Did partnership in Ireland deliver for all workers? Unions and earnings
| Pages | 946-960 |
| DOI | https://doi.org/10.1108/ER-10-2015-0196 |
| Published date | 03 October 2016 |
| Date | 03 October 2016 |
| Author | Tom Turner,Darragh Flannery |
| Subject Matter | HR & organizational behaviour,Industrial/labour relations,Employment law |
Did partnership in
Ireland deliver for all workers?
Unions and earnings
Tom Turner
University of Limerick, Limerick, Ireland, and
Darragh Flannery
Department of Economics, University of Limerick, Limerick, Ireland
Abstract
Purpose –After 20 years of social partnership in Ireland the purpose of this paper is to use a national
survey of firms and employees to examine the extent of the wage gap between union and non-union
workers in the private sector and compare the degree of wage inequality in union and non-union firms
and among union and non-union employees.
Design/methodology/approach –The analysis in the paper is based on the National Employment
Survey carried out by the Central Statistics Office in October 2008. Approximately 9,000 enterprises
were sampled and almost 5,000 enterprises responded –a response rate of over 50 per cent while
almost 100,000 employees were sampled and 65,535 completed the questionnaire –a response rate of
over 60 per cent. In total 22 per cent (14,619) of respondents worked in the public sector and 78 per cent
(50,916) in the private sector.
Findings –It appears that over time the earnings premium enjoyed by unionised workers has
declined. This may reflect a long term decline in union bargaining power in the private sector as union
density levels have declined. Even so unionised employees enjoy a wage premium over non-union
employees and collective coverage appears to reduce levels of income inequality. However, the overall
union wage gap is relatively modest –being generally below 10 per cent possibly due to the
harmonising effects associated with the period of social partnership supported by government trade
unions and employers.
Research limitations/implications –The cross-sectional nature of the data means that the factors
associated with variations in employee earnings over time cannot be identified.
Practical implications –There is substantial evidence of a considerable spill-over effect as
nationally agreed rates of pay percolated from the union to the non-union sector. It may also be the case
that social partnership has acted to reduce wage inequality in non-union as well as union
establishments. It appears that partnership type arrangements have the capacity to deliver for all
workers in the private sector.
Originality/value –A unique aspect of the national survey data used here is the availability of
employer/employee matched data from a robust national level survey with measures of union
membership, earnings, individual and employment characteristics.
Keywords Social partnership, Earnings inequality, Union premiums
Paper type Research paper
Introduction
Since 1987 social partnership agreements between government, employers and trade
unions have regularly set annual wage increases across all unionised establishments in
the Irish economy. In all there have been seven formal agreements, usually lasting for a
three year period. The partnership agreements concluded after 1995 coincided with a
remarkable period of economic growth (Nolan et al., 2000; MacSharry and White, 2000).
The last pay agreement (towards 2016) was concluded in November 2008. Yet early in
2009 the agreed pay increases for all public sector workers and many private sector
Employee Relations
Vol. 38 No. 6, 2016
pp. 946-960
©Emerald Group Publishing Limited
0142-5455
DOI 10.1108/ER-10-2015-0196
Received 29 October 2015
Revised 26 May 2016
Accepted 28 June 2016
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/0142-5455.htm
946
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