The Impact of Wage Bargaining Regime on Firm‐Level Competitiveness and Wage Inequality: The Case of Ireland

This paper uses a linked employer‐employee dataset to analyze the impact of institutional wage bargaining regimes on average labor costs and within‐firm wage dispersion in private sector companies in Ireland. The results show that while centralized bargaining reduced labor costs within both the indigenous and foreign‐owned sectors, the relative advantage was greater among foreign‐owned firms. The analysis suggests that there are potentially large competitiveness gains to multinational companies that locate in countries implementing a centralized bargaining system. Furthermore, the results provide additional support to the view that collective bargaining reduces within‐firm wage inequality.     

Centralized Wage Bargaining and the “Celtic Tiger” Phenomenon

Drawing on a variety of sources and research methods, this article argues that centralized wage bargaining contributed to the “Celtic Tiger” phenomenon by linking wage increases in the dynamic multinational companies sector to wage and productivity increases in the much more sluggish domestic sector of the economy and, in so doing, considerably increased the competitiveness of foreign multinational companies—a key driver of Irish growth. The article also argues that much‐received wisdom about the institutional and organizational preconditions for centralized wage regulation needs to be reconsidered in light of the Irish case. Public sector unions played a pivotal role in initiating and sustaining wage centralization, yet their leadership role did not undermine its effectiveness. Likewise, internal democratic procedures and the absence of wage compression policies, rather than centralized organizational structures, facilitated compliance with centralized wage policies.     

The Flip Side of Organized Decentralization: Company‐Level Bargaining in Denmark

The Danish collective bargaining system is often considered a good example of organized decentralization. It has been characterized as a centralized decentralization suggesting a reproduction of sector‐level bargaining relations at company level. A recent survey on company‐level bargaining in the Danish industrial sector confirms this hypothesis with regard to the experiences of local managers and shop stewards. However, part of the survey also questions whether the reproduction will continue in the future. Small‐ and medium‐sized enterprises and their employees tend to miss out on the mutual benefits obtained through company‐level agreements. Furthermore, shop stewards often find it difficult to gain employee support during negotiations, which jeopardizes their bargaining relations with management.     

We Want Them All Covered! Collective Bargaining and Firm Heterogeneity: Theory and Evidence from Germany

This article establishes a link between the degree of productivity dispersion within an industry and collective bargaining coverage of the firms in the industry. In a stylized unionized oligopoly model, we show that differences in productivity levels can affect the design of collective wage contracts a sector‐union offers to heterogeneous firms. Using German linked employer–employee data, we test a range of our theoretical hypotheses and find empirical support for them. The dispersion of sector‐level labour productivity decreases the likelihood of firms being covered by a collective bargaining agreement on the industry level, but increases the likelihood of firms being covered by firm‐level agreements. The results hold for different subsamples and (panel) estimation techniques.     

Knowledge Sharing through Face‐to‐Face Communication and Labour Productivity: Evidence from British Workplaces

We investigate whether the adoption by workplaces of human resources management (HRM) practices that enhance face‐to‐face communication (FTFC) among employees is associated with productivity gains. The analysis is based on a nationally representative sample of over 500 British trading establishments drawn from the linked 2004 Workplace Employment Relations Survey and Annual Business Inquiry, for which objective measures of labour productivity (value added per employee) are available. We find a positive association between productivity and FTFC in problem‐solving groups, teams and meetings of senior or line managers and employees, provided that FTFC is adopted on a continuous basis. Our finding suggests that British workplaces in the trading sector could increase their productivity by implementing HRM practices in such a way as to enhance knowledge sharing through employees' personal interactions.     

Co‐ordinated Bargaining: A Process for Our Times?

This article draws on past as well as present to offer a systematic overview of co-ordinated bargaining, which many commentators see as a likely vehicle for the 'Europeanization' of industrial relations. It argues that co-ordinated bargaining is indeed likely to play a major role within the EU, reflecting not only trade union pressures but also management's use of benchmarking to promote organizational change and competitiveness. The pace with which co-ordinated bargaining develops is likely to vary considerably both within and between sectors, however, leading to multi-speed 'Europeanization' and further decentralization of collective bargaining within national systems.     

The Gender Pay Gap for Private‐Sector Employees in Canada and Britain

The gender earnings differentials for private‐sector employees in Britain and Canada are similar, substantial and significant. Using linked employer–employee data, we show that women are more likely to be employed in low‐wage workplaces than men in both counties. After accounting for the workplace, women continue to earn less than comparable men. Although men and women face a more equal pay structure within their workplace than they do across workplaces, a substantial portion of the gender pay gap in both countries remains unexplained by the individual characteristics or workplace effects considered in this study.     

Fact‐Finding Effectiveness: Evidence from New York State Fact‐Finding Effectiveness

In a collective‐bargaining environment characterized by increasing fiscal and taxpayer pressures, this article examines the continued viability of fact‐finding as a dispute‐resolution mechanism in New York State's public sector. This is an important question because fact‐finding is the final dispute‐resolution procedure for most unionized employees in New York and many other states. Whether fact‐finding effectiveness was measured by the proximity of fact‐finder recommendations to the final settlement or by outright acceptance of the fact‐finder report, regression results show that New York fact‐finding has successfully met the challenges of the intensified environmental pressures in the 1990s. No significant decline was found in its ability to move parties toward the compromise outcome. Part of the fact‐finding's continued success can be attributed to the policy shift by New York's Public Employment Relations Board (PERB) in 1991 in the role of the fact‐finder from an accommodative to a more adjudicative function. The well‐reasoned adjudicative fact‐finding report has more potential to bring public pressure to bear on the extreme positions of the parties. Mediation was better left to the professional PERB mediators. Finally, it also was found that fact‐finders who were full‐time neutrals were more effective under this more adjudicative style.     

Human Resource Management’s Effects on Firm‐Level Relative Efficiency

Using stochastic frontier production functions methodology with data from 1579 private‐sector establishments, we demonstrate that HR practices are significantly associated with differences in relative firm‐level efficiency. Supplemental analysis implies that this efficiency analysis is substantively different than the common approach to evaluating HRM’s relationships with firm‐level labor productivity. The results suggest that HR practices’ contributions to relative firm‐level efficiency are an important but heretofore overlooked factor in the relationship between HRM and firm performance.     

One‐Stop Shopping Behavior,Buyer Power and Upstream Merger Incentives

We analyze how consumer preferences for one‐stop shopping affect the (Nash) bargaining relationships between a retailer and its suppliers. One‐stop shopping preferences create ‘demand complementarities’ among otherwise independent products which lead to two opposing effects on upstream merger incentives: first a standard double mark‐up problem and second a bargaining effect. The former creates merger incentives while the later induces suppliers to bargain separately. When buyer power becomes large enough, then suppliers stay separated which raises final good prices. We also show that our result can be obtained when wholesale prices are determined in a non‐cooperative game and under two‐part tariffs.     

Collective Bargaining and Technological Investment: The Case of Nurses’ Unions and the Transition from Paper‐Based to Electronic Health Records

Does the presence of a unionized nursing workforce retard US hospitals’ transition from paper‐based to electronic health records (EHRs)? After tying archival data on hospitals’ structural features and health information technology (IT) investment patterns to self‐gathered data on unionism, I find that hospitals that bargain collectively with their registered nurses (RNs) appear to delay or forego the transition away from paper, consistent with existing theory and research in industrial relations and institutional economics. However, this relationship is fully mediated by a hospital's payer mix: those serving a larger share of less lucrative, elderly, disabled and indigent patients are more likely to adopt EHRs if they are unionized than if they are not, a result that holds even at the median payer mix. Indeed, this accords with research on the interplay of labour and technology as the aforementioned dynamics are driven entirely by RN‐exclusive bargaining units for whom the new IT serves as a complement rather than as a substitute in production. Given the outsized role that unions play in the US healthcare sector, the overall sluggish performance of the sector, and the expectations that policymakers have for EHRs, evidence that these unions are welfare‐enhancing should be welcome news.     

Salary Distribution and Collective Bargaining Agreements: A Case Study of the NBA

Traditional non‐sports unions attempt to institutionalize pay between workers by reducing productivity‐related differences in wages and increasing pay differences based on seniority and other non‐productivity‐related characteristics. Recent changes made to the collective bargaining agreements of the NBA have mirrored those of unions that are more traditional. The purpose of this article is to analyze how the changes made in the bargaining agreements of the NBA affect the salary distributions of players over time.     

Short Notice,Big Difference? The Effect of Temporary Employment on Firm Competitiveness across Sectors

This article is one of the first to examine how the use of fixed‐term employment contracts (FTCs) affects firm competitiveness (i.e. productivity, wages and profits) while controlling for key econometric issues such as time‐invariant unobserved workplace characteristics, endogeneity and state dependence. We apply dynamic panel data estimation techniques to detailed Belgian linked employer–employee data covering all years from 1999 to 2010. Results show that the effects of FTCs on firm competitiveness vary across sectors: while temporary employment is found (at the 10 per cent significance level) to enhance productivity and profits in (labour‐intensive) services, this is not the case in manufacturing and construction.     

Dominance Effects from Local Competitors: Setting Institutional Parameters for Employment Relations in Multinational Subsidiaries; a Case from the Spanish Supermarket Sector

Dominance effects are normally associated with multinational corporations (MNCs). However, we argue that a strong local competitor can create ‘dominance effects’ setting the institutional parameters for employment relations in multinational subsidiaries. Moreover such an effect can be persistent. In this case the Spanish‐owned El Corte Inglés (ECI) used its power and influence to establish an employer's federation and two ‘yellow unions’. These yellow unions infiltrated the French‐owned MNC Carrefour and most of the Spanish supermarket sector by the early 1980s and continue to dominate collective bargaining rounds and works council elections, marginalizing the main independent trade unions. This has resulted in poor pay and working conditions and a lack of effective employee representation across most of the Spanish supermarket sector. The fact that Carrefour established an international framework agreement to observe union rights in 2001 has as yet not changed this situation.     

Collective Bargaining and Within-firm Wage Dispersion in Spain

This paper analyses the effect of collective bargaining on within‐firm wage dispersion for the case of Spain. What is relevant in the Spanish case is to compare the effect of the two basic levels of bargaining (firm and sector) on wage dispersion. By using the Oaxaca–Blinder decomposition, this paper concludes that collective agreements at firm level have a negative effect on wage dispersion. At the same time, firms that have signed these types of agreements show greater wage dispersion than those covered by agreements at the sector level, owing to the positive and compensating effect of firms’ and workers’ features.     

Job Anxiety,Work‐Related Psychological Illness and Workplace Performance

This article uses matched employee–employer data from the British Workplace Employment Relations Survey to examine the relationship between employee psychological health and workplace performance in 2004 and 2011. Using two measures of work‐related psychological health — namely employee‐reported job anxiety and manager‐reported workforce stress, depression and anxiety — we find a positive relationship between psychological ill‐health and absence, but not quits. The association between psychological ill‐health and labour productivity is less clear, with estimates sensitive to sector, time period and the measure of psychological health. The 2004–2011 panel is further used to explore the extent to which change in psychological health is related to change in performance.     

The Impact of Recession on Adult Training: Evidence from the United Kingdom in 2008–2009

Analysis of longitudinal data from Employers Skills Updating Surveys in the United Kingdom suggests that in many establishments training plans were blown off course by the 2008–2009 recession, with reduced coverage of adult training and especially of off‐the‐job training. The effects of such cutbacks on skill levels have been partially alleviated by more precise targeting of on‐the‐job training on meeting skills improvement needs. However, in a sizeable proportion of establishments, future productivity and competitiveness are likely to be impaired by failure to upgrade adult workers' skills to standards which employers themselves perceived as necessary prior to the recession.     

Bargaining Theory Meets Interest‐Based Negotiations: A Case Study1

This is a case study of the 2005 national contract negotiations between Kaiser Permanente and the Coalition of Kaiser Permanente Unions. Given the scale and complexity of these negotiations, their successful completion provides an exemplar for collective bargaining in this country. In 1997 Kaiser Permanente and the Coalition of Kaiser Permanente Unions formed a labor management partnership, and negotiations were structured around the principles of interest‐based negotiation (IBN). Drawing on direct observation of all parts of the bargaining process, interviews with individuals from Kaiser and the Coalition of Unions, and surveys we conducted after bargaining was completed, we conclude that the parties employed a mix of interest‐based and traditional negotiation processes across an array of integrative and distributive issues. We find that IBN techniques were used extensively and successfully to reach mutually satisfying agreements when the parties shared interests. When interests were in greater conflict, the parties resorted to more traditional, positional tactics to reach resolution. Strong intraorganizational conflicts limited the use of IBN and favored the use of more traditional positional bargaining. While a high level of trust enabled and supported the use of IBN, tensions that developed limited the use of IBN and required surfacing and release before either IBN or more traditional positional processes could proceed effectively. The use of IBN tools helped the parties apply the principles underlying the partnership in which these negotiations were embedded. We conclude that IBN served as a way of applying or operationalizing integrative bargaining and affected the process dynamics in ways the Walton and McKersie theory predicted. As such we see IBN as techniques that neither displace nor render obsolete other aspects of bargaining theory or practice but that show considerable promise for helping collective bargaining to address the complex issues and challenges found in contemporary employment relationships.     

Imports as Product and Labour Market Discipline

This article tests the pro‐competitive effect of trade in the product and labour markets of UK manufacturing sectors between 1988 and 2003 using a two‐stage estimation procedure. In the first stage, we use data on 11,799 firms from 20 manufacturing sectors to simultaneously estimate mark‐up and workers' bargaining power parameters according to sector, firm size and period. We find a significant drop in both the mark‐up and the workers' bargaining power in the mid‐1990s. In the second stage, we relate our parameters of interest to trade variables. Our results show that imports from developed countries have significantly contributed to the decrease in both mark‐ups and workers' bargaining power.     

The Rise of Experimentalism in German Collective Bargaining

This paper addresses the debate on union strategies by analysing industrial relations change in three of Germany's most internationalized sectors: chemicals, metalworking and construction. It characterizes two logics of change in German industrial relations: a battlefield logic and an experimentalist logic. It demonstrates historical trends towards centralization of wage bargaining in each sector before looking at recent pressures for decentralization and flexibility. In chemi‐cals, the social partners control decentralization. In metalworking increasing flexibility is characterized by a mismatch between the national‐level union and the district‐level employers. Finally, the construction union seeks to replace the centralized bargaining system with a state minimum wage.