Collective Bargaining in the Canadian Public Sector, 1978–2008: The Consequences of Restraint and Structural Change

We study public‐sector bargaining and contract outcomes using Canadian data from 1978 to 2008. We have a number of interesting results, but our principal findings are from our analysis of wage settlements. We find that the essential services designation, which only allows non‐essential members of a bargain unit to strike, is associated with decreases in wages. Our estimates also suggest that there is an arbitration wage premium and that making adjustments to the ability to pay criterion used by arbitrators to determine awards does not affect this premium. We also discuss the implications of our estimates.     

‘til Dissolution Do Us Part: (Re)Assessing the First Contract and Trial Marriage Goals of First Contract Arbitration in Ontario

Using a series of labor law reforms in the Canadian province of Ontario between 1991 and1998, this article seeks to (re)assess and compare the effectiveness of two forms of first contract arbitration (FCA) in satisfying the primary policy goals of aiding in the achievement of a first contract and in establishing lasting bargaining relationships. In contrast to previous research findings using this setting, the analysis fails to identify any statistically significant difference in the achievement of first contracts across the automatic and no‐fault forms of FCA. Further, estimates do not appear to identify a statistically significant difference in the establishment of lasting bargaining relationships, defined as the settlement of three of more collective agreements, across the two forms of FCA. These findings indicate that differences observed during this period in the first contract success rate and the establishment of bargaining relationships may be confounded with other factors than the changes to first contract arbitration.     

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.     

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.     

Labor Law and Reaching a First Collective Agreement: Evidence From a Quasi‐Experimental Set of Reforms in Ontario

This paper examines the effects of a major labor law reform package in the Canadian province of Ontario on the negotiation of first agreements for newly certified bargaining units using a quasi‐experimental research design. The findings indicate that first contract success rates were 8–14 percentage points higher under the regime that included automatic first contract arbitration relative to the comparison regime of “no‐fault” first contract arbitration, despite imposition rates being only 2–4 percentage points higher. Further, in the more hostile‐to‐labor regime, only 38 percent of petitions ultimately reached a first agreement despite the presence of quick‐votes, and “no‐fault” first contract arbitration.     

Convergence or Divergence in Final-Offer Arbitration in Professional Baseball

Many labor relations practitioners and theorists believe that final-offer arbitration by a neutral third party encourages union and management officials to resolve their bargaining differences. However, decision scientists have found that there is no median convergence between the parties. Using professional baseball in our model, we test the assumption that major league owners tend to maximize expected monetary value (EMV), finding that claims of divergence are invalidated in dispute management contexts where there is a broad range of other motivations for settling. Decision models offer even further support for the use of final-offer arbitration in such settings.     

Estimating Bargaining Effects in Hedonic Models: Evidence from the Housing Market

Bargaining is common in markets for heterogeneous goods and differences in bargaining power between buyer and seller affect the negotiated transaction price. Previous research has found systematic evidence in the housing markets that weak buyers pay higher prices and weak sellers receive lower prices for their homes. Earlier work has modeled the bargaining effect as a parallel shift in the hedonic function, implicitly assuming that attribute shadow prices were unaffected by the bargaining process. In this paper, we use a sample of home sales where the seller's bargaining power is weakened by the fact that the home is vacant at the time of sale to test whether the effect of bargaining is best captured by a shift in the hedonic constant or whether the attribute shadow prices vary as well. The question is significant for property valuation where estimation of the marginal value of an attribute is commonly used to adjust comparable sales data. We find strong confirmation that bargaining power influences the negotiated price. We also find evidence that bargaining power alters attribute prices, although we do not find a consistent pattern across markets.     

A Quantitative Assessment of the Effect of First Contract Arbitration on Bargaining Relationships

This article investigates first contract arbitration's (FCA) capacity to foster bargaining relationships and deter misconduct by analyzing its effect on decertifications. Using time‐series cross‐sectional (TSCS) analysis with data from nine Canadian provinces over a four‐decade period, it shows: (1) FCA correlates with 20 to 37 percent fewer decertifications in provinces that have an FCA provision relative to those that do not; (2) of the various types of FCA, the automatic and fault forms have the most robust effect on decertifications while the mediation‐arbitration form may have the largest effect on decertifications; and (3) the effect of FCA is heightened in the presence of card‐check certification such that the best results for fostering bargaining relationships may be found in the presence of both policies.     

Indicative and Updated Estimates of the Collective Bargaining Premium in Germany

This study provides updated evidence on the union contract differential in Germany using establishment‐wide wage data and two estimation strategies. It provides pairwise estimates of the union differential based on separate samples of collective bargaining leavers and joiners vis‐à‐vis the corresponding counterfactual groups. We report that average wages increase by 3 to 3.5 percent after entering into a collective agreement and decrease by 3 to 4 percent after abandoning a collective agreement. Excluding establishments that experience mass layoffs does not significantly influence these net findings, although such establishments record wage losses—statistically insignificant for joiners but up to 10 percent in the case of leavers, as compared with the counterfactuals. The backdrop to these new indicative estimates, which are properly conditioned on establishment size and industry affiliation, inter alia, is one of wage stagnation and continuing union decline.     

The Role of Arbitrator Uncertainty in Negotiation Impasses

This article utilizes a unique data set to explore whether uncertainty about arbitration influences the likelihood that negotiators will use it. We use experimental data on decisions made by arbitrators in hypothetical scenarios to calculate a measure of uncertainty for each arbitrator. These data are matched to field data on contract negotiations involving this same set of arbitrators. We find that the greater the uncertainty about the arbitrator, the lower the probability of impasse.     

The Role of Arbitration Costs and Risk Aversion in Dispute Outcomes

The effects of risk aversion and of arbitration costs on bargaining outcomes are investigated using data from 171 simulated negotiations. The results are generally consistent with predictions from a simple economic bargaining model. We find strong evidence that directs costs of arbitration lead to higher rates of agreement. There is only weak evidence the risk aversion is related to the probability of agreement, but negotiated settlements seems to favor the less risk-averse bargainer.     

Productivity and Wage Effects of Firm-Level Collective Agreements: Evidence from Belgian Linked Panel Data

How do firm-level collective agreements affect firm performance in a multi-level bargaining system? Using detailed Belgian-linked employer–employee panel data, our findings show that firm-level agreements increase both wage costs and labour productivity (with respect to sector-level agreements). Relying on approaches developed by Bartolucci and Hellerstein et al., they also indicate that firm-level agreements exert a stronger impact on wages than on productivity, so that profitability is hampered. However, this rent-sharing effect mostly holds in sectors where firms are more concentrated or less exposed to international competition. Firm agreements are thus mainly found to raise wages beyond labour productivity when the rents to be shared between workers and firms are relatively big. Overall, this suggests that firm-level agreements benefit both employers and employees — through higher productivity and wages — without being very detrimental to firms’ performance.     

Estimating the Wage Premium of Collective Wage Contracts: Evidence from Longitudinal Linked Employer–Employee Data

Using a large‐scale linked employer–employee dataset from western Germany, this paper presents new evidence on the wage premium of collective bargaining contracts. In contrast to previous studies, we seek to assess the extent to which differences in wages between workers in covered and uncovered firms arise from the nonrandom selection of workers and firms into collective bargaining coverage. By measuring the relative wage changes of workers employed in firms that change contract status, we obtain estimates that depart considerably from previous results relying on cross‐sectional data. Results from analyzing separate transitions show that leaving industry‐level contracts is associated with subsequent wage losses. However, the results from a trend‐adjusted difference‐in‐difference approach indicate that particularly the transitions to no coverage appear to be associated with negative shocks. Overall, our findings provide no evidence of a “true” wage effect of leaving wage bargaining, once we account for differences in pretransition wage growth.     

The Ascendancy of Employment Arbitrators in US Employment Relations: A New Actor in the American System?

In this paper, we survey the underpinnings of the trend towards employment arbitration in the United States, and its implications for the broader industrial relations system. Specifically, we address the question of whether or not employment arbitrators have been substituted for collective bargaining by the government to an extent that warrants their inclusion as an actor in the industrial relations system. We review developments in workplace dispute resolution in the United States, the literature that attempts to explain these developments and posit an assessment of the stability of employment arbitration, and employment arbitrators, as a central feature of the US industrial relations system.     

Do Public-Sector Strike Bans Really Prevent Conflict?

This article examines the effectiveness of strike-ban laws in reducing industrial conflict at the municipal level of government. Our central findings are that job actions were higher in states that had no law or no finality in the law, publicity campaigns were used as a pressure tactic in the bargaining process, and grievance delays were greatest under final offer arbitration. Thus dispute costs are highest in jurisdictions that provide no finality in dispute resolution whether or not an explicit framework for bargaining exists.     

Bargaining Effects of the Mandatory-Permissive Distinction

This study uses a laboratory experiment to examine empirically the effect of the mandatory permissive distinction on the negotiation of wages, employment guarantees, and advertising expenditures. Results suggest that negotiators spend more time bargaining over a smaller settlement range when an issue is mandatory than when it is permissive. Further, tentative findings provide no evidence that negotiators can circumvent the distinction through the use of tradeoffs across issues or bargaining power.     

Testing a Behavioral Theory Model of Labor Negotiations

The Behavioral Theory we have developed stands up well and helps us gain a better feeling for the behavioral dynamics of collective bargaining. As expected, economic variables such as bargaining power and the estimated cost and probability of a work stoppage are important determinants of bargaining behavior. Nevertheless, the variables have a differential effect on bargaining goals, with strong bargaining power and low probability of a strike contributing to both distributive and integrative bargaining, whereas high expected costs of a strike help to persuade constituents to support their negotiators (intraorganizational bargaining). Thus we see the roie of intraorganizational bargaining as an alternative to being able to obtain a better settlement from the opponents. Attitudinal structuring seems to be more closely tied to integrative bargaining than was indicated by Walton and McKersie. Furthermore, there seems to be less direct conflict between the tactics used in integrative bargaining and those used in distributive bargaining than predicted by theory. Perhaps the mixed nature of most bargaining keeps the majority of negotiators from applying all-out distributive tactics. At any rate, strong bargaining power, constructive relationships, clear and specific statements of issues, as well as exploring them in a noncommital fashion, seem to aid both distributive and integrative bargaining. We uncovered a number of relationships which varied significantly according to the side (labor or management) and/or team role (chief negotiator or other team member) of the respondent. Although we feel they should be included in the theory of bargaining as moderator variables, and have thus included them in our model, we have only hinted at their impact in this paper. Overall, bargaining behavior and conditions seem to have as much effect on bargaining success as do the economic variables. Of course, we did not measure every possible economic variable, but neither did we examine all possible tactics. Our study confirms that collective bargaining is an interpersonal, attitudinal process as well as an economic one and that there are several distinct goals for the process. We have also demonstrated that, despite problems of locating current negotiations and obtaining an adequate rate of response, field study of the behavioral aspects of collective bargaining is feasible. We hope that investigations along this line will continue.     

Does Individualizing the Labor Contract Hurt Women?

The twenty‐first century has been marked by a retreat of the collective bargaining rights of public employees throughout the United States. This study exploits the variation in legal environments resulting from these reforms to estimate the causal impact of different collective bargaining policies on public employee compensation. Using data from the American Community Survey, results show a modest wage penalty at the aggregate level for employees covered by constraints on collective bargaining. However, this wage penalty is differential and is concentrated on women in all but one case—a legal environment in which collective bargaining over wages has either been prohibited or directly constricted, allowing governments to periodically institute wage freezes and caps on raises for public employees. In this case, a pre‐existing wage gap in which men earned more than women is disappearing as male and female earnings converge at a lower wage. The paper suggests that the long‐term effects of restricting collective bargaining occur through the individualization of the labor contract and should be examined along individual‐level characteristics, such as gender.     

Unionism in State and Local Governments: Ohio and Illinois, 1982-87

Census of Governments (COG) data for 1982 and 1987 were analyzed to assess growth in state and local government unionism in Ohio and Illinois, two states that enacted comprehensive public employee bargaining legislation in 1983. Against a backdrop of stable state and local government unionism across the United States, Ohio and Illinois recorded substantial gains in certain sectors. The greatest gains were observed in sectors that had been only lightly unionized prior to enactment of law. Laws had much less impact on more heavily unionized sectors. In spite of the gains, Ohio and Illinois remain substantially less unionized, on average, than do states that enacted comprehensive bargaining legislation earlier.     

The International Monetary Fund’s interventions in food and agriculture: An analysis of loans and conditions

The mandate and competence of the International Monetary Fund (IMF) does not cover food and agriculture policies. While there is anecdotal evidence that the IMF engages in these policies regardless, the state-of-the-art lacks a systematic empirical foundation to identify the extent of its mission creep into these sectors. Based on a combination of machine and human coding, we present a comprehensive database on the IMF’s policy interventions in food and agriculture. Using new data on ‘conditionalities’—policies that governments must implement to access IMF credit—we assess to what extent the IMF has targeted these sectors for the period 1980 to 2014. Our analysis evaluates the agricultural content and ideological orientation of conditions according to whether they promote a developmental state, a night-watchman state, or neither. We find about 2% of all IMF conditions (1105 of 58,406) directly target food and agriculture issues. These are present in 43% of all IMF programs (332 of 781); and affect 100 countries (of the 131 countries that have had an IMF agreement). In addition, our analysis reveals that 59.2% of these conditions embody policy measures in line with night-watchman state policy preferences, 40.1% are model-neutral, and 0.7% developmental. Within the model-neutral category, 23.9% are conditions oriented towards building state capacity; 2.7% have a poverty reduction content; and 2.9% contain pro-environment policies. The IMF’s primary reason for targeting food and agriculture is to enforce fiscal discipline by removing subsidies, yet our analysis identifies that only 8% of these policies abolish subsidies. A more consistent explanation of the IMF’s interest in food and agriculture is its broader mission creep into development policy, and its deep-rooted pro-market ideology.