ECONOMIC VIEW OF COLLECTIVE BARGAINING

1
ECONOMIC VIEW OF COLLECTIVE BARGAINING

• Unions a Disruption to Competitive Markets
• Cause a Misallocation of Resources

2
UNIONIZED SECTOR
NONUNION SECTOR
Sn
Wu
Su
Wn
Wn
Wu
Eu
En
Wu
Wn
3
Management Perspective

• 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

4
INDUSTRIAL RELATIONS SYSTEMS

• OUTCOMES ARE RULES
• PROCEDURAL RULES
• SUBSTANTIVE RULES
• HOW ARE RULES ESTABLISHED?
• MANAGEMENT
• GOVERNMENT
• WORKERS HIERARCHY
• MANAGEMENT-WORKERS
• MANAGEMENT-WORKERS-GOVT

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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.)

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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

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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

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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

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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.

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Bilateral Perspective

• Cooperation and Conflict
• Mixed Motive approach
• Inequality
• Status
• Bargaining Power
• Balance Required

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GOVERNANCE VIEW

• Focuses on how decisions are made
• no CB - unilaterally
• CB - jointly
• 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

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ACTIONS ASSOCIATED WITH EMPLOYEE DISSATISFACTION

• Economic View - Exit
• Governance View - Voice

13
INDUSTRIAL DEMOCRACY VIEW

• Workplace is analogous to society
• Cannot have democracy in society without
  democracy in the workplace

14
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

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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