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The Latin Model of Compensation: Pay and Benefits Systems in Spain, Italy and France

By Moran, Laura; Ragatz, Nora Wilmot et al. | Journal of Comparative International Management, December 2001 | Go to article overview

The Latin Model of Compensation: Pay and Benefits Systems in Spain, Italy and France


Moran, Laura, Ragatz, Nora Wilmot, Scoville, James G., Journal of Comparative International Management


This study begins with a brief discussion of influences shaping the development of industrial relations systems in France, Italy and Spain in the light of labor movement models proposed by Sturmthal and Scoville and by Lipset. It then turns to the early development of the complex systems of compensation found there, as well as implications for the generality of the Dun lop-Rothbaum hypothesis. Against this backdrop, it proceeds to a detailed discussion of compensation systems in the three countries.

INTRODUCTION

Francois Sellier, speaking to the faculty and students at Illinois a number of years ago, outlined the principal facets of a European "Latin Model of Industrial Relations" to be observed in France, Italy and Spain. This model featured (at least historically in the case of Spain) an ideologically fissured labor movement characterized by competing labor parties each with a companion union federation and constituent unions, weak institutions of collective bargaining, and considerable state involvement in the determination of economic outcomes. In addition, Italy and Spain were laggards in the process of economic growth which transformed Western Europe after the year 1800, while France remained more heavily rural than other early developers.

The process of evolution of the labor movements in the three countries can be examined through the lens of two closely related modelings: that of Sturmthal and Scoville (1973) and the later formulation by Lipset (1983-5). Sturmthal and Scoville would stress the political and social disabilities which faced the working classes and the labor movements, especially in Spain and Italy, and the consequent need for the pursuit of political means to achieve political objectives, as shaping the goals and functions of these movements. At the same time, loose labor markets meant that economic objectives could rarely be achieved by economic actions (like collective bargaining), thus discouraging its development. If we accept Sellier's evidence (1973) of tight labor markets in France, we may have a case of "French exceptionalism," where bargaining institutions did not develop for the simple reason that the French state was so responsive to workers' political action that this turned out to be the more productive route for labor to pursue. It is possible that the early tradition in France of state intervention in labor problems (exemplified by the creation of conseils de prud'hommes in 1806) may be a model for the other Latin countries in some kind of spillover effect.

The Lipset view deals with much the same variables in a different way. Lipset speaks of the attainment of "political citizenship" -- and "economic citizenship" -- but with much less direct focus on how these two are achieved. A Lipsetian view of the three countries would see the French working class having achieved political citizenship early through the Revolution, but only firmed up in the 1870s with growth of public, secular education. In Italy and Spain, both political citizenship and economic citizenship came very late.

HISTORICAL ORIGINS

Interventionism in historical perspective

In the saga of uneven industrial development in Western Europe, a few numbers will help us place the Latin countries relative to others in the parade across the historical stage. Table I draws on Martin (1990) and Neufeld (1961) to show the positions of the Latin Three and the Industrial Big Two around 1910 and 1920. Table 2 shows similar figures assembled from various sources by Clark (1960), but for a longer period of time. Both tables reveal the extent of Latin lateness in the development procession.

In addition, we note that Rostow sets forth "tentative approximate take-off dates" which confirm the employment distributions of Tables 1 and 2. Although France (1830-1860) is second only to Britain (17831802) in its take-off, neither of the other Latin countries makes the list (Rostow, 1960:38).

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