The Role of Collective Bargaining in the Global Economy: Negotiating for Social Justice

By Bosch, Gerhard | International Labour Review, June 2012 | Go to article overview

The Role of Collective Bargaining in the Global Economy: Negotiating for Social Justice


Bosch, Gerhard, International Labour Review


The role of collective bargaining in the global economy: Negotiating for social justice. Edited by Susan HAYTER. Cheltenham, Edward Elgar. x + 327 pp. ISBN 978-92-2-124099-0.

The role of collective bargaining is rapidly changing across the world, and in a great variety of ways. In many (but not all) developed countries collective bargaining coverage is declining. In many (but not all) new democracies the role of collective bargaining in regulating working conditions is increasing. Globalization is one of the drivers of change. Because of capital's greater ease of movement, workers' bargaining power has been weakened. Moreover, there is growing concern among policy-makers that, now that companies have the flexibility they need to survive in global competition, they often withdraw their political support for collective bargaining, especially for multi-employer collective bargaining. In some countries, however, the scope of collective bargaining has been extended. Flexible working hours, training or participation in workplace restructuring are proactively negotiated by the social partners. Indeed, in such cases collective bargaining proves to be the driving force behind the introduction of new forms of flexible production, often throughout an industry or even the whole economy. For employers the transaction costs of such negotiated flexibility may be much lower than the transaction costs of introducing new forms of flexible work, firm by firm, in the face of employee scepticism or even resistance.

These new global challenges and the diversity of reactions among countries are a good opportunity to take stock of these developments and to reassess our theories on collective bargaining. To do so, one must overcome the traditional Euro-, Australo- or North American-centric perspective which still dominates textbooks on industrial relations. Susan Hayter has tried to overcome this bias by inviting contributions from excellent scholars in different disciplines and countries. She refers to data limitations in the less developed countries and the consequent surviving bias towards developed countries. Her edited volume contains a rich collection of country studies on Chile, China and Germany; comparative thematic chapters on the impact of collective bargaining on the distribution of wages and working hours, on training, and on productivity and economic efficiency; as well as chapters on the role of international framework agreements and the possible role of unions following the implosion of Wall Street capitalism.

In her introduction, Susan Hayter summarizes the contrasting views on the value of collectively agreed labour standards. Collective bargaining emerged as a way of balancing otherwise unequal bargaining power in employment relations and of protecting workers from some of the adverse effects of competition by establishing standards for wages and working conditions. Mainstream economists now see these standards as barriers to flexibility which serve to protect the privileges of insiders and to harm the employment prospects of most workers. They therefore demand that priority be given to individual over collective rights. This monopoly face is recognized by other scholars who emphasize that unions have another face: workers' participation through the collective voice of unions and through collective bargaining can help to improve both efficiency and equity. However, the practical question remains of which side of collective bargaining is the dominant one. Institutional theory also points out that outcomes are contextually specific since collective bargaining is embedded in different institutional settings.

All the chapters in the book address the basic argument over collective bargaining, namely, whether there really are trade-offs between equity and efficiency, and between flexibility and security. All the authors attempt to overcome a simplistic rigidity/flexibility dichotomy and to understand the linkages with other institutions.

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