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A9011115
Academy on Social Dialogue and Industrial Relations
Professor Gerhard Bosch, Institute for Work, Skills and Training, University of Duisburg-Essen, Germany ([email protected])
”Outcomes of Collective Bargaining”
Turin, Italy • 26 November 2018 – 07 December 2018
www.itcilo.org 2
High differences in coverage by collective agreements (CA’s) in the world
Coverage depends on the level of agreements: is higher with multi-employer collective bargaining and lower with firm- or plant level bargaining, in between in mixed systems and zero where unions are forbidden
Coverage is high and stable in countries:• With high trade union density (Sweden, Denmark)• With high employer density (mandatory membership in chamber of
commerce (Austria)• With regular extension of agreements (France, Belgium and Greece in
the past) • With wage councils with arbitration (Uruquay)
www.itcilo.org 3
High coverage by CA’s through multi-employer bargaining
Source: Hayter/Visser 2018 Collective Agreements: Extending Labour Protection, ILO Geneva
www.itcilo.org 4
Low coverage by CA’s through single-employer bargaining
Source: Hayter/Visser 2018 Collective Agreements: Extending Labour Protection, ILO Geneva
www.itcilo.org 5
Dynamics of the predominant level of collective bargaining (CB)
www.itcilo.org 6
Controversial debate on the outcome of collective agreements among economists (I)
Neo-liberal view – focus only on labour costs• a barrier to micro and macro-flexibility• no other economic functions (like regulation of training, working time
time, internal flexibility, co-determination ….)• no societal effects like balancing power relations in society, giving
workers a voice in politics Dominant view of IMF, World Bank, EU Commission after 2009, World
Economic Forum …….
Main recommendations: abolition of centralized or industry wide CB, ofextension of agreements, of favorability principle, of after-effects as in Portugal, Spain, Roumania, Greece after 2009 or on Chile after 1973
Outcome is an empirical question
www.itcilo.org 7
World Economic Forum does not like industry wide CB in Germany and Sweden (ranking of 138 countries)
Source: World Economic Forum, The Global Competitiveness Report 2016–2017, own presentation
www.itcilo.org 8
Controversial debate on the outcome of collective agreements among economists (II)
Institutionalist view on centralized or industry-wide CB• Most important instrument to reduce inequality of market incomes
up to the middle income classes• Important built-in-stabilizer in economic crisis (avoids breaking down
of domestic demand)• Source of internal flexibility – beneficial substitute for unhealthy high
levels of hiring and firing• Reduction of bureaucracy and transaction costs – self-regulation
instead of state intervention• Levelled playing field for companies - Fair competition increases
incentives to invest in skills• Positive wider societal effects: Trust and democracy
www.itcilo.org 9
CA’s reduce inequality: Rate of coverage by CA’s and share of low-wage work in the EU (2014)
Source: Visser 2015, Eurostat, own calculations
Diagramm1
22.48
11.94
15.08
14.76
2.64
5.28
8.81
3.79
24.4
21.26
17.75
22.76
23.56
8.61
23.96
25.46
18.52
19.21
12.03
9.44
18.69
21.56
18.47
14.59
18.19
19.33
adjcov: Adjusted bargaining (or union) coverage rate
share of low wage earners in %
Coverage by collective agreements in %
Correlation: - 0,82
DE
LU
MT
AT
SE
FI
FR
BE
RO
UK
HU
EE
PL
DK
LT
LV
NL
SK
PT
IT
CZ
IE
SI
ES
BG
CY
57.6
59
62.79
98
89
93
98
96
35
11.92
23
23
14.67
84
9.89
15
84.84
24.9
67
80
47.29
40.49
65
77.58
29
45.19
Data
Niedriglohnempfänger als Prozentsatz der gesamten Angestellten (ohne Auszubildenden) nach Geschlecht [earn_ses_pub1s]
Letzte Aktualisierung07.12.16
Exportierte Daten19.02.17
Quelle der DatenEurostat
UNITProzent
SEXInsgesamt
SIZECLAS10 Arbeitnehmer und mehr
GEO/TIME200620102014Niedriglohnempfänger als Prozentsatz der gesamten Angestellten (ohne Auszubildenden) nach Geschlechtadjcov: Adjusted bargaining (or union) coverage rateKorr
Europäische Union (28 Länder):16.9617.15DE22.4857.6-0.82
Europäische Union (27 Länder)16.6916.9317.15LU11.9459
Euroraum (19 Länder)::15.88MT15.0862.79
Euroraum (17 Länder)14.2714.7815.7AT14.7698
Belgien6,82+B34B16:B406.373.79SE2.6489
Bulgarien18.922.0118.19FI5.2893
Tschechische Republik17.0518.1918.69FR8.8198
Dänemark8.318.178.61BE3.7996
Deutschland (bis 1990 früheres Gebiet der BRD)20.322.2422.48RO24.435
Estland23.1923.7622.76UK21.2611.92
Irland21.4120.6621.56HU17.7523
Griechenland15.7312.82:EE22.7623
Spanien13.3714.6614.59PL23.5614.67
Frankreich7.136.088.81DK8.6184
Kroatien:21.35:LT23.969.89
Italien10.2712.369.44LV25.4615
Zypern22.6522.6219.33NL18.5284.84
Lettland30.927.8125.46SK19.2124.9
Litauen29.1227.2423.96PT12.0367
Luxemburg13.1813.0611.94IT9.4480
Ungarn21.8719.5117.75CZ18.6947.29
Malta14.4317.6115.08IE21.5640.49
Niederlande17.7417.4618.52SI18.4765
Österreich14.1915.0214.76ES14.5977.58
Polen24.7224.1623.56BG18.1929
Portugal20.7216.0812.03CY19.3345.19
Rumänien26.8525.8224.4
Slowenien19.2417.1418.47
Slowakei18.319.0319.21
Finnland4.755.855.28
Schweden1.772.512.64
Vereinigtes Königreich21.7722.0621.26
Island11.248.997.54
Norwegen6.487.278.29
Schweiz:11.039.37
Montenegro::27.25
Die ehemalige jugoslawische Republik Mazedonien:28.2525.13
Serbien::22.91
Türkei0.240.40.46
Sonderzeichen:
:nicht verfügbar
Data
adjcov: Adjusted bargaining (or union) coverage rate
Share of low wage earners
Coverage by collective agreements
Korrelation: - 0,82
DE
LU
MT
AT
SE
FI
FR
BE
RO
UK
HU
EE
PL
DK
LT
LV
NL
SK
PT
IT
CZ
IE
SI
ES
BG
CY
www.itcilo.org 10
CA’s create middle income groups through differentiated wage grids and effective minimum wages by industry
:
Source: Bosch, G (2017) “Intersection between minimum wages and collective bargaining to increase pay equity”
MW
EMPL
OYE
ES (%
)
WAGE WAGEMW | CA
www.itcilo.org 11
Wages curves in Chile (no or decentralized CA’s) and Germany (industry-wide CA’s)
www.itcilo.org 12
Breakdown of internal demand after the abolition of industry-wide CB as built-in-stabilizer in Greece: Collapse of internal demand
-10
-8
-6
-4
-2
0
2
4
6
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Spring 2008
Fall 2008
Spring 2009
Fall 2009
Spring 2010
Fall 2010
Spring 2011
Fall 2011
Spring 2012
Fall 2012
Spring 2013
Fall 2013
Spring 2014
Fall 2014
Spring 2015
Fall 2015
Spring 2016
Fall 2016
Spring 2017
Spring 2008Fall 2008
Spring 2009Fall 2009
Spring 2010
Spring 2011
Spring 2012
Fall 2012
Spring
Spring 2014
Fall 2014Spring 2015
Fall 2015
Fall 2016
Spring 2017 Fall 2017
Source: EU Commission, own compilation
www.itcilo.org 13
Main results of most recent empirical studies on CA’s (I) Reduction of inequality: “… the erosion of labour market institutions
in the advanced economies is associated with an increase of income inequality” (Jaumotte/ Buitron 2015: 27, World Bank).
Positive effects on employment: “Co-ordinated systems are linked with higher employment and lower unemployment, also for young people, women and low-skilled workers than fully decentralisedsystems" (OECD 2018)
www.itcilo.org 14
Main results of most recent empirical studies on CA’s (II)
The articulation between different levels of CB of the whole system is more important than a single institution for sustainability, flexibility and performance: uncontrolled decentralisation has negative effects – articulation between company and industry-wide CB positive effects (OECD 2018)
Extension of scope and time horizon through co-ordinatedCB: negotiations on internal flexibility (skills, working-time)
“In some countries, trade unions and employer organisations engage in sector-level initiatives that aim to enhance labour market adaptability by facilitating job transitions and providing workers with the skills needed in a changing world of work” (OECD 2018)
Negotiations on internal flexibility not automatic outcome of co-ordinated CB – depends on actors, on workplace participation and an innovation friendly environment
www.itcilo.org 15
Best practice of CB: Innovative agreements (I)
Norway: Industry Agreement 2016-18 y – Chapter on Competence: Annual discussion with shop stewards on competence gaps in relation to needs, creation of opportunities for unskilled to get a trade certificate, updating the qualification of skilled workers.
Outcome: High productivity and employment rates of older and unskilled workers
Germany: Many CA’s on the recruitment of apprentices on national, regional and company level.
Outcome: lowest youth employment rate in the EU, recruitment of 540 000 apprentices even in the great recession 2009
www.itcilo.org 16
Best practice of CB: Innovative agreements (II)
Germany: Many CA’s on working flexibility: • adaption of hours to business cycle (compromises between
employers and employees interests) • temporary reduction of working hours in an economic crisis to avoid
dismissals (“Dismissing hours not employees”)• improving health and safety (new more ergonomic shift systems) • Increasing calculability of hours (minimum duration of notice for
variations of working hours)• Increasing working time options of employees: Recent CA’s of
German Railways and in metal industry give employees options between money and 8 free days: more than 50% voted for free days / even 80% of shift workers
www.itcilo.org 17
Percentage of fall in total labour input due to fall in working hours per employee, Germany, 2008–2009
0
10
20
30
40
50
60
70
80
90
100
Source: EUROSTAT .
Diagramm1
US
EU27
DE
AT
BE
NL
SE
IT
FI
DK
FR
UK
PL
EL
BG
ES
IE
RO
PT
CY
MT
CZ
EE
HU
LV
LT
SK
SL
East
30
33
97
49
38
38
37
35
33
32
31
30
24
18
10
8
8
6
4
0
0
0
0
0
0
0
0
0
Sheet1
USEU27DEATBENLSEITFIDKFRUKPLELBGESIEROPTCYMTCZEEHULVLTSKSL
East3033974938383735333231302418108864000000000
www.itcilo.org 18
Political Impact: Decreasing participation in elections low wage earners in Germany
Source: Bundesregierung, Armuts- und Reichtumsbericht 2017.
IncomeClassSkills
low middle high
www.itcilo.org 19
Conclusions
Recommendations to deregulate co-ordinated CB not based on facts
Research shows positive outcome of co-ordinated CB on employment
CA‘s powerful instrument to reduce inequality of market incomes: No need to choose between employment and equality
CA‘s help developing internal flexibility – many innovative agreements
Important: articulation between levels
Creative actors needed: learning from good examples
Foliennummer 1High differences in coverage by collective agreements (CA’s) in the worldHigh coverage by CA’s through multi-employer bargainingLow coverage by CA’s through single-employer bargainingDynamics of the predominant level of collective bargaining (CB)Controversial debate on the outcome of collective agreements among economists (I)World Economic Forum does not like industry wide CB in Germany and Sweden (ranking of 138 countries)Controversial debate on the outcome of collective agreements among economists (II)CA’s reduce inequality: Rate of coverage by CA’s and share of low-wage work in the EU (2014)CA’s create middle income groups through differentiated wage grids and effective minimum wages by industryWages curves in Chile (no or decentralized CA’s) and Germany (industry-wide CA’s)Breakdown of internal demand after the abolition of industry-wide CB as built-in-stabilizer in Greece: Collapse of internal demandMain results of most recent empirical studies on CA’s (I)Main results of most recent empirical studies on CA’s (II)Best practice of CB: Innovative agreements (I)Best practice of CB: Innovative agreements (II)Percentage of fall in total labour input due to fall in working hours per employee, Germany, 2008–2009 �Political Impact: Decreasing participation in elections low wage earners in GermanyConclusions