1 / 19

ECONOMIC VIEW OF COLLECTIVE BARGAINING

ECONOMIC VIEW OF COLLECTIVE BARGAINING. Unions a Disruption to Competitive Markets Cause a Misallocation of Resources. UNIONIZED SECTOR. NONUNION SECTOR. Sn. Wu. Su. Wn. Wn. Wu. Eu. En. Wn. Wu. Management Perspective. Dominant in U.S. Flows from Economic Perspective

kirima
Download Presentation

ECONOMIC VIEW OF COLLECTIVE BARGAINING

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. ECONOMIC VIEW OF COLLECTIVE BARGAINING • Unions a Disruption to Competitive Markets • Cause a Misallocation of Resources Theories

  2. UNIONIZED SECTOR NONUNION SECTOR Sn Wu Su Wn Wn Wu Eu En Wn Wu

  3. Management Perspective • Dominant in U.S. • Flows from Economic Perspective • Firm (management) has knowledge and legal authority/responsibility to allocate resources (capital and labor) efficiently in best interests of stakeholders and customers of firm Theories

  4. Perlman (1928) • Strength of institution of private property • Capacity of business to convince society that only they know how to run things • If business is prevented from doing what it is best for business, wealth and jobs will decline • Acceptance by body politic of this Theories

  5. Implications for Unions and Collective Bargaining • Legitimizes opposition to collective bargaining and unions • Unions seen as preventing management from doing what it must do • Forces unions into a lower, unequal status • Default is nonunion Theories

  6. Two Concepts • Firms are price takers in all markets (labor and product) • Employment an economic transaction • Both parties are equal and price takers • Raising wages or compensation through collective bargaining is an inefficient use of market power • Management of firms must have full discretion over resources to make decisions in best interest of • efficiency (economic view) • Shareholders/owners (private property view) Theories

  7. Relax Price-Taker Assumption for Labor Market • Inequality • Status • Bargaining Power • Bilateral Perspective • Balance Required • Economic transaction concept becomes less appropriate than under the price taker assumption • Need other ways to structure employment relationship Theories

  8. Concept of Countervailing Power • Large institutions will offset the counter the influence of other large institutions • Assume all institutions pursue their self-interest • Unions will counter firm power • “checks and balance” type system Theories

  9. GOVERNANCE VIEW • Focuses on how decisions are made • no CB - unilaterally • CB – jointly or negotiated • Permits workers to participate in decisions affecting them • Transference of notions of democracy to the workplace • property rights only provide authority over property • does not necessarily provide authority over people Theories

  10. INDUSTRIAL DEMOCRACY VIEW • Workplace is analogous to society • Cannot have democracy in society without democracy in the workplace Theories

  11. Law and Values View • Values in United States • Individualism • rights of individuals superior to other rights • property rights a derivative of individual rights • individuals free to order economic transactions so long as no laws are broken - freedom of contract • Corporations are Legal Individuals • Purchase and sale of labor an exchange transaction • Unions attempt to collective an individual transaction Theories

  12. Law and Values View (CONT.) • Values in U.S. and Law • Unequal status of employers and unions • conflicts between ind\property rights and collective rights usually resolved in favor of ind rights • “reserved rights” theory of management • Impact on IR System • Unions • Employers\Corporations • Product Market Theories

  13. ACTIONS ASSOCIATED WITH EMPLOYEE DISSATISFACTION • Economic View - Exit • Governance View - Voice Theories

  14. INDUSTRIAL RELATIONS SYSTEMS • OUTCOMES ARE RULES • PROCEDURAL RULES • SUBSTANTIVE RULES • HOW ARE RULES ESTABLISHED? • MANAGEMENT • GOVERNMENT • WORKERS HIERARCHY • MANAGEMENT-WORKERS • MANAGEMENT-WORKERS-GOVT Theories

  15. INDUSTRIAL RELATIONS SYSTEMS (CONT.) • ACTORS • MGMT, GOVT, WORKERS/ORGS • CONTEXTS • TECHNOLOGICAL • TYPE OF PRODUCT OR SERVICE • AIR TRAVEL • GEOG DISPERSION • VARIABLE HOURS, ETC. • MANUFACTURING (PAPER) • GEOG CONCENTRATION, • LONGER SHIFTS (ETC.) Theories

  16. INDUSTRIAL RELATIONS SYSTEMS (CONT.) • CONTEXTS (CONT.) • MARKET/BUDGETARY • SHELTERED • COMPETITIVE • LOCUS OF POWER IN SOCIETY • OUTSIDE IR SYSTEM • POLITICAL INFLUENCE OF UNIONS • CANADA - PARLIAMENTARY SYSTEM & NDP • U.S. - LINK TO DEMOCRATIC PARTY • EMPLOYER LINK TO REPUBLICAN PARTY Theories

  17. INDUSTRIAL RELATIONS SYSTEMS (CONT.) • WHAT ARE THE RULES • SUBSTANTIVE • COMPENSATION IN ALL FORMS • DUTIES AND PERFORMANCE OF WORKERS • RIGHTS OF WORKERS • PROCEDURAL • FOR RESOLVING DISPUTES • CHANGING THE RULES Theories

  18. INDUSTRIAL RELATIONS SYSTEMS (CONT.) • IDEOLOGY • A SET OF COMMON BELIEFS THAT HOLDS SYSTEM TOGETHER • ACTORS’ IDEOLOGIES MUST BE COMPATIBLE • EXAMPLES • EUROPE • CLASS LINES • COLLECTIVE WORKER ACTIVITY A NATURAL COROLLARY TO CLASS Theories

  19. INDUSTRIAL RELATIONS SYSTEMS (CONT.) • EXAMPLES (CONT.) • UNITED STATES • INDIVIDUALISTIC • LESS COMFORTABLE WITH COLLECTIVISM AND UNIONISM, ESPECIALLY IF IMPOSED ON UNWILLING INDIVIDUALS (FREEDOM OF ASSOC.) • A NECESSARY EVIL • COMPOSITIONAL ISSUES • WHAT IS GOOD FOR EVERYONE IS NOT NECESSARILY GOOD FOR EVERY ONE • SCOPE OF INCLUSION • EXTENSION TO ALL EMPLOYERS IN EUROPE • UNIT BY UNIT CHOICE IN U.S. Theories

More Related