Oligopolistic suppliers,symbiotic value chains and workers' bargaining power: labour contestation in South China at an ascendant global footwear firm

In this article, I analyse changes in the power relationship between lead firms, manufacturers and workers by examining a strike that took place in South China in 2014 among workers at the Taiwanese footwear giant, Yue Yuen. In the process, I demonstrate that there is a link between increased labour costs, capital consolidation and greater value capture at the bottom of the global supply chain. I argue that footwear value chains are seeing a falling level of monopsony power and the emergence of enormous oligopolistic suppliers, which are transforming the power imbalances of global supply chains towards a more mutually dependent ‘buyer–producer symbiosis’. The Yue Yuen strike shows a maturing industrial working class, facing pressures on social reproduction in China, adapting its bargaining strategies vis‐à‐vis the developmental state. Influxes of profit raise the ceiling for what can be demanded of employers, stimulating those same employers to pursue more aggressive means of holding onto their profits. The example of the Yue Yuen strike is an indicator of what are fundamental changes in the production process, dynamics within the value chain, and power and agency of workers in labour‐intensive production. The strike demonstrates that consolidation is playing a decisive role in shaping the power relationship between domestic manufacturers and transnational brands, which, in turn, is directly affecting the bargaining power of workers.     

The Effects of Labor Unions on Workplace Performance: New Evidence from France

How do unionization and collective bargaining affect firm profitability? In this paper, we revisit this question using a nationally representative sample of French establishments. In addition to examining union/non-union differences in profitability, we explore the possible sources from which unions capture profits. The results indicate that unionization in France is associated with poorer financial performance in the workplace. The results also indicate that concentration-related profits do not provide an important source of union rents in France. Finally, this study provides strong support for the hypothesis of union appropriation of the returns from long-lived physical capital.     

Power,governance and distributional skew in global value chains: Exchange theoretic and exogenous factors

The relationship between power, governance and value creation/capture is a central concern in global value chain (GVC) research. In the context of calls to develop a more expansive view of power in GVCs, we argue for retaining a focus on bargaining power, but shifting the conceptualization of bargaining power from the dyad to the network. We advance two arguments. First, we elaborate an exchange theoretic model in which skew of value capture is a function of the degree of power asymmetry inherent in the ratio of buyers to suppliers. Second, we explain how this model can be expanded to consider the role of external factors, such as the institutional and normative contexts in which exchange occurs. Rather than see these factors as contending forms of power, we treat them as forces that can affect value skew by either attenuating the bargaining power of lead firms or by moderating the distributional effects of power asymmetries between exchange partners. We conclude that an exchange theoretic approach to bargaining power in GVCs provides a parsimonious framework for explaining how inter-firm governance shapes the distribution of value capture in global production.     

Union wages, rents, and skills in health care labor markets

We examine the effect of unions on the earnings of health care workers, with emphasis on the measurement and sources of union wage premiums. Using data constructed from the 1973 though 1994 Current Population Surveys, standard union premium estimates are found to be substantially lower among workers in health care than in other sectors of the economy, and to be smaller among higher skill than among lower skill occupational groups. Longitudinal analysis of workers switching union status, which controls for worker-specific skills, indicates a small impact of unions on earnings within both high and low skilled health care occupations. Evidence is found for small, but significant, union threat effects in health care labor markets. It has been argued that recent legal changes in bargaining unit determination should enhance union organizing and bargaining power. Although we cannot rule this out, such effects are not readily apparent in our data. The authors appreciate the assistance of David Macpherson, who helped develop the CPS data files used in the paper.     

Bargaining over a finite set of alternatives

We analyze bilateral bargaining over a finite set of alternatives. We look for "good" ordinal solutions to such problems and show that Unanimity Compromise and Rational Compromise are the only bargaining rules that satisfy a basic set of properties. We then extend our analysis to admit problems with countably infinite alternatives. We show that, on this class, no bargaining rule choosing finite subsets of alternatives can be neutral. When rephrased in the utility framework of Nash (1950), this implies that there is no ordinal bargaining rule that is finite-valued. Professor Sertel passed away on January 25, 2003.     

Tax reform and endogenous gender bargaining power

The conventional studies with unitary representation of the household have been seeking for the condition in which tax systems achieve improvements of both fertility and female labor supply. Such analyses may not be enough to capture the important aspects of family behaviors since their common-preference assumption is frequently inconsistent with observed economies. By making use of a family bargaining framework, we argue that the heterogeneity in parental preferences among household members influences the result of existing studies on tax systems. Our results show that when women prefer larger family size than men, the tax reform towards individual taxation raises the fertility rate even more. In this case, female labor supply can be still increased in spite of enhanced fertility due to bargaining allocation.     

Dividing Justly in Bargaining Problems with Claims

Theoretical research on claims problems has concentrated on normative properties and axiomatizations of solution concepts. We complement these analyses by empirical evidence on the predictability of three classical solution concepts in a bankruptcy problem. We examine both people’s impartial normative evaluations as well as their actual negotiation behavior in a bargaining with claims environment. We measure people’s judgments on the normative attractiveness of solution concepts with the help of a survey and also observe actual agreements in a bargaining experiment with real money at stake. We find that the proportional solution is the normatively most attractive rule, whereas actual negotiation agreements are closest to the ‘constrained equal-award’ solution.     

Pretrial negotiation, litigation, and procedural rules

We model the civil dispute resolution process as a two-stage game with the parties bargaining to reach a settlement in the first stage and then playing a litigation expenditure game at trial in the second stage. We find that the English rule shifts the settlement away from the interim fair and unbiased settlement in most circumstances. Overall welfare changes are in favor of the party who makes the offer in the pretrial negotiation stage. Lawyers however, always benefit from the English rule, because fee shifting increases the stake of the trial and thus intensifies the use of the legal service.     

Multilateral bargaining with subjective claims under majority vs. unanimity rule: An experiment

We experimentally investigate the effects of subjective claims in a multilateral bargaining game. Claims are induced by having subjects ‘produce’ the surplus to be divided by earning points in a quiz task. We use a Baron–Ferejohn framework. Our main treatment variable is the majority required to pass a proposal. Under unanimity rule, all proposals and agreements constitute convex combinations of the equal split and a division that is proportional to points earned in the productive task. Contrary to our predictions, this pattern largely persists under majority rule. In sharp contrast to prior experiments in which an exogenous surplus is divided using majority rule, few subjects attempt to build minimum winning coalitions in the presence of claims from production.     

DYNAMIC COMMON AGENCY AND INVESTMENT: THE ECONOMICS OF MOVIE DISTRIBUTION

This article analyzes investment and other strategies in a stationary dynamic common agency model of movie distribution. Contract choices interact with other strategic choices. The model explains several facts; movie distributors avoid head-to-head new hit releases, hits have longer runs than flops, and distributors receive the lion's share of value generated by hits. The model yields testable implications about the effects of vertical integration on inventory turnover, release decisions, run lengths, and allocations, but the results depend on how integration affects relative bargaining power. Vertical integration is privately profitable and may improve social welfare even though it reduces industry profits. (JEL L14 , L22 , L82 , C61 )     

Fair and efficient division through unanimity bargaining when claims are subjective

In a subjective claims problem several partners have conflicting perceptions on how a jointly produced surplus should be divided fairly amongst them. In a large-scale experiment, we compare the fairness and efficiency of three unanimity bargaining procedures used to reach a consensus in a three-partner subjective claims problem. Under each procedure partners move sequentially, making alternating proposals. The procedures differ in whether they ask for a complete division proposal (Offer and Exit rule) or only for a proposal regarding the partner’s own fair share (Demand rule); and in whether partners have to accept the entire division proposal (Offer and Demand rule) or only their own share (Exit rule). For the fairness assessment partial and impartial fairness views are used and we find that the Offer rule performs best in terms of allocative fairness and no worse in terms of efficiency.     

THE NEAR OPTIMALITY OF MARK-UP PRICING

Mark-up pricing policies result in a loss of profits compared to marginal pricing behavior. These losses, however, are often very small, even for large changes in the money supply. But by adopting a simple pricing rule the firm does not have to forecast the future, and avoids the informational and computational costs required to determine the profit maximizing price each period. Thus, even if these costs are small, mark-up pricing policies may be optimal, or approximately so, at least for some firms. In a macro model this is likely to imply large monetary non-neutralities.     

ADVANCE PRODUCTION,INVENTORIES, AND MARKET POWER: AN EXPERIMENTAL INVESTIGATION

We report an experiment that assesses the effects of alterations in production conditions and product durability on market power in Bertrand‐Edgeworth duopolies. Static equilibrium analysis predicts that advance (rather than “to demand”) production raises prices, but does not affect profits. The further addition of a simple inventory option causes prices to fall and seller earnings to increase. Contrary to these predictions, we observe similar prices in baseline and advance production treatments, but lower profits given advance production. An inventory option reduces both prices and earnings. Results are driven by the treatments' effects on sellers' capacities to tacitly collude. (JEL C9, D4, L4)     

Equality Bargaining: Where,Who, Why?

It is common to identify a role for trade unions in combating sex inequality at work through collective bargaining. This article uses a survey of paid union officers to identify the context in which equality bargaining by unions is likely to occur, using the specific issue of bargaining on equal pay. It concludes that equality bargaining is a function of women’s voice within unions, the characteristics and preferences of bargainers themselves and of a favourable public policy environment. Bargaining on equal pay is also more likely in centralized negotiations that cover multiple employers.     

Comparing Public and Private Sector Decision-Making Practices

Public and private sector decision making is studied with anexperiment. The study compares decision making in a tax-supportedgeneral purpose governmental agency with that done by a businessfirm selling to a market, using a simulation to capture differencesin the preferences and practices of mid-level managers workingin the two sectors. The simulation calls for participating managersto assess the risk and prospect of adopting budgets tailoredto match each sector. A cognitive culture that stresses analysis,speculation, bargaining, or networking is employed to fashiona budget appropriate for a public and a private sector organization,each with a controversial and a noncontroversial budget amount.The literature on public/private differences was consulted tomake predictions, suggesting that public sector managers wouldfavor bargaining and networking and private sector managerswould favor analysis and speculation. The cognitive style literaturesuggests that managers favor budgets constructed with an approachthat is consistent with their preferred cognitive style andsee less risk in the choice, except in a public setting whererisk would be unaffected. The study finds that private sectormanagers are more apt to support budget decisions made withanalysis and less likely to support them when bargaining isapplied. Public sector managers are less likely to support budgetdecisions backed by analysis and more likely to support thosethat are derived from bargaining with agency people.     

THE IMPACT OF SKILL ON UNION MEMBERSHIP:

A worker's occupation and industry position in the economy primarily determine gender differences in union membership. However, the data reveal that these economic structural factors are not alone responsible. A specific strategy for rethinking the problem examines bargaining power; skill has been identified as a central factor in worker power. Feminists maintain that gender mediates manual skill's effect on union membership. Logistic regression techniques that test for gender interaction effects support the feminist perspective. Manual skill produces lower rates of union membership for women than men with comparable skills.     

QUALITY OF AVAILABLE MATES,EDUCATION, AND HOUSEHOLD LABOR SUPPLY

We investigate the impact of sex ratios by education and metropolitan area on spouses’ bargaining power and labor supplies, to capture the local and qualitative nature of mate availability. Using Current Population Survey and Census data for 2000, 1990, and 1980, we estimate these effects in a collective household framework. We find that a higher relative shortage of comparably educated women in the couple’s metropolitan area reduces wives’ labor supply and increases their husbands’. The impact is stronger for couples in higher education groups but not significant for high school graduates. Results are similar across decades. No such effects are found for unmarried individuals. (JEL D1, J22)     

Exclusive representation and american industrial democracy: An historical reappraisal

Exclusive representation in the public sector has been defended on the basis of private sector experience, which purportedly demonstrates that stable, orderly, peaceful collective bargaining is otherwise impossible or impracticable. Nevertheless, nonexclusive collective bargaining was the norm in most industrial nations when the Wagner Act was passed in the 1930s, and it still is the rule outside the U.S. Historical evidence is presented for the thesis that exclusivity was adopted in the private sector primarily in order to pave the way for a corporative state. Peaceful, orderly collective bargaining by “responsible” unions in a competitive economy was a minor, secondary consideration. Editor’s Note: This Symposium was jointly sponsored by theJournal of Labor Research and the National Institute for Labor Relations Research and was held February 10, 1984 at the Westpark Hotel, Rosslyn, Virginia.     

FORWARD GUIDANCE AND THE STATE OF THE ECONOMY

This paper analyzes forward guidance in a nonlinear model with a zero lower bound (ZLB) on the nominal interest rate. Forward guidance is modeled with news shocks to the monetary policy rule, which capture innovations in expectations from central bank communication about future policy rates. Whereas most studies use quasi‐linear models that disregard the expectational effects of hitting the ZLB, we show how the effectiveness of forward guidance nonlinearly depends on the state of the economy, the speed of the recovery, the degree of uncertainty, the policy shock size, and the forward guidance horizon when households account for the ZLB. (JEL E43, E58, E61)