4-10-06 - 151 lectures Unions, Collective Bargaining and...

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Unformatted text preview: 151 lectures Unions, Collective Bargaining and Labor Market Impacts Introduction: two general views of unions Conservative: monopoly model. Unions want more for their own members but their gains have to be at the expense of everyone else, including nonunion workers. In this model unions have the same effect as monopolies. Liberal: voice model. Unions provide benefits to all workers, not just to union members, and they can also benefit employers: by giving voice to workers’ issues, thereby increasing efficiency and equality—the “high road.” And by constraining corporate excesses for short-term gains for managers that do not create value for the other stakeholders. In this model, unions can be partners with management on some issues and adversaries on others. The voice model also recognizes that unions are activists for political and social legislation —for democratic voting rights, for social security, healthcare, for civil rights, minimum wages—that create floors for the unorganized poorer groups, and above which unions negotiate. It is not necessary to hold that only one of these views is correct. The can apply in different degrees to different unions, to different bargaining environments and in the context of differing socio-political institutions in different countries. Outline of lectures 1. Institutions: Union structure and membership, international comparisons, legal and institutional context for unionism in the U.S. 2. 3. Models of union behavior: union goals and bargaining models. Reasons for the decline of unionism since the 1980s. 1 4. Economic impacts of unions. Institutions A. Union structure and membership 1. A few historical points: Unions have arisen in every democratic industrialized country. Why? --Early unions in the U.S. were common by the 1790s, earlier in England. They arose in the guilds—which regulated the skilled crafts such as silversmiths, printers, shoemakers, carpenters. --These craft workers were both owners and workers. In pre-industrial times, most workers were self-employed, owning the means of their production and controlling their own tools and workplace practices. --The divorce of capital and labor: now workers are separated from the means of production and have to hire themselves out to an employer. They now have differing interests from the owners, creating a possible conflictual relationship: the pre-condition for unionism. --With industrialization, we see a clearer division between employer and employee, as skilled craft workers lose much of their power and they are replaced with the mass production industrial worker who does only one task – “Taylorism”—not just in factories but also in mines, docks, railroads, mills. Management of work is now in the hands of managers, representatives of the owners, not the workers themselves. --The industrial workers had less individual power because they did not have job-specific skills--but there were great forces bringing them together— similar types of jobs, affected similarly and collectively by pace of work, risks of injuries and fatalities—so we see the development of union solidarity. --So unions develop to redress the imbalance between capital and labor that arose with industrialization. 2 --Unions from the beginning were active politically—for laws to limit the length of the working day, to expand suffrage without property requirements, to legalize collective action itself. --Unions from the beginning were also active in social legislation—to improve economic and social security through unemployment insurance, create public retirement system (Social Security) so that they could raise a family, and to enhance public education and the high school and then the higher education levels. 2. Structure of unions --Types of unions: craft, industrial, public sector versus private sector. --Locals, national and “international” unions— the affiliates. Most are members of a weak federation—the AFL-CIO. Differences still persist among building trades, industrial unions and public sector unions. Also: central labor councils, state labor federations. [See slide of structure and list of the largest unions.] --Union leaders are elected—at every level. This means union behavior should be modeled using median voter models, not the marginal worker. More on this in the next lecture. --Bargaining topics: terms and conditions of work. Pay, benefits, hours, schedules, hiring, job assignment, promotion, overtime, layoffs, grievance and arbitration machinery to resolve disputes, cola’s. [See slide.] 3. Levels of bargaining --Within a firm, bargaining can be local—workplace-based—or national, with a master agreement; can also occur at level of firm’s decisions regarding technological change and even strategic policy—as at Saturn or United, although these are in decline. Examples of national contracts: UAW/GM. Sectoral example—ILWU with Pacific Maritime Association—which is an employer federation, covering the entire West Coast. 3 Multi-employer bargaining: especially common in construction trades. Regional example—grocery workers in Southern CA, have different contract with different terms, expiration dates from Northern CA, although same union and employers. Single-plant company: NUMMI-UAW. Plant-level bargaining is more about job rights, with post and bid systems. J --Job-control unionism: a means to limit arbitrary maangerial discretion. 4. Centralization and coordination among bargaining levels: workplace, company, industry, sector (with pattern bargaining), national. --These involve different degrees of decentralization or centralization. --U.S. bargaining has decentralized in recent decades, is now more decentralized than most other countries, with exception of UK. --Centralized bargaining is highly correlated with lower wage inequality and with pay increases that do not exceed productivity growth. B. 1. 2. International comparisons Differences in density and coverage [Table 13.1] Examples of different legal and institutional structures: Germany and France: unions bargain on behalf of all workers in an industry or broader (metal-working sector), even those in companies that don’t have unions, so much more centralization. Austria: confederations of unions still bargain with federations of employers. This used to be—until the mid 1980s-- the main pattern in many European countries (“corporatism”). 4 Australia: government tribunals set wages and then union bargaining sets supplements. Denmark and Sweden: unions run the UI system, so density is much higher and has been increasing in recent decades. Germany: smaller number of very large unions. Works councils: mandated at every German workplace and includes nonunion workers—elected leaders. So have a dual system with unions more involved in national issues. Japan: unions are company-based, but include both white-collar and bluecollar employees. In European countries they are in different unions, in the U.S. white-collar workers might not be in a union at all. For example, pilots, flight attendants and machinists (maintenance workers) are in different airline unions. This has implications for solidarity and wage differentials. Exclusive representation in the U.S. is unusual. In most countries multiple unions co-exist and can compete for the same workers in the same workplace. C. 1. Legal and institutional context for unionism in the U.S. The Rise of the New Deal System 1930 - WWII --NLRA 1935. Gave workers the right to organize without employer interference. Defined a specific set of unfair labor practices for employers— such as firing or threatening to fire a worker who supported having a union, discriminating against an employee who filed a grievance or unfair labor practice charge, or even asking prospective employees about their attitudes toward unions.. --The NLRA also established the NLRB—an independent agency-- to administer the law and in subsequent decades numerous court decisions elaborated it further. NLRB set up election procedure with secret ballots. 5 Once a union is recognized as the bargaining agent, NLRA also mandated “a duty to bargain” to get to a first contract, and subsequent contracts. But whether there is a contract agreement is a matter between the two parties. --The 1930s and early 1940s as the period of the rise of the CIO—industrial workers in manufacturing-- challenge to the AFL, with mass strikes and organizing. From 1930 to 1955 manufacturing employment grew 77 percent. --WW II—the War Labor Board sets up industrial dispute resolution machinery—mediation and arbitration to reduce strikes. Unions gain the dues check-off in return for agreeing not to strike during the term of a contract. 2. The New Deal System in Operation: 1946- 1980 --Right after the war, the emergence of a pattern of productivity bargaining—wages in line with productivity growth with employers given more workforce stability and “right to manage.” --Large industrial companies learn to live with mass unionism. [see slides on union membership]. Politically, attempts to form a labor-type party fail in 1948 keeping unions in the Democratic Party. Unionism limited in the South with the defeat of Operation Dixie organizing drive in 1948. --Postwar amendments to the NLRA: Taft-Hartley 1947. --Defined unfair practices for unions—such as secondary boycotts. --Allowed states to choose to prohibit “union shop” contracts (worker has to join the union within 30 days of being hired). This sets up the free rider problem for collective action and makes organizing much more difficult. There are 21 states with these “Right to Work” laws—mostly in the South. --T-H also set up procedures for workers to vote a union out—the decertification election. 6 --And T-H set up a mechanism for the president to declare a strike is a “national emergency “and to obtain injunctions to force workers back to work for 80 days, taking away a lot of their bargaining power.. Landrum-Griffin 1959. Regulated union finances and elections to limit corruption and racketeering, which had been uncovered especially in the Teamsters. --Merger of AFL and CIO in 1955. --Rise of public sector unionism: 1962 for federal workers and then through 1970s for state and local workers. 3. The decline of the New Deal system 1980 – present. --Signaled by change in attitudes of large businesses in late 1970s, then by permanent replacement of strikers in early 1980s as well as large declines in manufacturing employment. I will address the causes of union decline in lectures next week. Next topic: Given this institutional and legal structure, what do unions do? What do they seek to maximize? Wage rates, jobs, membership, dues? Alternative models of union behavior. 7 ...
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This note was uploaded on 06/06/2010 for the course ECON 151 taught by Professor Staff during the Spring '08 term at University of California, Berkeley.

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