Unemployment and Industrial Relations
| Date | 01 July 1988 |
| Published date | 01 July 1988 |
| Author | Laurie Hunter |
| DOI | http://doi.org/10.1111/j.1467-8543.1988.tb00747.x |
British Journal
of
Industrial Relations
26:2
July
1988
0007-1080
$3.00
Unemployment and Industrial
Relations
Laurie
Hunter*
1.
INTRODUCTION
The terms of reference for this review were to examine the extent to which
contemporary labour economics, in its analysis of unemployment,
informs and is informed by developments in industrial relations research,
and to indicate what that research has discovered from the experience
of
the
1980s.
The challenge this presents is formidable, for one of the fastest
growing areas of economic inquiry in recent years has been related to the
sharp rise in unemployment, the fact that it has been sustained at a high
level, and the continued association
of
wage inflation with heavy
unemployment, against the normal expectations of competitive market
economics. Considerable energy has been devoted to theoretical
development, and a great deal of empirical work has appeared,
so
that the
potential field for review is massive:
so
much
so,
indeed, that there is no
prospect of doing justice to it at the level of detail. All that can be
attempted is to pick out some
of
the most significant structural &rends,
illustrated as appropriate by selective reference.
I propose
to
look first at what the economics profession has been
doing
to
explain the rise in unemployment. A key ingredient in this
analysis is the problem of wage inflexibility, which economists have
found difficu!ty in explaining satisfactorily. We will discover that
industrial relations influences are playing an increasing part in these
explanations. But equally we will find that there are substantial
discrepancies between the economists’ understanding and that
of
the
industrial relations specialist.
A further strand in the remit is to identify what the experience of the
1980s
has revealed. It will be easier to treat this as part
of
the foregoing
analysis, for the rise in unemployment in the
1980s
is
no
more than an
extension in extreme form
of
what was occurring in the
1960s
and
1970s,
a
seemingly inexorable rise in unemployment with little evidence
of
significant reversal. What the experience
of
the
1980s
has done is to focus
more attention on the associated problems, and to enforce consideration
*Professor
of
Applied Economics, Department
of
Social
&
Economic Research, Univer-
sity
of
Glasgow.
Unemployment and Industrial Relations
203
of
the reasons for, and the implications
of
a
sustained
high level
of
unemployment.
Once the economics arguments and their use
of
industrial relations ideas
have been sketched in, we will try to assess how this looks from an industrial
relations standpoint. Finally, we will look at what the most recent industrial
relations research has been contributing in this area, and point to some of
the remaining challenges for research agenda.
No
attempt is made to
develop a discussion
of
policy, which would require a different approach and
a great deal more space.
Before setting out, it is worth while recapping briefly on some
of
the
salient features of the unemployment experience in recent economic
history:
i) male unemployment in Britain has risen from under
3
per cent in the
1970s
to
a comparable figure
of
about 17 per cent in 1983-87,
quadrupling since 1970;
ii) the sharpest rises in male unemployment occurred in 1974-76 and
1979-82: falls have been recorded only in
4
years in the last 20, 1973,
1978,1979 and 1987;
iii) female unemployment has also risen, but it is much more difficult to
provide consistent measures of the changes because
of
women’s
altering entitlement to benefits over the years. For this reason,
economists using econometric techniques have preferred recently to
use male unemployment rates in their equations, though as we shall see
later this may beg some important questions.
iv) although the rise in British unemployment has been shared with
other countries, it is not the case that our unemployment problem
is ‘just’ a reflection of a more general developed world phenom-
enon, as some would argue: on the standardised
OECD
defin-
itions, male unemployment
is
nearly twice as great as in France,
Germany, Italy or the United States, with whom we once
compared very favourably.
the rise in male unemployment has been associated with a massive
increase in long term unemployment (defined for this purpose as being
over one year’s duration).
In more analytical terms, a number of features have become apparent
during this depressing period:
i) unemployment figures, typically expressed as a percentage rate, are by
no means the ‘hard’ statistic they have often been regarded as
portraying: they are subject to considerable measurement problems,
partly because of administrative changes in counting or benefit eligibility
terms, partly because unemployment is a dynamic concept in which
behavioural influences are strong, and different approaches to measure-
ment will pick up different behavioural responses.
As
a result, official
measures
of
unemployment may be widely different from estimates
based on other premises. (For a useful discussion, see Metcalf, 1984.);
v)
To continue reading
Request your trial