The resilience of collective bargaining – a renewed logic for joint regulation?
| DOI | https://doi.org/10.1108/ER-09-2018-0256 |
| Published date | 11 February 2019 |
| Pages | 279-295 |
| Date | 11 February 2019 |
| Author | Sian Moore,Ozlem Onaran,Alexander Guschanski,Bethania Antunes,Graham Symon |
| Subject Matter | HR & organizational behaviour,Industrial/labour relations,Employment law |
The resilience of collective
bargaining –a renewed logic for
joint regulation?
Sian Moore, Ozlem Onaran, Alexander Guschanski,
Bethania Antunes and Graham Symon
University of Greenwich Business School, London, UK
Abstract
Purpose –The purpose of this paper is twofold: first, to reassert the persistent association of the decline in
collective bargaining with the increase in income inequality, the fall in the share of wages in national income
and deterioration in macroeconomic performance in the UK; and second, to present case studies affirming
concrete outcomes of organisational collective bargaining for workers, in terms of pay, job quality, working
hours and work-life balance.
Design/methodology/approach –The paper is based upon two methodological approaches. First,
econometric analyses using industry-level and firm-level data for advanced and emerging economies testing
the relationship between declining union density, collective bargaining coverage and the fall in the share of
wages in national income. Second, it reports on ten in-depth case studies of collective bargaining each based
upon analysis of collective bargaining agreements plus in-depth interviews with the actors party to them: in
total, 16 trade union officers, 16 members and 11 employer representatives.
Findings –There is robust evidenc e of the effects of differe nt measures of bargain ing power on the
labour share including union density, welfare state retrenchment, mi nimum wages and female employ ment.
The case studies appear to ad dress a legacy of deregul ated industrial rel ations. A number demons trate
the reinvigoration of collective bargaining at the organisational and sectoral level, addressing the
two-tier workforce and c ontractual differentiation, alon gside the consequences of government pay policies
for equality.
Research limitations/implications –The case studies represent a purposive sample and therefore
findings are not generalisable; researchers are encouraged to test the suggested propositions further.
Practical implications –The paper proposes that tackling income inequality requires a restructuring
of the institutional fra mework in which bargain ing takes place and a leve l playing field where the
bargaining power of lab our is more in balance wi th that of capital. Coll ective bargaining a ddresses a
number of the issues raise d by the Taylor Review of Mode rn Working Practices as es sential for “good
work”, yet is at odds with t he review’s assumption s and remedies. The case s tudies reiterate the
importance of the develo pment of strong workpla ce representation and ba rgaining at workplace le vel,
which advocates for no n-members and provide s a basis for union recru itment, organisatio n and wider
employee engagement.
Originality/value –The paper indicates that th ere may be limits to employer commitmen t to deregulated
employment relations. The e mergence of new or reinvigora ted collective agreement s may represent a
concession by employe rs that a “free”, individualised, deinsti tutionalised, precarious appr oach to industrial
relations, based on wa ge suppression and work intensification, is not in the ir interests in the long run.
Keywords Collective bargaining, Wages, Trade unions
Paper type Research paper
1. Introduction
The dissipation of UK collective bargaining coverage has been accompanied by its decline
as an object of contemporary (rather than historic) academic study, with the outcomes and
processes of bargaining lost from recent industrial relations literature.
Yet the decline in the bargaining power of labour resultant from the fall in union density
and collective bargaining coverage has been associated with rising income inequality,
identified by Brown et al. (2001):
Changes in the structure and coverage of collective bargaining, and declining trade union influence
in wage setting, have permitted a marked increase in wage inequality in Britain since 1980.
Employee Relations:
The International Journal
Vol. 41 No. 2, 2019
pp. 279-295
© Emerald PublishingLimited
0142-5455
DOI 10.1108/ER-09-2018-0256
Received 28 September 2018
Revised 12 December 2018
Accepted 13 December 2018
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/0142-5455.htm
279
The resilience
of collective
bargaining
Rising income inequality has recently become a matter of public and academic debate.
It was highlighted as one of the reasons for the Great Recession, the rise in populism, a
determinant of the outcome of the Brexit referendum and a general threat to democracy
(Onaran and Guschanski, 2016).
The power of trade unions can shape income distribution in two different ways.
First, trade unions affect income distribution within the working class by reducing
wage dispersion among workers and protecting the most vulnerable groups in the
workplace, as illustrated in the case studies in this paper, as well as constraining excessive
pay for management ( Jaumotte and Buitron, 2015). Second, they can play an important
role in the split of the national product between capital and labour. Both dimensions of
inequality have crucial macroeconomic consequences in terms of the level and stability
of economic growth.
This paper has two objectives: first, to reassert the persistent association of the decline in
collective bargaining with the increase in income inequality, the fall in the share of wages in
national income and deterioration in macroeconomic performance in the UK. Second, the
paper presents research on the concrete outcomes of organisational collective bargaining for
workers, in terms of pay, job quality, working hours and work-life balance. Ten case studies
of collective bargaining highlight positive impacts in workplaces with high trade union
membership and active workplace representatives. Further, they appear to address a legacy
of deregulated industrial relations. A number of case studies demonstrate the reinvigoration
of collective bargaining at the organisational and sectoral level, addressing the two-tier
workforce and contractual differentiation, alongside the consequences of government pay
policies for equality. Whilst it is not possible to generalise, there are indications that there
are limits to employer commitment to deregulated employment relations.
The wage share and collective bargaining
The paper draws upon two methodologies to explore the continued efficacy of collective
bargaining to UK workers. First, it looks at the statistical association between collective
bargaining and wage inequality. The decline in labour’s wage share in GDP went along with
weaker growth in output over the last three decades in the UK as well as elsewhere in
Europe and North America (Onaran and Obst, 2016; Onaran and Galanis, 2014;
Stockhammer and Onaran, 2004). Against the backdrop of this massive redistribution away
from labour in favour of capital, households maintained their consumption by accumulating
debt and rising household debt was the fuel for consumption and growth in the UK. This
proved to be a fragile growth model that collapsed in the Great Recession; however, the
recovery in the UK still relies on the same shaky foundations –household debt is as high as
before the Great Recession, while the recovery in the UK is the weakest in the G7.
Neoliberal economic policies in the UK have labelled wages as costs to businesses.
The mainstream common wisdom is that wage moderation, i.e. wages increasing at a slower
pace than productivity, which, in turn, implies a rise in the share of profits in national
income (and a fall in the wage share), will stimulate growth. This relies on the assumption
that increased profits will boost private investment by firms and make exports more
competitive, thanks to lower labour costs. This thinking guides policies that in turn
advocate low minimum wages, weaker trade unions, lax employment protection and
‘non-standard’contracts in the name of labour market flexibility. From the perspective of
this common wisdom, the simultaneous fall in the wage share and growth rates in the UK
and most other major economies, is a puzzle.
The answer to this puzzle lies in the post-Keynesian analysis that emphasises the dual
role of wages: wages are not merely an economic cost detracted from company profits, but
the source of demand in the economy. The post-Keynesian theoretical models have been
formally developed by Rowthorn (1981), Dutt (1984), Taylor (1985), Blecker (1989) and
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