsequent efforts on the part of these institutions have gone somewhat beyond rhetoric. By the late 1990s, the IMF began to incorporate promises to improve labour rights, specifically compliance with ILO core labour standards, into its loan conditions (Anner and Carraway 2010). One scholar argued that both IFIs have helped to increase the influence of the ILO and that ‘contrary to widespread opinion, the IMF and World Bank have become quasi-partners (with the ILO) in promoting labour rights’ (Stallings 2010: 13). For example, representatives from each organisation make it a practice to attend the others’ meetings and the World Bank’s procurement standards for contractors include core labour standards (Stallings 2010). At the least, this marks an encouraging break from their traditional view that, famously noted by former World Bank President James Wolfensohn (Lloyd and Weissman 2001, 11), that such organisations do ‘not get involved in national politics’. Thus while it has long been argued that IFI policies bode poorly for labour rights, there is some evidence that these...

The wage curve before and during the Greek economic crisis

Using cross-sectional data from the Labour Force Survey, we investigate whether a wage curve, i.e. a negative relationship between real wages and regional unemployment, could be estimated in the Greek labour market and in the period 1999–2014. Adopting individual static and regional dynamic specifications, our results do not support the existence of such a relationship despite the extensive macroeconomic adjustment of real wages after 2009. However, allowing for period-specific heterogeneous slopes, we find that a negative relationship between wages and regional unemployment emerged in the period 2010Q2–2011Q4 which however was short-lived. This relationship appears to be exclusively due to the restructuring of the collective bargaining regime and the reduction in the national minimum wages, both of which were implemented in the private sector.

A nightmare on the brain of the living?: The endurance and limits of the collective bargaining regime

Despite pressures to liberalise its economy and strong resistance to union bargaining rights from domestic constituencies, South Africa has maintained, for more than two decades, a labour relations regime which offers trade unions and workers generous rights. The article seeks to explain the bargaining system’s survival in seemingly unlikely circumstances. It argues that racial politics combined with the emergence of a trade union movement relatively independent of its nationalist ally have made the political costs of denying or retreating from a generous set of union rights prohibitive. But, while the implicit bargain may enable unions to negotiate wages and working conditions, this does not automatically mean gains for workers or the poor, for the bargaining system has proved incapable of fully resolving the conflict caused by a path dependence which ensures the persistence of racial domination in the economy.

Escherian Reflections on the Charter and Human Rights in Canada

This paper addresses how the body of Canadian human rights law has influenced and is influenced by Charter jurisprudence. It notes the Escherian dialectic between human rights and Charter discourse and some of the problems in developing a coherent Charter/human rights regime in relation to labour rights. It examines the problem of under-inclusion, especially of workers excluded from access to collective bargaining regimes, and notes the failure of the Charter/human rights regime to adequately respond to the claims of some of the most vulnerable workers to participate in schemes that might provide a potential for addressing significant inequalities that they face.

A “New Dealized” Grand Old Party: Labor and the Emergence of Liberal Republicanism in Minneapolis, 1937 – 1939

In the late 1930s, in Minneapolis and across the urban-industrial North, a cohort of self-described liberal Republicans helped reverse almost a decade's worth of defeats for the Grand Old Party. Liberal Republicans accepted the political reality of a society responsible for the welfare of its individual citizens but rejected the class-based notion of affirmative rights to security and equality that was central to the New Deal. Under Governor Harold Stassen, this “New Dealized” wing of the Republican Party made its most important contributions in the arena of labor relations. Though liberal Republicans applauded trade unionism in principle, Stassen won office by pledging to restrict workers' ability to strike and ridiculing labor's program of social reform as a threat to economic recovery. The Minnesota Labor Relations Act, which swept through the state legislature in 1939, encapsulated Stassen's conservative statism whereby Republican policy makers adopted the statecraft of the New Deal precisely to thwart the working-class forces energized by New Deal legislation. Furthermore, the legwork of the Minnesota Republican US Congressional delegation made Stassen's labor relations act a template for the Labor Management Relations Act of 1947, commonly known as the Taft-Hartley act. By delegitimizing strike activity in law and political discourse, New Dealized Republicanism set the foundation for a system that gutted a more expansive working-class politics and confined unions within a highly vulnerable and isolated collective bargaining regime.

Trade and Unions: Can Exporters Benefit from Collective Bargaining?

Unions are often stigmatized as being a source of inefficiency due to higher collective bargaining outcomes. This is in stark contrast with the descriptive evidence presented in this paper. Larger firms choose to export and are also more likely to adopt collective bargaining. We rationalize those stylized facts using a partial equilibrium model that allows us to evaluate firms’ value functions under individual or collective bargaining. Exporting further decreases average production costs for large firms in the collective bargaining regime, allowing them to benefit from additional external economies of scale due to lower bargaining costs. Our findings suggest that the positive correlation between export status and collective bargaining can be explained through size. Including controls for firm-size destroys the estimated positive relationship between export status and collective bargaining. Using interaction terms between size and the export status, we find that larger exporters tend to do collective bargaining, whereas smaller exporters tend to refrain from collective agreements.

The Quantity and Quality of Teachers: Dynamics of the Trade-Off

The paper addresses the two-fold rise in teacher-student ratio in the American K-12 school system in the post-World War II period accompanied by the evidence of a decline in the relative quality of teachers. We develop a dynamic general equilibrium framework for analyzing the teacher quantity-quality trade-off and offer an explanation to the observed trends. Our OLG model features two stages of education: basic and advanced (college), the latter required of teachers. The cost of hiring teachers is influenced by the outside opportunities for college graduates in the production sector. We show that the latter factor strengthens in the process of endogenous growth and that it affects the optimal trade-off between quantity and quality of teachers such that the number of teachers hired will grow over time while their relative, but not the absolute, human capital attainment will fall. This is accompanied by increasing inequality, among the group of college educated workers in particular. We show that this effect, which we call the rising talent premium, applies whether teacher salaries are determined based on merit pay or, alternatively, by collective bargaining. Moreover, the salary compression characterizing the collective bargaining regime has an additional effect exacerbating the loss of the more talented workers by the teaching profession. Further, we analyze a comparative dynamics effect of exogenous skill-biased technological change which raises the college premium. We show that the effect is detrimental to the aggregate quality of teachers and to the quality of basic education. An important insight from this analysis is that in the process of human capital driven economic growth the rise in premium for high ability outpaces that for the average, whereby this effect is accelerated by technological change. This puts a downward pressure on the “real” quality of education inputs and therefore can create a negative feedback effect on human capital development as a factor of economic growth.

State, Ideology and the Emergence of ‘Good Faith’ Collective Bargaining Regulation in Australia

The aim of this article is to discuss the emergence and practice of a ‘good faith’ collective bargaining regime in Australia. The core argument of the article is that while Fair Work Australia – the industrial regulatory agency created by a Labor government under this regime – is attempting to fulfil the role of an ‘umpire’ in reaching decisions on good faith bargaining, the requirement to promote both market and social objectives highlights tensions that are characteristic of ‘third way’ governmentality. Reviewing decisions by Fair Work Australia on good faith bargaining illustrates this argument.

Changes in the regulation of overtime under different collective bargaining regimes: A comparison of Irish, Norwegian and Swedish banking

This article examines overtime regulations in the banking sector in Ireland, Norway and Sweden since 1980, to assess whether different modes of decentralized bargaining produce different outcomes. Ireland can be considered a case of unorganized decentralization, while Norway and Sweden represent slightly different modes of organized decentralization. A key finding is that overtime regulations generally remain stable and that the social partners at company level in all three systems have the necessary scope to adjust overtime regulations to meet specific challenges. Overtime remains the most important source of flexibility in regulated working time, although we believed that banking was likely to adopt new ways of structuring working time. In practice, however, performance policies are linked to unpaid overtime and the abuse of time off in lieu, in a way that undermines collectively negotiated overtime regulations. This seems to be a sectoral characteristic that overrides institutional differences.

Mixing the princes and the paupers: Pay and performance in the National Basketball Association

We investigate how team and individual performances of players in the National Basketball Association respond to variations in intra-team pay inequality. By breaking down team dispersion into conditional and expected components, we find that expected pay dispersion has a positive effect on team and individual performance. We find that team and individual performances are essentially orthogonal to conditional pay inequality, counter to the hypotheses of fairness and cohesion proposed in the literature both for sports and general occupations. A change in collective bargaining regime in 1996 had little impact on either team or player productivity.

The ‘New’ Industrial Relations and International Economic Crisis: Australia in 2009

While the sphere of industrial relations was overshadowed by the global financial crisis, 2009 was a year of immense change in the regulation of work and workplaces. Many provisions of the Rudd government’s Fair Work Act 2009, including the new collective bargaining regime, came into effect. Unions and employer organizations were preoccupied with the monumental process of award modernization throughout 2009. The AIRC has ceased to exist and it, along with a number of other regulatory bodies, has been subsumed into the new institution Fair Work Australia. The remaining key provisions of the Fair Work Act 2009, including the NES and modern awards, are effective on January 1 2010. This article analyses the early days of the operation of this ‘new’ Australian industrial relations.

Compulsory Arbitration and the Right to Strike: The Experience of Alberta’s University Faculty.

University academic staff in Alberta operate under a collective bargaining regime in which compulsory arbitration replaces strike/lockout to resolve disputes over contract renewal. How did this come about? And what has the experience been under a regime of interest arbitration? This paper addresses these questions by investigating the origins of faculty association collective agreements in Alberta, tracing arbitral experience over the past thirty years, and looking more closely at a group of four arbitrations in 2001-2003. The paper concludes by asking whether it is time for academic staff associations to assert their fundamental right to strike, regardless of what is in their collective agreements or in the statute governing their collective bargaining.