The Effect of International Unions on Wage Determination in Canada

This article uses collective bargaining agreement wage data spanning 1964–92 to analyse the effect of international unions on wage determination in Canadian manufacturing. Real wage levels for international unions relative to domestic unions are estimated to decline from approximately 4 per cent higher in the 1960s to 4 per cent lower in the 1990s. International unions are also found to be more responsive to US economic conditions. Finally, affiliation with different union federations is a significant determinant of real wage outcomes with AFL–CIO affiliated unions having lower real wages, on average.     

Lopsided inclusion: The impact of multi-employer bargaining and class-based unionism on non-regular employment in South Korea

This study examines the impact of multi-employer bargaining on non-regular workers across different unions and types of non-regular employment. Using national representative survey data from South Korea, I find that multi-employer bargaining increases the likelihood that a workplace union would address a pay increase for non-regular workers when the union was affiliated with a confederation espousing class-based as opposed to business-unionism. However, such a relationship was weaker for temporary agency workers and subcontractors than for direct-hire fixed-term workers. This mechanism is further illustrated through a second round of data collection and analysis, namely in-depth interviews. I identify two factors that characterize the class-based confederation: (1) centralized pressure from the union and (2) activists and their identity work. Altogether, these results further an understanding of how the identities of national union confederations can influence local representatives’ approach to representing non-regular workers and how those influences are manifested through workplace-level collective bargaining.     

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.     

The Microeconomic Impacts of Employee Representatives: Evidence from Membership Thresholds

Employee representatives in firms are a potentially key but not yet studied source of the impact of unions and works councils. Their actions can shape multiple drivers of firm performance, including collective bargaining, strikes, and training. This article examines the impact of union representative mandates by exploiting legal membership thresholds present in many countries. In the case of Portugal, which we examine here, while firms employing up to forty‐nine union members are required to have one union representative; this increases to two (three) union reps for firms with fifty to ninety‐nine (100–199) union members. Drawing on matched employer–employee data on the unionized sector and regression discontinuity methods, we find that a one percentage point increase in the legal union representative/members ratio leads to an increase in firm performance of at least 7 percent. This result generally holds across multiple dimensions of firm performance and appears to be driven by increased training. However, we find no effects of union representatives on firm‐level wages, given the predominance of sectoral collective bargaining.     

Institutions and Strategies: Trends and Obstacles to Recruiting Workers into Trade Unions in Poland

In this article, we examine the role of institutional context, organizational structures and trade union strategies in tempering membership decline in the number of trade unions in Poland. Empirical data include membership statistics collected for NSZZ Solidarno?? and 54 affiliates of two other largest trade union confederations (OPZZ and FZZ) supplemented by semi‐structured interviews with union leaders. In a decentralized collective bargaining system in Poland, a centralized trade union confederation (NSZZ Solidarno??) can more easily shift resources to efficiently organize workers than decentralized confederations, OPZZ and FZZ, whose development is mostly driven by competing trade unions representing narrower occupational groups. In conclusion, this observation is put in a broader context of the debates about trade union renewal in Eastern Europe.     

Asset-Specific Investment and Unionized Labor

This article investigates the bargaining problem that exists when firms make asset-specific investments and then are subject to excessive union wage demands. In this context, the combination of both large asset specific investment and high union density is important in determining the magnitude of the bargaining problem. Using firm-specific union-density rates and various asset-specificity proxies, evidence is found that the bargaining problem results in substantially lower firm profitability, investment, and employment.     

Bargaining over employment as a firm strategic choice

This paper develops a simple model as to why unionized Cournot firms acting non-cooperatively in the product market may find it optimal to commit to bargaining outcomes with their specific union, which are off the labor demand curve, hence restricting their behavior to non-profit maximizing practices in their product markets. The prediction that power over labor conceded strategically to the union by the firm is negatively linked to union wage power is not rejected on a panel of Belgian firms as well as the prediction that the union bargaining power can be affected by product market structure and other variables affecting union wages.     

The Union Wage Effect in Japan

Previous studies point to Japanese labor unions’ lack of bargaining power that results from their organization at an enterprise level. However, a detailed examination of the institutional setting backed by the Labor Standard Law and Trade Union Law reveals that unions have strong bargaining power against deteriorating work conditions. This paper examines the effect of unions on wages using the Japanese General Social Surveys 2000–2003, which cover a period of economic stagnation. We find a robust union wage premium for both males and females. A Cotton–Neumark decomposition reveals that about one‐fifth of union workers’ higher wage is explained by the difference in the union and nonunion wage structures. We also can confirm the union wage compression effect using the DiNardo, Fortin, and Lemieux (1996 ) method. Union workers are likely to think that they will not find jobs with similar compensation packages if they leave their current jobs. In summary, unions in Japan contribute to an increase in the average wage and compress the wage distribution among their workers. This result is reconciled with previous findings by considering the uniqueness of the macroeconomic conditions of the sample period.     

To Extend or Not to Extend: Explaining the Divergent Use of Statutory Bargaining Extensions in the Netherlands and Germany

Employee coverage by multi-employer bargaining declined since the 1980s in many countries, but countries differ in the extent of that decline. These differences are due, in part, to statutory coverage extension. We analyse the use of statutory coverage extension in two countries, Germany and the Netherlands. Agreements are extended frequently in the Netherlands, where coverage remained stable as a result, but sparingly in Germany, where coverage eroded. The article shows that different employer attitudes are the main cause of this difference. These differences in employer attitudes result from (a) different perceptions of the effects of wage competition by non-organized firms on organized firms and (b) differences in employer views on the appropriateness of state compulsion.     

Linking Union Density and Union Effectiveness: The North American Experience

This study considers how union performance in terms of organizing, bargaining, and political activity are related to severely declining union density (the percentage of the workforce in unions) in the United States and the higher and stable union density in Canada. Canadian unions have remained active in recruiting new members and assign a high priority to organizing, while American unions have shown diminished organizing effort and ability. Canadian unions have demonstrated superior performance in collective bargaining as measured by resistance to concession bargaining and negotiated wage gains, among other factors. Finally, although Canadian unions experienced some political setbacks, they wielded more political influence than their American counterparts in promoting union-specific as well as broad social legislation. Density is examined as both a consequence and determinant of the divergence in union performance.     

Have Unions Turned the Corner? New Evidence on Recent Trends in Union Recognition in UK Firms

This paper reports results from a recent survey conducted on unionization in over 650 firms in the private sector in the UK. The survey shows that since 1997 there has been a slight fall in derecognition, but a relatively large increase in union recognition. This increase in new recognition agreements is consistent with the idea that the incoming Labour government had a positive effect on the ability of unions to gain recognition, either through the 1999 legislation or more indirectly through changing the political climate.     

Union Representation Elelctions and Firm Profitability

Union representation elections are associated with significant declines in firm profitability. In addition to the significant mean effect of union elections on the equity value of firms, there exists substantial variation in the magnitude of equity losses across individual election events. Cross-sectional variation in shareholder equity losses can be explained by the labor intensity of the firm, the size of the union wage premium and fraction of workers organized in "the firm's industry,." the presence or absencse of right-to-work lows in the state where the election is held, the member of workers covered in the representaion election, and the number of previous union representation election in the firm. The empirical results indiacte the equity losses are the greatest in industries where union wage gain are the highest and unionization rates are the largest, and in the most labor-intensive firms, independent of the size of the bargaining unit involved in the election. The latter result indicates the presence of union spillover effects.     

Firm Investment Behavior and Collective Bargaining Strategy

Using survey data on labor union coverage at the firm level, this paper examines union-nonunion differences in investment activity among 706 U.S. companies during the 1970s. Consistent with a model of union rent seeking, firm-level collective bargaining is associated with significantly lower physical capital and R&D investment, even after controlling for firm and industry characteristics. Deleterious union effects on investment are considerable throughout the 1972–80 period, but they vary across industries. Without significant changes in collective bargaining power or strategies, diminished investment activity by unionized companies is likely to exacerbate the already considerable decline in U.S. union coverage     

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.     

Annual Review Article 1991

This paper reviews a number of themes or subject areas in British industrial relations which attained a particular level of prominence in 1991. The leading themes covered are wage determination in the context of recession, public-sector industrial relations, union recognition and derecognition developments, training, HRM competitive strategy and international joint ventures. Among the personal observations and comments made are that derecognition is far from being the most important indicator of management opposition to unions, that some criticisms of HRM are rather misplaced, and that the growth of international joint ventures warrants more attention from industrial relations researchers.     

The Composition of Union Membership: The Role of Pensioners in Italy

This paper considers changes in the membership composition of the three leading Italian trade union confederations during the last fifteen years. The analysis emphasizes the remarkable growth of membership among pensioners and the drop in active workers. The key issue here is that intergenerational aspects of unions' membership components are taken into account in the bargaining process. Unions internalize unemployment externalities on pension benefits resultant on the wage outcome as they consider the welfare of all their members in the economy. A formulation of the union monopoly model with endogenous membership supports these findings, while the econometric evaluation of the membership component effects shows that unions are forced to pursue wage moderation and improvements in employment conditions.     

The Extent of Rent Sharing along the Wage Distribution

The relation between rent sharing and wages has generally been evaluated on average wages. This article uses a unique employer–employee panel database to investigate the extent of rent sharing along the wage distribution in Italy. We apply quantile regression techniques and control for national level bargaining, unobserved worker and firm heterogeneity and endogeneity. Our findings show that the extent of rent sharing decreases along the wage distribution, suggesting that unskilled workers benefit most from firms’ rents. By applying quantile regressions by occupational categories, we show that the decreasing pattern is mainly driven by blue collar workers, while estimates for white collars are higher and basically constant along the wage distribution. We also provide evidence that unions might represent one of the drivers of our findings.     

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.