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A Survey of Labor Relations In Market Economies. Chapter Seventeen. Overview. Labor organizations vary Political activity Collective bargaining Decision making within societies, industries, enterprises Organizational structures. Development of Labor Movements. - PowerPoint PPT Presentation
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McGraw-Hill/Irwin Copyright ©2009 The McGraw-Hill Companies, All Rights Reserved.
A Survey of Labor RelationsIn Market Economies
Chapter Seventeen
17-2
Overview
Labor organizations vary Political activity Collective bargaining Decision making within societies, industries,
enterprises Organizational structures
17-3
Development of Labor Movements
European labor unions paralleled U.S. developments German unions in 1848 revolution Swedish in late 19th century British during same time, same manner as U.S.
Knights of Labor Only British resembles U.S. w/recognition obtained
at plant level and adversarial relationship at corporate level
Anarchists, syndicalists advocated revolutionary unionism
17-4
Development of Labor Movements
Early grounds for revolutionaries Germany – Karl Marx
Goals of union/state are synonymous Great Britain – Fabians in Great Britain, socialists
State ownership, planned economies to allocate wealth 1890s Sweden – Swedish Confederation of Trade Unions
(LO), 1900 Swedish Employers’ Confederation (SAF) Industry-wide agreements 1900-1910 after major strikes Conflict until 1930s when government turned to social
Democrats Japan – Unions in 1890s after industrial revolution
Marxist tendencies after WWII - low wages Became enterprise oriented
17-5
Development of Labor Movements
European unions increasingly capitalistic and free market
Unions in socialist economies expected to help meet production goals and maintain discipline
Transformed economy unionization high in state-sector, not in private-sector, where wages higher Fall of communism shifted governance from
employees to shareholders Ex-communists more egalitarian, low job
satisfaction, more strongly supported trade unions
17-6
Structure of Labor Movements
U.S. - Locus of power vested in national unions Not true in other free-market nations Most concentrate union control in labor federations or local level
Swedish power in the LO, deals with employers’ SAF Germany, small group of national unions handle bargaining British unions organize nationally, but locals retain authority Italy, France, Netherlands – political/religious national
federations Japan - bargaining at local, locals affiliate with national
17-7
Structure of Labor Movements
Japanese union member activity predicted similarly to U.S. Length of membership Pay levels Dissatisfaction with pay/working conditions Interactions with others in work group Perceptions of union effectiveness and
democracy
Contrary to U.S., age/educational attainment negatively related, job status unrelated
17-8
Structure of Labor Movements
Little rank-and-file member participation in European unions
Negotiated agreements in major industries often adopted by other employers Less motivation to join unions in Europe than
U.S.
France, union contract coverage very high Union membership lower than U.S.
17-9
Works Councils
Advise management on employment matters May be consulted in overall strategy of organization Operational conflicts between union and works councils
Councils more interested in plant interests than union interests
1994 European Work Council (EWC) directive passed Aimed to increase power of labor Requires transnational employers to establish works
councils with reps from all EU countries in which it operates
17-10
Globalization
Acceleration since 1980s Primarily manufacturing development from
state/foreign investments Asia, Eastern Europe, Mexico, Latin America
Regional trade treaties Increased pressure on trade unions,
reduced ability to gain wage increases due to competition
17-11
Globalization
Developing economies may adopt one of two approaches: Import-substitution industrialization
Limited growth implications – internal consumption limits Export-oriented industrialization
Require output be cheaper or of better quality than domestic products
Countries in first stage of EOI Containing costs, exclusion, repression, stability
Second stage requires increases in work skills/productivity/flexibility Repression ineffective; strikes likely to lead change
17-12
Globalization
Competition leads employers/state to find ways to attract investment Enhance labor’s effectiveness to benefit of capital
Political regimes choose to adopt regressive or benign policy toward labor unions Repressive likely when union could create political opposition
or when state has strong need for tapping the results of economic growth
Benign strategy, wage growth could reduce labor discontent, reduce unionization
Repressive regimes have encountered labor force problems while unions have had less success gaining wage increases
17-13
Globalization
Multinationals may be viewed as “villains,” “necessary evils,” “arm’s length collaborators,” or “partners.”
Authoritarian governments/unions initially opposed multinational investment
Shift in this view Argentina, South Korea, Spain
17-14
Organizing and Representation
Quite unlike U.S. Britain aside, EU members have no worker votes on
representation Unions recognized at national/federation level by
employers Bargaining happens at that level Exclusive representation uncommon Several unions in a workplace, different agendas
Union security differs Several unions may represent employees in “bargaining
unit”
17-15
Organizing and Representation
Japan – enterprise orientation Difficult to take wages out of competition Direct effect on pay/benefits is small Lack of wage premiums unattractive to unorganized
workers Unions in decline in Asian nations Union density varies widely across Europe Quite low in US and declined more than in other
countries More adversarial relationship in U.S. Union wage premiums higher in U.S. Strong local EU unions associated with higher union
density
17-16
Organizing and Representation
Mandatory membership not important in Europe No exclusive representation requirement in most
countries Probability of joining increases among recently
hired men in public sector with pro-union attitude, perceive benefits to outweigh costs, expect to use union services, who believe they have limited career mobility
Leavers likely to be women, older when joined, longer-term members, unemployed or changing jobs, non-union parents, having first child
17-17
Bargaining Issues
Bargaining Issues Broader/narrower outside U.S. No collective bargaining, issues/methods unspecified No distinctions between mandatory, permissive,
prohibited issues No legal duty to bargain, except in Sweden and France Work rules, seniority issues not in contracts, evolve from
tradition Substantial social legislation to handle redundancy
Different contract issues across countries
17-18
Bargaining Structures
Most bargaining at industry level using national unions/federations and employer associations
Increased economic integration across EU requires corporatist deals to pay attention to EU-wide targets
Industry-level bargaining with works councils enhances introduction of technological change Addressing redundancy
17-19
Bargaining Structures
Growing importance of multinational employers may lead to changes Local economic climates increasing competition
Information availability increasingly critical for labor and management
Increase multinational consultation Tendency to move from industry to local level
negotiations Variance between industrial countries relative to
bargaining level, degree of union coordination, labor federation involvement, and government involvement
17-20
Impasses
Incidence and duration of strikes varies across nations
Frequency negatively related to duration and intensity
Strike activity has declined substantially in every country except France and Spain
17-21
Union-Management Cooperation
Different mechanisms to enhance cooperation at three levels of decision making: Shop floor Core Strategic
17-22
Union-Management Cooperation
Three category levels of involvement:1. Advisory
2. Collective bargaining
3. Codetermination
17-23
Union-Management Cooperation
Variation across Europe regarding employee entitlement to information, consultation, participation Works councils legislated in most countries,
union involvement varies Employers must disclose information necessary
to unions for collective bargaining
Difference in cooperation across countries
17-24
Union-Management Cooperation
Worker cooperatives more common in Europe than U.S. Employees own the firm, hire its managers, and
direct its strategy
Higher productivity, more labor-intensive production functions, low pay differentials between rank-and-file and managers, and more tranquil labor relations than private firms
17-25
Union-Management Cooperation
Industrial democracy more developed in industrialized countries than in U.S.
Greater incidence of worker-owned cooperatives, input into managerial selection, other consultation of unions
17-26
Contract Administration
Large differences Bargaining structure differences Contract is basic agreement that plants or
employees can add to
Canada intra-contract strike law and binding arbitration
Germany works council disputes
17-27
Public Sector Unionization
Collective bargaining in international public-sector similar to differences among states in U.S. Level/practice depends on development of
private-sector unionism and friendliness of ruling political party
17-28
Comparative Effects of Unionization
Variety of changes in industrial relations from globalization Stronger focus at enterprise level Increased production and job assignment
flexibility Skill development Declining unionization
17-29
Comparative Effects of Unionization
Investment by U.S. firms negatively related to union density, centralized collective bargaining, layoff restrictions, and contract extension policies
Positively related to education levels and works councils Suggests investors prefer to avoid instances where
bargaining power is reduced Prefer skilled workforces and institutionalized
methods for continuous conflict resolution and problem solving
17-30
Comparative Effects of Unionization
UK – most adversarial system and decentralized bargaining Decisions made at firm or plant level Close to effects of unions in U.S. Investment rates of firms recognizing unions
23% below nonunion firms Introduction of EI programs linked to improved
firm performance in nonunion firms, but decreased performance in unionized firms
17-31
Comparative Effects of Unionization
Germany – unions view themselves as cooperative Unionization related to lower productivity Unionization does not reduce proportional expenses of firms on
research/development or employment in those areas Japan – enterprise unionization has not influenced worker
satisfaction, but has reduced company commitment Korea – unionization increases wages, reduces turnover
Works councils increase employee satisfaction/productivity Productivity assisted by bonus policy, unionization decreases