What Has Happened to the Workers Bargaining Power? Lucio Baccaro - - PowerPoint PPT Presentation

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What Has Happened to the Workers Bargaining Power? Lucio Baccaro University of Geneva Department of Sociology Sept. 1, 2009 Focus on Workers Protective Institutions Union Density Collective bargaining coverage Collective

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SLIDE 1

What Has Happened to the Workers’ Bargaining Power?

Lucio Baccaro University of Geneva Department of Sociology

  • Sept. 1, 2009
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SLIDE 2

Focus on Workers’ Protective Institutions

  • Union Density
  • Collective bargaining coverage
  • Collective bargaining structure
  • Participation in Public Policy-

Making/Tripartism

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SLIDE 3

Union Density and Inequality (Between)

Argentina Australia Austria Belgium Brazil Canada Chile China Costa Rica Czech Republic Denmark Dominican Republic El Salvador Estonia Finland France Germany Greece Honduras Hong Kong SAR Hungary India Ireland Italy Jamaica Japan Korea Latvia Lithuania Mexico Netherlands New Zealand Norway Pakistan Paraguay Peru Philippines Poland Portugal Singapore Slovak Republic Slovenia Spain Sweden Switzerland Taiwan Province of China Turkey United Kingdom United States Uruguay Venezuela

Log Gini (country average) Union Density (country average) m_ln_gini_ipo Fitted values

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SLIDE 4

C.B. Structure and Inequality (Between)

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Uruguay Uruguay Uruguay Venezuela Venezuela Venezuela Venezuela Venezuela Venezuela Venezuela Venezuela Venezuela Venezuela Venezuela Venezuela Venezuela Venezuela Venezuela Venezuela Venezuela

Log Gini (country average) Collective Bargaining Structure Index (country average) m_ln_gini_ipo Fitted values

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A Puzzle

  • Labor’s protective institutions are robustly

associated with cross-sectional differences in income inequality

  • When it comes to within-country

differences there seems to be no association

  • Hypothesis: Labor institutions have begun

to operate in a rather different way in the era of globalization

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Mean Yearly Union Density in 16 OECD countries

35 40 45 50 1970 1980 1990 2000 2010 year yearly mean union density Fitted values

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SLIDE 7

Union Density Change Last/First Singapore 0.08 2005/1989 Paraguay 0.06 2004/1994 China 0.04 2005/1989 Hong Kong 0.04 1999/1989 Spain 0.04 2005/1989 India 0.03 2002/1991 Brazil 0.01 2005/1991 Finland 0.00 2005/1989 Belgium 0.00 2005/1989 Pakistan 0.00 2005/1989 Chile

  • 0.01

2005/1989 Jamaica

  • 0.01

2005/1991 Turkey

  • 0.01

1999/1989 Taiwan

  • 0.02

2005/1989 Netherlands

  • 0.02

2005/1989 France

  • 0.02

2005/1989 Norway

  • 0.03

2005/1989 Philippines

  • 0.03

1998/1989 Canada

  • 0.03

2005/1989 Denmark

  • 0.04

2005/1989 United States

  • 0.04

2005/1989 Argentina

  • 0.04

2005/1989 Dominican Republic

  • 0.04

2005/1990 El Salvador

  • 0.04

2005/1990 Switzerland

  • 0.05

2005/1989 Italy

  • 0.05

2005/1989 Mexico

  • 0.05

2002/1989 Sweden

  • 0.07

2005/1989 Japan

  • 0.07

2005/1989 Costa Rica

  • 0.08

2003/1993 Korea

  • 0.08

2003/1989 Uruguay

  • 0.08

2005/1990 Germany

  • 0.11

2005/1989 United Kingdom

  • 0.12

2005/1989 Honduras

  • 0.13

2001/1990 Greece

  • 0.14

2005/1989 Austria

  • 0.15

2005/1989 Australia

  • 0.17

2005/1989 Venezuela

  • 0.19

2005/1989 Portugal

  • 0.20

2005/1989 Ireland

  • 0.22

2005/1989 Peru

  • 0.31

2005/1989 New Zealand

  • 0.32

2005/1989 Slovenia

  • 0.32

2005/1989 Poland

  • 0.42

2005/1990 Slovak Republic

  • 0.53

2005/1990 Hungary

  • 0.54

2005/1989 Latvia

  • 0.61

2005/1991 Czech Republic

  • 0.62

2005/1990 Lithuania

  • 0.82

2005/1989 Estonia

  • 0.83

2005/1989

Change in Union Density Rates

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SLIDE 8

Mean Yearly Bargaining Coverage in 16 OECD countries

71 71.5 72 72.5 73 73.5 Bargaining Coverage 1970 1980 1990 2000 2010 year

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SLIDE 9

Index of Corporatist Policy- Making (16 Countries)

1.2 1.4 1.6 1.8 1970 1980 1990 2000 2010 year yearly average Fitted values

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Bargaining Coordination and Tripartism

2 2.5 3 1970 1980 1990 2000 2010 year yearly average coordination Fitted values .2 .4 .6 .8 1 1.2 1970 1980 1990 2000 2010 year yearly means tripartite policy-making Fitted values

Bargaining Coordination Tripartism

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SLIDE 11

Corporatist Scores and Rankings

1974- 1989 1990- 2005 Change in Ranking Change in Score Belgium 2.56 Ireland 3.76 Ireland 10 Ireland 2.44 Sweden 2.04 Belgium 2.89 Italy 7 Italy 0.85 Norway 2.03 Norway 2.82 Germany 2 Norway 0.79 Austria 2.00 Finland 2.70 France 2 Finland 0.72 Finland 1.98 Italy 1.90 Finland 1 Belgium 0.32 Spain 1.90 Austria 1.84 Netherlands 1 Netherlands 0.26 Denmark 1.56 Netherlands 1.79 Canada 1 Germany 0.19 Netherlands 1.53 Germany 1.69 Norway France 0.01 Australia 1.52 Denmark 1.22 US US 0.00 Germany 1.50 Spain 1.13 Belgium

  • 1

Austria

  • 0.16

Ireland 1.32 Sweden 1.13 Austria

  • 2

Denmark

  • 0.34

Italy 1.05 France 0.56 Denmark

  • 2

Canada

  • 0.38

UK 0.68 Australia 0.48 UK

  • 2

UK

  • 0.68

France 0.55 Canada 0.00 Spain

  • 4

Spain

  • 0.78

Canada 0.38 UK 0.00 Australia

  • 4

Sweden

  • 0.92

US 0.00 US 0.00 Sweden

  • 9

Australia

  • 1.03
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SLIDE 12

Trends in Protective Institutions

  • Dramatic decline in union density rates
  • Much smaller decline in bargaining

coverage

  • Resilience of corporatist policy-making

– Trade-off between collective bargaining decentralization and increased participation in corporatist policy-making

  • Overall, no evidence of generalized

dismantling, at least in Continental Europe

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Impact of Corporatism on Inequality

(1) (2) (4) (5) (6)

  • Dep. Var.

Inequality Inequality Inequality Inequality Inequality Size of the Welfare State

  • 1.038***
  • 1.011***
  • 1.054***
  • 0.970***
  • 1.018***

(0.16) (0.16) (0.17) (0.16) (0.19) Corporatist Index

  • 0.809***
  • 0.937***
  • 0.830***
  • 0.796***

(0.17) (0.16) (0.17) (0.16) Corporatism 90-02 0.573*** 0.698*** 0.586*** 0.568*** (0.16) (0.15) (0.15) (0.16) Education Years

  • 0.222**
  • 0.174
  • 0.230*
  • 0.247**
  • 0.229**

(0.100) (0.13) (0.11) (0.10) (0.10) Trade Liberalization 0.145* 0.132 0.148* 0.119 0.136 (0.079) (0.076) (0.081) (0.090) (0.082) Capital Liberalization

  • 0.202

(0.18) Union Density 0.00179 (0.0094) SD Government

  • 0.00855

(0.0082) Bargaining Coordination

  • 0.421***

(0.11) Coordination 90-02 0.236* (0.12) Tripartism

  • 0.255

(0.42) Tripartism 90-02 0.180 (0.41) Constant

  • 11.34
  • 10.06
  • 11.59
  • 8.280
  • 10.07

(7.93) (7.72) (8.12) (9.08) (8.25) Observations 32 32 32 32 32 R-squared 0.83 0.84 0.83 0.84 0.84 *** p<0.01, ** p<0.05, * p<0.1; robust standard errors in parentheses E

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Impact of Corporatism on the Wage Share

(1) (2) (3) (4) (5) (6) (7) (8) (9)

  • Dep. Var.

Wage Share Wage Share Wage Share Wage Share Wage Share Wage Share Wage Share Wage Share Wage Share Corporatist Index 0.713 0.687 0.252 0.654 1.037 0.730 0.928 0.898 (0.84) (0.83) (0.93) (0.82) (0.72) (0.78) (0.90) (0.76) Corporatism 90-02

  • 2.407***
  • 2.408***
  • 2.012***
  • 2.483***
  • 2.724***
  • 2.429***
  • 2.478***
  • 2.500***

(0.40) (0.41) (0.55) (0.46) (0.50) (0.34) (0.42) (0.38) Size of the Welfare State 0.0453 (0.35) Education Years

  • 0.632

(0.40) Trade Openness 0.182 (0.21) Capital Openness 0.428 (0.73) Share of FDI 0.0431 (0.73) Union Density

  • 0.0158

(0.020) SD Government

  • 0.0258

(0.030) Bargaining Coordination 0.217 (0.83) Coordination 90-02

  • 0.815**

(0.29) Tripartism 0.468 (1.28) Tripartism 90- 02

  • 1.532

(1.11) Constant 61.93*** 61.97*** 68.01*** 44.71** 60.98*** 61.82*** 62.37*** 62.71*** 62.08*** (1.02) (0.99) (3.88) (19.9) (1.64) (2.01) (1.06) (1.54) (1.86) Observations 32 32 32 32 32 32 32 32 32 R-squared 0.39 0.39 0.46 0.40 0.40 0.39 0.40 0.40 0.41 *** p<0.01, ** p<0.05, * p<0.1; robust standard errors in parentheses

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Effects of Workers’ Protective Institutions

  • Corporatism (and particularly collective

bargaining coordination) survives but is no longer redistributive

– Social pacts of the 1990s: macro- concessionary bargaining – Redistribution through transfers seems more effective

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Determinants of Societal Inequality

Labour Power + Size of the Welfare State

  • Inequality
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What Has Happened?

  • Corporatist institutions without strong

unions are empty shells?

  • More elastic labor demand?
  • Internalization of neo-liberal imperatives?

– E.g. transformation of social democratic parties

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SLIDE 18

Implications

  • Labor market channel sealed off for

redistribution

  • Transfers still highly effective
  • Questions:

– 1) Do we need a new model of labor market regulation? – 2) How do we finance generous transfers?