Trade Union Action and Privatisation in Western Europe: Recent Dilemmas*

Abstract. The Author examines the policies of privatisation in Western Europe and the responses made by trade unions. Privatisation seems to induce the trade union movement to shift its emphasis from traditional issues toward new and challenging ones, such as a major co-operation in the management of the privatised companies. Therein, the extension of interest and control by the unions into new areas such as investment, planning, work organisation and design constitute a challenge to trade union core mandate. In some union circles there are fears about unions embracing what appear to be managerial strategies in a period of deep transformation and turbulence. Moreover, according to some union leaders any attempt by the unions to go beyond the “oppositional and defensive role” would result in a confusion and misrepresentation of their members' interests.     

Trade Union Preferences in Double Dividend Models

This paper analyses wage formation in a unionized economy where consumers as an externality in their utility function have the level of local pollution. If modelled in a microeconomically consistent way this externality should also be present in the preferences of the trade union. The key result is that when this trade‐off between pollution and employment is included in the trade unions’ preferences then they are willing to lower wages to generate substitution towards higher employment and lower pollution. As a consequence, an increase in the pollution tax will lead to lower wages. At a more general level the results show that in models analyzing pollution issues, such as the double dividend literature, it is very important for the policy conclusions how trade unions are introduced.     

Discrimination and Resistance to Low‐skilled Immigration

Abstract. This paper shows that the immigration of some low‐skilled workers can be of advantage for low‐skilled natives when the host economy suffers from unemployment due to the presence of trade unions and an unemployment insurance scheme. This benefit arises if trade unions have appropriate bargaining power and preferences for members’ income, labor market discrimination against immigrants is strong enough and the unemployment tax rate is low.     

Is Wage Leadership an Instrument to Coordinate Unions’ Wage Policy?The Case of Imperfect Product Markets

Given an oligopolistic product market, trade unions organized at firm level want to coordinate their bargaining activities. If for some exogenous reasons centralization is not possible, unions could try to coordinate wage setting by wage leadership. The outcome of such wage leadership is compared with that of an uncoordinated bargaining and is characterized by higher utilities for all unions. But wages and employment levels are not symmetrical either for unions or for firms. The leader firm employment decreases and the follower firm employment rises compared with uncoordinated bargaining. This may cause problems with the implementation of wage leadership.     

When Decentralized Trade Unions are Better for their Members than Centralized Ones

ABSTRACT: The aim of this paper is to localize situations where decentralized trade unions are better for their members than centralized ones. This phenomenon does not appear inside the internal game between oligopolistic firms and between firms and trade unions. It appears only when we introduce feed-back effects from an external game between these oligopolistic firms and a foreign public supplier, in a foreign country where these firms export and sell the goods they produce. The proof of theorems 1. 2, 3 and 4, and of Corollary 4, can be found in the mathematical appendix, available on request from the author. Write to Professor Antoine Soubeyran, Clos Saint Louis, Chemin des Lauves, Aix en Provence, 13100 France.     

The Political System as a Problem for the Trade Unions in Italy: 1975-1983

ABSTRACT: This article focuses on a particular aspect of the evolution of the Italian trade unions, that is the problems faced by them in dealing with the political institutions and structures, or, in other words, the political system. We consider this period from the mid‘70s to the early 80s, because it represents the culmination of a gradual development in both unions and institutions during the previous years, and the resulting problems that evolved in the interaction between them and the political institutions. We look at how the unions’political action was modified during this lapse of time, and draw some conclusions about the unions resulting political role.     

Constants and Variants in Political Exchange

ABSTRACT: The purpose of this article is to offer some clarification on developments in a number of European countries in the postwar period. The crux of the analysis are the relations between the huge, functional interest-group organizations and the political system and government, and in particular the trade unions. The intent is firstly to overcome the uncertain and often indistinct use of the concepts of political exchange and corporatism, then to offer an explanatory framework in which these modes, which have prevailed in Capitalist countries, can be grouped under the model of political exchange, in so much as the trade unions’representation of interest groups is affected by the factors and political advantages at stake. It then clariries the essential connotations of this model, which can be considered as constants compared to the variants within it, and also deals with the two types of political exchange predominant in the period and countries surveyed, namely pluralist and cor-poratist variants. Finally the author stresses the need for empirical studies in postwar Europe, to check the acceptability and realism of the model used and test the validity of the theses here outlined, that is, that there are several variants — or strategies — of political exchange between trade unions and the governments and political system.     

Self‐financing Unemployment Insurance and Bargaining Structure

Abstract. This study examines how the size of trade unions relative to the labor force impacts on the desirability of different organizational forms of self‐financing unemployment insurance (UI). For this purpose, we compare the outcome of a model with a uniform payroll tax to a model where workers pay taxes according to their systematic risk of unemployment. Our results highlight the importance of the bargaining structure for the assessment of a particular UI scheme. Most importantly, it depends on the relative size of the unions whether efficiency favors a uniform or a differentiated UI scheme.     

Building Blocks for a Precautionary Approach to the Use of Nanomaterials: Positions Taken by Trade Unions and Environmental NGOs in the European Nanotechnologies Debate

As partners in the European capacity‐building project NanoCap, trade unions and environmental nongovernmental organizations (NGOs) have established positions on the development of nanotechnologies. Key in their positioning is their view that the use of nanomaterials with currently unknown occupational and environmental hazards must have consequences for the risk management and use of nanoproducts. They have made proposals for responsible manufacturing and for applying the precautionary principle to the use of nanoproducts and they urgently call for the acceptance and the operationalization of a precautionary approach by the industry and governments. The trade unions and NGOs are calling for transparency and openness regarding processes and products that contain nanomaterials and have proposed specific tools for nanomaterial use that put the precautionary principle into practice, including the principles no data → no exposure and no data → no emission. The proposed tools also include compulsory reporting of the type and content of nanoparticles applied in products, a register of workers possibly exposed to nanoparticles, and the use of nano reference values as guides to assess workplace exposure to nanoparticles.     

The role of trade unions in strategic planning

The changing climate of industrial relations has created a more puralist and complex state of relationships within the industrial sector of the economy. Trade unions and their employees are demanding and achieving a greater degree of participation in both the long and short term issues which affect company decisions in terms of either resource allocation or general policy. This article examines the role of trade unions within the context of strategic planning and argues that their increasing involvement is inevitable and their role should therefore be effectively recognized and their contribution to the development of corporate strategy ensured.     

Quality circles—Are they working in British factories?

A survey of Quality Circle programmes in British manufacturing companies reveals that Circles introduced and used properly with full management and trade union support can and do work and have many benefits. The findings suggest that current management attitudes and actions are more detrimental to the establishment and success of a circle programme than that of the trade unions. Based on the findings, indications are made of the factors which will assist companies who are considering the introduction of a Quality Circle programme and also help those companies currently using Circles to make and keep them effective.     

Prospects for industrial co-operatives—An alternative to industrial democracy?

There is a growing interest in industrial co-operatives, although the idea itself is by no means a modern one, having long been regarded as the ideal of a socialist system. There are comparatively few worker co-operatives in the United Kingdom, but rather more of them on the Continent. The article examines the reasons for this and the problems facing co-operatives —particularly in relation to the law, taxation and the trade unions.     

Measures of Industrial Protectionism: Relevance for Trade and Labour Policies

ABSTRACT: Protectionist policies are often supported by an ‘unholy‘ alliance of industrial lobbies and labour unions, under the assumption that trade barriers will favour higher profits, wage rates and employment. Even when one takes the narrow view of self-interest in a single producing sector, however, things are not necessarily what they seem and protectionism may have more profound consequences than those expected by lobbyists and negotiators. The paper reviews the methodologies developed to measure the extent and the consequences of industrial protectionism in order to derive operational guidelines to evaluate alternative trade policies.     

The Contribution of Work Representation to Solving the Governance Structure Problem

The aim of this paper is to explain in what ways work representation may contribute to an efficient governance structure. The insights from institutional economic theories will be applied to two different kinds of employee participation, namely trade unions and works councils. From the discussion it follows that the latter may be better equipped than the former to play an effective role in corporate decision-making, owing to its specific institutionalisation. The paper concludes with the finding that works councils could fulfil an important economic function, by protecting the interests of the employees as well as those of the shareholders.Several agency problems can be solved. By giving the workers consultation and codetermination rights, this will reduce their dependence on unilateral decisions by the management and may stimulate them to be more cooperative, leading to greater productivity and less monitoring costs. By giving the workers information rights, the management becomes more disciplined as well. Because contrary to trade unions the works councils usually do not determine the terms of employment, the owners of the firm do not need to fear that the employees will be able to extract a portion of the firm's profits.     

Strengthening the technological capabilities of domestic industries: Pressures,deterrents and policy alternatives

After calling attention to some misleading conceptions of the industrial sectors facing increasing challenges from abroad, the analysis highlights the primary sources of recent shortcomings in the competitiveness of major industries in the US and in some other long industrialized economies. Suggestions are then offered concerning potential corrective policies available to national governments, to managements, to trade unions and to universities as well. Finally, the need for long term perspectives in formulating and implementing such constructive programs is emphasized along with the need to integrate them with other major programs for promoting the national welfare.     

Delegation and Wage Determination in Trade Unions

Delegation of wage determination is modelled as the transferral of decision‐making rights to better‐informed agents. The rank and file of trade unions has less information and can, therefore, benefit from delegation. However, delegation might be disadvantageous for union members, since delegates pursue their own objectives. Also, delegates might incur a utility reduction, since becoming a delegate implies forfeiting a better‐paid outside option. We investigate under what conditions delegation of wage bargaining power is beneficial for union members and their potential leaders. The wage and employment effects of delegation are derived.     

Determinants of Union Membership: A Review

The recent drastic decline in trade union membership levels in most Western countries has led to renewed interest in the factors which influence the decision of employees to join unions. This paper discusses the strengths and weaknesses of the three main approaches: structural determinism, individual-level analysis, and conceptual models of trade union joining behaviour. Structural determinism is discussed in the context of the Bainian model and its various extensions. In contrast, the diverse findings in the field of individual-union joining behaviour is assessed by drawing on a comprehensive table comprising all variables examined in this area. The first two sections focus exclusively on trade union joining behaviour as the independent variable whereas the third part of the paper uses an individuals' voting behaviour in the USA. This focus was necessary due to the lack of causal models using union joining behaviour as their dependent variable. The author selects two of the most advanced models for a detailed analysis, and relates the findings to the preceding sections. It is the objective of the paper to critically evaluate the three approaches and their contributions towards understanding this complex field of research.     

The Inadequacy of Mainstream Theories ofTrade Union Behaviour

This paper identifies four criteria used by mainstream economists of trade unions to judge the adequacy of their various theories. Three of them, however, are hardly ever satisfied. The root cause of this failure is the method adopted by mainstream economic theory, namely deductivism. The perspective of critical realism is used to identify and explain the cause of this failure and to point towards an alternative method.     

Unions and the Welfare Impact of Foreign Direct Investment — A Wisdom Extension

Abstract. This paper extends the recent literature, e.g. Leahy and Montagna (Economic Journal 110: 80–92, 2000), in relation to the link between unionization, inward foreign direct investment (FDI) and country welfare in an oligopoly market structure. It is shown that the common results, that unions may reduce welfare under FDI while multinational enterprises (MNEs) will strictly trade off union wages at each location, are generally driven by the assumption relating to the scope of the bargaining with the union, namely the ‘right to manage’ (RTM). In particular, our extension to efficient bargaining (EB) demonstrates that union power may increase welfare in the presence of FDI, while the MNEs’ choice between FDI and exports will include profit‐sharing arbitrage with unions, in addition to the usual wage comparison considerations.     

Trade Union Priorities and Wage Rigidity

ABSTRACT: The starting point of the paper is that trade unions engage in substitution once certain targets have been met. This implies that a priority-based or hierarchical model might be a better approximation to union behaviour. This model requires a two-part union utility function which changes when a satisfactory (or target) level of the priority variable (e.g. the wage rate) is met. After demonstrating the workings of such a model in a monopoly union framework, it is shown that there is real wage rigidity when the wage is below the target level. Employment increases only when the target wage has been achieved.