Environmental/Contextual Issues

1
Environmental/Contextual Issues

• Social, Legal, Economic and Political

2
Social Environment for Collective Bargaining in
the U.S.

• Individualism
• Rights of individuals superior to other rights
• Property rights as a derivative of individual
  rights
• Corporations are legal individuals
• Chartered by state
• Collectivities of shareholders
• Perpetual life
• Limited liability

3
The Employment Relationship

• An economic exchange transaction
• Between two individuals
• Basically, perceived as no different than
  purchasing a commodity

4
Unions and Individualism

• Collectivities
• Collectivizing what we view as natural individual
  economic transaction
• At a disadvantage vis-à-vis those exercising
  rights
• Corporations legal individuals
• Employees actual individuals
• Skeptical About Governmental Protection

5
Other Values

• Europe
• Class based collectivistic values in Europe
• Asia
• Confucianism based principles of obligation and
  harmony

6
Implications of Social Environment for Collective
Bargaining

• Strong management and employers
• Property rights
• Individualism
• Job provider
• Resistance to unionism
• Unionism
• Struggle for legitimacy
• Difficulty in staying organized

7
Legal Environment

• Basic Principles of Legal Environment
• Accessible
• Wide Coverage
• Public
• Mandatory Procedures

8
Historical Overview

• 1806 - 1842 Conspiracy Doctrine
• 1842 - 1932 Decline of Conspiracy Doctrine -
  Legal Focus on Union Tactics
• Through 1870s Damage Suits
• 1880s - early 1930s Injunction
• 1932 - 47\55 Legal Environment Favorable to
  Unions and CB
• 1947\55 - Present Legal Environment Neutral to
  Pro-Employer

9
Basic Legal Framework

• National Law in U.S. for Private Sector
• Mixed Federal\Provincial in Canada
• Employee Choice
• Some Exclusions
• Some Employers
• Railway Labor Act
• Some Employees
• Broad Definition of Labor Organization
• Representation by Bargaining Unit
• Majority Rule
• Exclusive Representation
• Administration by political appointees (on NLRB)

10
Basic Legal Framework (cont.)

• Unfair Labor Practices
• Bargaining
• Limited to terms and conditions of employment in
  U.S.
• Broader in Canada
• Use of Economic Weapons to Determine Outcomes
• Administration by an administrative agency
• NLRB in U.S.
• Comparable bodies in Canadian

11
Basic Legal Framework (cont.)

• Determining Representation
• Elections in U.S.
• Elections and card checks
• Recent Legal Issues
• Organizing
• Duty to Bargain
• Striker Replacement
• Employee Involvement in Nonunion Firms

12
Implications of Legal Doctrine

• Union Organizing
• Evolution
• Employer noninvolvement, 1935-41
• Employer involvement but required to permit union
  on premises to present views, 1941-53
• Union exclusion
• From presenting views, 1953
• From coming on premises (generally)
• 1956
• 1992
• Development of employer union resistance tools by
  mid-1950s

13
Implications of Legal Doctrine (cont.)

• Bargaining
• Board not involved in determining terms and
  conditions of employment
• Mandatory and nonmandatory subjects
• Corporate restructuring
• Defaults to an adversarial system
• Bargaining power
• Implementation at impasse
• Strikers and replacements
• Flexibility in paying strike replacements
• No subsystem to prevent employer pyramiding legal
  rights to deunionize

14
Implications of Legal Doctrine (cont.)

• Remedies
• Little disincentive
• Delay
• Minimal government involvement
• Favors economically stronger party

15
(No Transcript)
16
Economic Environment

• Macro-Level Focus
• Determinants of Union Growth
• Shifts in Structure of Employment
• Business Cycle
• Micro Level Focus
• Labor and Product Markets\Firm
• skilled - hard to replace workers
• inelastic demand for union product
• inelastic supply of substitutes for union labor
• ratio of labor costs to total costs (importance
  of being unimportant)
• Take Wages out of Competition - Organize the
  Product Market

17
Product Market

• Successful organization of product market key to
  union success during period 1945-75
• Autos
• Steel
• Airlines
• Trucking
• Paper
• Construction
• Union Taking Wages (labor costs) Out of
  Competition

18
U.S. Employment(absolute numbers in 1,000s)
SOURCE U.S. Bureau of Labor Statistics
19
Product Market

• Implications
• As entry increases, union power declines
• Wages and labor costs
• If employers can remove themselves from unionized
  sector, union power declines
• spatial limitations
• Longshoring
• Public Employment
• Post 1975
• Increasing foreign competition - nonunion
• autos less than 5 market share in late 60s to
  roughly 35 today
• steel increase in worldwide capacity
• Deregulation - airlines and trucking

20
Product Market (cont.)

• Employer Removal - rubber
• Spatial Characteristics - longshoring

21
Microeconomic Principles

• Consumer Welfare
• Efficiency is desirable
• Efficiency is determined by low prices to
  consumers
• Work is for the purpose of generating income so
  that individuals can consume
• Labor supply
• Labor an input to production

22
Implications

• More competitive product markets due to entry of
  unorganized firms reduces union power
• Unionized employer capability of removal from
  union sector reduces union power
• Both happened in period 1975-2005

23
Political Environment

• Political linkages
• Unions Democratic Party
• Employers Republican party
• Republican party rise over last 25 years
• Favorable to Business
• Flexibility
• Reduction of Legal Constraints
• Minimalist government

24
Linkages to Other Three Environments

• Social
• Reinforces individualism Legal
• Legislation
• Appointments
• Administrative
• Judicial
• Economic
• Fewer constraints on business
• Willingness to let market work