Internal
Links

Top
 Review Notes on the LU 8:  The Environment for Bargaining
External
Links
  Syllabus 
Link
  Resources 
Link
 
Outline on LU 8:  The Env for Bargaining 
  
Link
 Environment of the Labor Movement: Factors Impacting Unions & the Labor Movement   
Link
 The Legal Political Environment of Bargaining:  Government / Public Interests   
Link
          Labor Movement Strategies / Philosophies   
Link
          The Cornerstones of Labor Law   
Link
          The RLA of 1926   
Link
          The Wagner Act of 1935   
Link
          The Taft Hartley Act, Amended of 1947/1974   
Link
 An Overview of Economics   
Link
          The ICA, 1887   
Link
          Globalization   
Link
          Labor Economics   
Link
          Labor Capital Substitution   
Link
 The Labor Markets   
Link
          Interests   
Link
          Class & False Consciousness   
Link
          Ideology   
Link
                   Employer Interests in Bargaining   
Link
                   Employee Interests in Bargaining   
Link
                   Domhoff:  Key Interest Groups   
Link
                   Union Members Interests in Bargaining   
Link
 Bargaining Structures   
Link
          Types of Bargaining Structure Units   
Link
          Factors Impacting Bargaining   

 
Internal
Links

Top
 Outline on the Environment of the Labor Movement: 
Factors Impacting Unions & the Labor Movement
External
Links
  From a sociological perspective, the "environment" is made up of TWO aspects which have form & content, social structure & culture  
  a. Social structure is the form & shape of society which occurs on many levels from the personal level to the small group level to the organizational level to the societal level  
  In Labor relations, the primary concern is w/ TWO of the ten social structures including the:  
     i.  economic system  
     ii. government or political system  
  b. Culture is the content of society which is the societal aggregation, the collective consciousness of knowledge, beliefs, values, & norms  
  Culture is manifested in the values, ideology, interests, etc. of people inside & outside of the Labor Movement  
  History is constructed of, & constructs this environment of social structure & culture  
  More specifically, Labor has to struggle with:  
  -  employers who did not see them as legitimate  
  -  the media who did not see them as legitimate  
  -  a public who did not see them as legitimate  
  -  courts that enjoined & punished collective activity  
  -  Congress & the President who have no legislative support & first, then some mixed support  
  -  competition from immigrant labor  
  Unions arise as a collective response to exploitation & alienation
 
  The emergence of unions as a collective response to exploitation & alienation occurs w/ the development of class consciousness
 
  See Also:  Ideology, Class & False Consciousness  
  The first stage in the development of class consciousness at work it often a personal reaction to exploitation at work characterized by w/drawl, quitting, apathy, depression, etc.
 
  The second stage in the development of class consciousness at work is that often the informal wk grp becomes a medium for airing complaints, but actions are few & largely personal
 
  In the second stage, the wkr may come to rely on family, community, ethnic group, etc. for support in relation to problems at work  
  The third stage in the development of class consciousness at work is organized collective action which requires leadership from one or more workers
 
  In order for wkplace organizing to take place, wkrs must overcome the paralyzing fear of mgt, recognizing that some fear will always be present
 
  The reasons & development of collective responses to conditions at work are essentially the same throughout history whether the worker is a peasant in Egypt  in 2000 BC or a programmer in Redmond, OR at Microsoft in 2000 AD
 
  The dual economic development ( of agriculture & industry ) impacts unionization in US
 
  Agrarian capitalism allowed small farmers to grow
 
  Industrialization & urbanization & concentration of agriculture encouraged shift from small farmer to the industrial worker  
  Factory work was low pay & low status & employed mostly women & children  
  This established the mode of a high level of control in factory work  
  Early manufacturing work had been done by crafts & guilds  
  This system of early manufacturing was destroyed by the assembly line & the division of labor  
  As males moved into the factory, family wage arose & status, authority, etc. increased marginally  
  The env of the Labor Mvmt includes all the social, historical, cultural, & political factors that make up society  
 
 The env of the Labor Mvmt includes the history of 
- racial discrimination
- gender discrimination
- conflict btwn labor & mgt
- war
- econ growth & decline
- globalization
- deindustrialization
- technological development
& more		  

 
Internal
Links

Top
 Outline on the Legal Political Environment of Bargaining
External
Links
  The Legal Political Environment of Bargaining:
 
  As established by the THREE pieces of cornerstone labor legislation, including: 
 
  -  The RLA of 1926
 
  -  The Wagner Act of 1935
 
  -  The Taft Hartley Act of 1947
 
  Bargaining issues can be divided into THREE legal categories of mandatory, permissive & prohibited bargaining issues
 
  Mandatory issues include wages, hours, & other terms & conditions of employment
 
  Terms & conditions of employment may be amorphous
 
  The courts & the NLRB have generally established that an issue is w/in this area when the practice has as direct & immediate effect on workers' jobs & is strongly determined by labor cost factors
 
  Mgt or labor may go to impasse, i.e. refuse to agree on a contract, over mandatory issues  
  An example of a mandatory issue in bargaining is a plant closing or a reassignment of work btwn job groups
 
  Permissive issues in bargaining do not require a response because they have no direct impact on mgt or labor costs
 
  A demand by a union to have a say in establishing product lines or prices is permissive, but because of the GLC & the corporatist approach labor has eschewed workplace democracy & thus unions have only asked for this power in extremely rare situations
 
  Mgt or labor may NOT go to impasse, i.e. refuse to agree on a contract, over permissive issues
 
  Permissive issues are not included as often when the distinction btwn mandatory & permissive is imposed by law
 
  Permissive issues are included more often when Labor has stronger bargaining power
 
  Prohibited issues are statutorily outlawed
 
  An example of prohibited issues in bargaining is bargaining to require the firm to use only union produced goods
 
  See Figure 8 - 1:  How Mandatory or Permissive Status is Determined
 
  Figure 8 - 1  How Mandatory or Permissive Status is Determined demonstrates the factors, such as internal union affairs, mgt domain, employment issues, & labor costs, which determine whether a bargaining issues is something that must be bargained over, i.e. a mandatory issue, or an issue the may be bargained over, i.e. a permissive issue  
  In determining the mandatory or permissive status of a bargaining issue, internal union affair are broadly defined as matters related to the relationship btwn unions & wkrs  
  In determining the mandatory or permissive status of a bargaining issue, mgt's domain is broadly defined as any matter related to the firms entrepreneurial function  
  In determining the mandatory or permissive status of a bargaining issue, employment issues are broadly defined as matters related to the relationship btwn wkrs & the firm  

 
Top
  
Figure 8 - 1:  How Mandatory or Permissive Status is Determined
Figure 8 - 1 How Mandatory or Permissive Status is Determined demonstrates the factors, such as internal union affairs, mgt domain, employment issues, & labor costs, which determine whether a bargaining issues is something that must be bargained over, i.e. a mandatory issue, or an issue the may be bargained over, i.e. a permissive issue

 
Internal
Links

Top
 Outline on Labor Movement Strategies & Philosophies
External
Links
  -  Project:  Uplift Unionism v. Business Unionism
Link
  Union strategies & philosophies have evolved over time
 
  In any org, there is no strict dividing line btwn any of the types of strats or phils, rather, each org has it's own unique blend that ultimately defines it's character
 
  Today it is generally accepted that labor mgt relations are essentially a combination of corporatist & business unionism
 
  The corporatist philosophy & business unionism were arrived at during the struggle to establish Labor as a legitimate social actor & essentially came to be accepted through what has been called the Great Labor Compromise ( GLC )  
  The GLC held that unions deal only with traditional areas including wages, hours, benefits, & working conditions, & will not form a Labor party  
  UNION PHILOSOPHIES:
 
  The corporatist strat holds that the employment agenda is jointly governed by unions, employers & the govt
 
  The corporatist strategy is well established in Europe but has receded in US  
  The uplift unionism strat focuses on social issues & seeking improvement for working class
 
  An example of uplift unionism is seen in the practices of the NLU (Nat Labor Union) of the mid 1800s  
  The revolutionary unionism strat creates an alternative to the cap system through worker ownership of major means of production
 
  An example of rev unionism is seen in the practices of the IWW (International Workers of the World) in the US; as well as, Marx, Rosa Luxemborg, et al in Europe in the 1800s  
  The business unionism strat has an emphasis on short term, tangible objectives; aka bread & butter issues such as
     wages retirement
     working conditions health care
     job security disability
 
  An example of the biz union strat is seen in the practices of the AFL & Gompers, who lead  from 1886- 1924, wherein the AFL adopted a posture that came to be known as “business unionism.”   
  Following Gompers, who lead the AFL from 1886 - 1924, when he died, Am labor embodied a corporatist, business union philosophy
 
  The predatory unionism strat is seen in the practice of gaining members from other unions or worker orgs or of gaining strategic goals of the union at the expense of some or many members
 
  An example of the predatory unionism is seen in the practices of the UMWA & competing unions during many UMWA strikes  
  Today a common union focus is on:
-  wages & other "traditional issues"
-  helping the working class in general
-  & much less on creating a workers' owned system
other?
 
  Today a common union method includes:
 
  -  the individualist tactic called action by action, whereby the union is expanded on a strike by strike basis
 
  -  national actions & international actions
 
  -  political lobbying: whereby the Labor Mvmt supports the passage of laws supporting the union focus, or to create trilateral systems to manage employment relationship
 
 
 NATIONAL UNION STRATEGY & PLANNING  
  Unions have been closely examining strategy since before the Reagan admin (1980) because of loss of membership  
  Unions have taken on the best strategic planning methods known  
 
 Strategic planning often conflicts w/ the democratic process because democratic processes are often short term in focus while strategic planning is often more long term in focus  
 Link
 See Also:  Figure 4 - 2:  A Union Strategic Planning Model  
  The Figure on the Union Strategic Planning Model delineates a clear, sophisticated planning process similar to those used by most modern, rational orgs  
  Alternative Representation  
  Alternative representation occurs when unions create associations and other forms of bargaining units w/ a variety of employees who have a varying level of union affiliation
 
  W/ alternative representation, associated members pay only service fee
 
  Alternative representation is popular among professionals, public sector workers, part time wkrs, et al
 
  Alternative representation addresses new issues which concern wkrs
 
  Alternative representation often a good precursor to unionization
 
  See Also:  Types of Bargaining Structure Units  
  Some Unions Strategies:  
  Corporate campaigns occur in difficult organizing situations, when Labor pressures a corp, w/ PR campaigns, as well as those corps whose officers are members of the boards of the target corps 
 
  Corp campaigns are often used on the banks of target corps
 
  A political action committee (PAC) is formed when employers, unions or whatever org raise & disburse $ to support political candidates & initiatives
 
  Unions which utilized PACs believe they need to move off of firm level bargaining as a principal mission towards a broader approach
 
  For unions which move from firm level bargaining, other strategy types include:
-  collective bargaining at the industrial level
-  legislation, & other legislative actions
-  mutual insurance
-  confrontation, including strikes, picketing, educating, boycotts, etc. at the ind level
 
  Most orgl analysts believe that strategy determines structure  
  Most orgl analysts agree that structure should ultimately be determined by strategy, though in many orgs there is a dysfunctional disjunction btwn the two  
  Strategy & structure are determined by goals  
  Goals must take into account the orgl mission & the env  
Link
 Figure 4 - 4:  A Model of the Key Determinants of Union Organizational Structures  
  Figure 4 - 4:  A Model of the Key Determinants of Union Organizational Structures demonstrates the relationship btwn the orgl env, the orgl goals & how they should dictate the nature of the org's strategies & structure (which should "match each other"), all of which are the determinants of performance & efficiency  
  In determining orgl structure, the orgl env often includes such factors as the characteristics of bargaining partners or competitors, the legal env, the product mkt, the political env, & the history of the org  
  In determining orgl structure, goals often include the wkplace goals, as well as external goals which may include the goals of shareholders, mgt, & other stakeholders  
  In determining orgl structure, strategy often includes collective bargaining strat, mutual insurance, legislative actions, confrontation w/ wkrs, mkt strat, R & D strat, etc.  
  In determining orgl structure, structure often includes the nature of the orgs horz & vert structure, i.e. the division of labor, bargaining structure, etc.   
 
 THE BUSINESS APPROACH  
  From the days of the AFL, most major unions have taken a business approach  
  The business approach attempts to enhance econ outcomes & address grievances  
  Unions have ceded the right to make innovations in the workplace to the firm  
  Unions have not intruded on the property rights of owners & mgrs  
  Firms make hiring decisions w/o union intervention except when union supplies workers (building trades)  
  Union have strongly pushed the regulation of health & safety OJT  
  Unions pushed legislation for the regulation of health & safety in the workplace  
  Unions have negotiated for some rules related health & safety in the workplace  
  Unions generally do not include health & safety regulation in the contract  
  Why not do it all as contract rules?   
  The Great Labor Compromise ( GLC ) established a form of the corporatist approach to labor relations   
  In the Am corp approach, employers, unions & govts are all actors in the evolving employment relationship
 
  Prior to the Railway Labor Act ( RLA ) of 1926, w/ the exception of WW 1, employers & unions used their sheer bargaining power to deal w/ each other w/o govt involvement
 
  During this period, employers had more power & relied on property rights as enforced by the courts, to crush unions, except where workers controlled access to the acquisition of skills
 
  In 1926, the RLA established the National Mediation Board ( NMB ) which brought the govt into the labor relations in the transportation sector  
  In 1936, the Wagner Act established the legitimacy of unions for non transportation employees  
  In 1947 the Taft Hartley Act shifted the corporatist approach more toward employers advantage & established the FMCS  
  US labor relations have repeatedly seen the waxing & waning of the corporatist approach
 
  Federal govt involvement in labor relations generally increased through the passage of the the RLA, the Wagner Act, & the Taft Hartley Act
 
  The courts have generally held that property rights take precedence over the right to organize & collectively bargain
 
  Juridical decisions awarding supremacy of property over labor have limited fed govt involvement in labor relations  
  At the same time that property won supremacy over labor, the courts & statutory law increasingly endorsed the legitimacy of unions & the role of collective bargaining in resolving labor mgt disputes
 
  Fed govt involvement in labor relations was at its peak btwn WW2 & the mid 1970s
 
  During WW 2 all wages & prices were administered, & strikes were prohibited
 
  Thus during WW2 mgt & labor needed the approval of the Govt for all agreements, & disputes had to be settled w/o strikes even if govt intervention was required
 
  Taft Hartley laid the ground work for more Fed involvement in labor relations through the FMCS & national emergency dispute procedures
 
  Over the next 20 years, ( 1947 - late 60s ), Presidents have followed Truman & invoked cooling off periods, but only on a limited basis
 
  In labor disputes, before or during a cooling off period, it is common to call parties to Washington to "jawbone" them into settling  
  This corporatist approach worked reasonably well during the period in which productivity was growing at an annual rate of 3 % & inflation was low  
  By the end of the 1960, labor relations enter the Post Industrial Era, & inflation became an issue because it eroded the earning power of the average worker & thus began the unraveling of the GLC & the corporatist approach  
  In the Post Industrial Era, the parties began taking a harder line in negotiations  
  Labor was not willing to adhere to the wage & price controls of the Nixon administration  
  While it was not then readily apparent, the globalization of the econ was beginning, fueled by the Arab oil embargo of 1972 - 73  
  See Also:  Deindustrialization  
  See Also:  Globalization  
  The Western econ was becoming more integrated, bringing in labor & product competition from Europe & Japan  
  The Western econ was becoming more closely tied to the rest of the world, the second (developing ) & third world ( undeveloped )  
  The corporatist approach essentially ended w/ the election of Reagan in 1980  
  Reagan reduced the regulatory role of govt by cutting the number of govt workers  
  Mgt. had already begun taking a harder line since the late 1960s, but w/ Reagan, mgt. became even more aggressive   
  While mgt had taken a harder line on economic issues since the 1960s, they became even more aggressive & aggressively stepped up the tactics of union avoidance & union decertification  
  Reagan fired & replaced striking Federal Air Traffic Controllers w/ private sector employees  
  The confrontation w/ air traffic controllers threw down of the gauntlet to Labor since the controllers were both fed wkrs & skilled labor  
  No significant legislation or regulations have been enacted since Taft Hartley in 1947, & the Presidents following Reagan, ( Bush, Clinton, Bush ) have taken a laissez faire approach to labor relations thus leaving the corporatist approach balanced as Reagan designed it  

 
Top
  
Figure 4 - 2:  A Union Strategic Planning Model
1.  Define the mission & purpose 2.  Scan the environment 3.  Identify strengths, weaknesses, opportunities, threats
4.  Develop objectives, goals, targets 5.  Form strategy & an action plan 6.  Evaluate & reiterate
The Figure on the Union Strategic Planning Model delineates a clear, sophisticated planning process similar to those used by most modern, rational orgs

 
Top
  
Figure 4 - 4:  A Model of the Key Determinants of Union Organizational Structures
Figure 4 - 4:  A Model of the Key Determinants of Union Organizational Structures demonstrates the relationship btwn the orgl env, the orgl goals & how they should dictate the nature of the org's strategies & structure (which should "match each other"), all of which are the determinants of performance & efficiency

 
Internal
Links
blank
Outline on  Labor Legislation
External
Links
   
Types of Law: 
  
    Common or juridical law:  is law made by the decisions of courts, usually Fed District Cts or the Sup Ct; also includes unwritten law based on usage & custom as distinct from statute law   
    Statutory law is law established. by legislatures   
    Laws are made by fed, state, & local legislatures & by many courts   
    Civil law pertains to the private rights of individuals & to legal rights in the ordinary affairs of life   
    Rules are the "law" established by govt agencies as they implement common, statutory law, or executive orders   
    Executive Orders are "rules" written by the President which have the force of law in telling govt agencies how to operate   
    Examples of rules include 
-  the NLRB rules on elections 
-  the EPA's rules on emissions 
-  the school board's rules on the dress code 		  
    Criminal Law is law that govt will help an individual prosecute; it will be their advocate as typically embodied in the county, state, or fed prosecutor   
    In most cases, the govt will not help an individual prosecute civil laws, but the govt will prosecute criminal law for an individual 
 
    Examples of govtl involvement in law can be seen in that a prosecutor will prosecute someone who robs another, but if a person tricks an individual out of their money, the aggrieved person must sue   
   
Labor Law: 
  
 
1890
 The Sherman Anti Trust Act was designed to bust the trusts, but was used against Labor   
 
1914
 The Clayton Anti Trust Act revised the Sherman Anti Trust Act by removing the provisions that prevent Labor Organization & by adding more teeth to its anti trust aspects   
 
1926
 The Railway Labor Act estbed an early mediation board to resolve labor mgt conflict; involved the govt in the transportation sector; estbed emergency boards to impose solutions, all of which were labor mgt relations innovations which were embodied on other laws in other sectors   
 
1932
 The Norris LaGuardia Act, along w/ the Wagner Acts, set most rules for representation & bargaining rules & formed the NLRB   
 
1933
 The National Industrial Recovery Act (NIRA) presaged imp sections of the Wagner act in that it guaranteed the right to form a union, it assisted mgt & labor in resolving conflict, etc.   
 
1934
 The Copeland Anti Kickback Act prohibits kickbacks as required part of continued employment   
 
1935
 The Wagner Act, along w/ the Norris LaGuardia Act, set most rules for representation & bargaining rules & formed the NLRB   
 
1937
 Labor Court Cases:  In NLRB v Laughlin Steel, the Wagner Act was upheld because Roosevelt packed the Supreme Ct   
 
1936
 The Brynes Act made it illegal to recruit & / or transport people across state lines to interfere w/ picketing, organizing, etc.   
 
blank
 The Smith Connally Anti Strike Act, aka the War Labor Dispute Act minimized the impact of labor mgt conflict during WW 2   
 
1947
 The Taft Hartley Act (Truman) estbed unfair labor practices by unions   
 
1959
 The Landrum Griffin Act (Eisenhower) estbed a labor union member bill of rights   
 
1962
 Executive Order 10988 (JFK) allows public sector workers to join unions   
 
1970
 RICO was passed to fight organized crime & was also used to fight corruption in unions   
 
1974
 The Amended Wagner & Taft Hartley Acts (Nixon) wrote EO 10988 into law, estbing organizing rights for public employees   
 
1976
 The Civil Service Reform Act codified (made into law) EOs 10988, 11491, 11616, 11838 which estbed the Federal Labor Relations Authority, the equivalent of the NLRB, & estbed the requirements & mechanisms for impasses of contracts & grievances   
    Failed labor law in the 70s   
    The Common Situs Picketing Bill would have permitted unions to picket any site involved in a labor dispute   
    If the Common Situs Picketing Bill has passed, a a single union could've shut down a site, but it was vetoed by President Ford in 1976   
 
1977
 A bill authorizing punitive damages for employer violation of labor contract died in the Senate   
 
1990
 Alternative Dispute Resolution & Rulemaking Act helps the FMCS offer alternative dispute resolution   
    Labor Law Reform   
    The NLRB under Reagan & Bush had Labor leaders saying they would be better off w/o the NLRB!   
    Clinton has been more favorable to Labor than most recent Presidents w/ the exception of his support for NAFTA   
    Clinton recommended penalties for businesses who stall during organizing elections   
    The 1994 Republican Landslide, lead by Newt Gingrich, dashed hopes for labor law reform   
 
1992
 Work teams, QCs, etc.   
    In the court case, Electromation Inc.  309 NLRB No. 163 (1992) held that such practices as QCs, etc. violated the Wagner Act   
    Mgt & labor stay w/in the bounds of the Electromation decision by limiting the scope of employee involvement programs   
    The "Team Act" was vetoed by Clinton in 1996 to applause of Labor because it would have changed OT rules, allowing the owner schedule wkrs to work 4 10 hr days w/o your permission, with no OT   
    Currently Labor & Mgt. advocates want reform to allow work teams--   esp to Wagner Act Section 8(a)2   
 
1996
 NAFTA  
    - often include min labor standards that usually are not met by 3rd world countries, most treaties have few enforcement measures   
    - was vehemently opposed by Labor   
    - was supported by Clinton & Republicans (except Buchanan)   
    - was opposed by Labor because they feared losing jobs to Mexico   
    - supporters claimed it would be made up by more trade   
    A debate rages today on what has happened as the result of NAFTA   
 
2000
 Bush, Jr. Administration   2000 - 2008   
    During first week in office, the President issued an Executive Order limiting the use of unions dues for political purposes   
    Bush policies of the largest debt growth in history, & unprecedented dereg & lack of oversight of the financial sector results in the Bush Depression of 2007-2010   
 
2008
 Obama Administration  2008 -   
    During his first 2 yrs in office, Obama passes a universal healthcare program & attempts to pull the econ out of the Bush recession of 2007-2010   
    After midterm elections of 2010, Tea Party members in the House obstruct legislation of both Dems & Reps, creating the infamous "Do Nothing Congress" of this century   
    The Tea Party obstructs even routine procedures such as passing a budget, but also such govt housekeeping such as appointing members to the NLRB & the financial watchdog agency   

 
Internal
Links

Top
 Outline on the Railway Labor Act  1926
External
Links
  -  Summary:  The RLA established the NMB to inject the govt into transportation negotiations in situations where employers & unions could not agree on how to resolve an industrial conflict. The RLA could also establish emergency boards & allow Congress was empowered to impose solutions when the parties were unable to do so  
  The railroads had been a force in the US since the early 1800s
 
  The govt began in the 1890s to try to devise procedures to avoid railroad strikes & assure stable transportation w/o denying the rights of workers to organize  
  Labor agreements covered rail workers earlier than any other industry  
  Congress created labor mgt mediation procedures through the Erdman Act of 1898 & the Newlands Act of 1913  
  In the Adamson Act of 1916, the 8 hour day was established for rail workers  
  The Transportation Act of 1920 founded the Railroad Labor Board  
  After the Railroad Labor Board failed to prevent the strike of 1922, Congress passed the Railway Labor Act (RLA) of 1926  
  As amended in 1934, the RLA continues to be the basic legislation in the field  
  Thus, transportation & the distribution of goods has occupied a different niche in law & Labor Law than has manufacturing or services
 
  There are FIVE provisions of the Railway Labor Act (RLA) of 1926
 
  a. Avoid service interruptions
 
  b. Eliminate restrictions on joining a union
 
  c. Guarantee freedom of wkrs in any matter of self organization
 
  d. Provide for dispute settlement
 
  e. Enable prompt grievance settlement
 
  In 1996, the Federal Aviation Authorization Act extended jurisdiction of the RLA to include air express companies & their ground employees
 
  The RLA established the National Railroad Adjustment Board (NRAB)
 
  The NRAB has an equal number of union & mgt members
 
  If the NRAB deadlocks on grievance, it calls in a referee
 
  But most grievances are settled by the Public Law Boards (PLB) & Special Boards of Adjustment which are ad hoc arbitrators or rotating panels of industry neutrals  
  The RLA also established the National Mediation Board  (NMB)  
  The NMB is composed of 3 members appointed by the President  
  The NMB oversees elections  
  The NMB helps parties reach an agreement by mediating bargaining on request, interpreting mediated contracts or appointing an arbitrator if mediation fails  
  The NMB urges arbitration when mediation unsuccessful  
  No unilateral changes or strikes are permitted unless the NMB declares an impasse
 
  If strike would substantially disrupt interstate commerce then an Emergency Board can be convened which has 30 days to issue a report (This provision is similar to the cooling off power the President has today)
 
  There are TWO major effects of the RLA  
  a.  Requiring workers be organized by craft or occupational area  
  b.  Forcing carriers to negotiate w/ numerous unions which often have different/conflicting goals  
  Example:  firemen on trains:  eliminated by diesel  
  If org was along industrial lines, it would've been a phase out instead of a contentious "extinction" battle  
  Thus, the nature of the RLA helped foster the practice of "feather bedding"  

 
Internal
Links

Top
 Outline on the Wagner Act, aka the National Labor Relations Act  1935
External
Links
  -  Introduction:  The Wagner Act, aka the National Labor Relations Act (NLRA), was enacted in 1935 & is the cornerstone of our National Labor Policy  
  -  Summary:  The NLRA guarantees the rights of workers to organize & to bargain collectively w/ employers.  It encourages collective bargaining & provides govt processes for the selection of employee bargaining representatives. It established the National Labor Relations Board (NLRB)  
  From the Preamble to the National Labor Relations Act:  "It is hereby declared to be the policy of the United States to eliminate the causes of certain substantial obstructions to the free flow of commerce and to mitigate and eliminate these obstructions when they have occurred by encouraging the practice of collective bargaining and by protecting the exercise by workers of full freedom of association, self organization, and designation of representatives of their own choosing, for the purpose of negotiating the terms and conditions of their employment or other mutual aid or protection."
 
  The Wagner Act was passed in the throes of the Depression
 
  It was a period of of weakness for Labor
 
  The Great Depression & the Wagner Act sent a strong message to the people which was that things could change, & that the govt helped the small person too  
  Many people joined Marxist/socialist/communist related groups, but in effect FDR's New Deal reformed the system & headed off revolution  
  The Wagner Act can be seen as an important part of the New Deal  
  The Wagner Act of 1935 essentially legalized unions & union activities & founded the basis of the modern labor movement
 
 
 Under Section 7 of the National Labor Relations (Wagner) Act, employees are entitled to form, join, or assist labor organizations
 
  There are TEN major provisions of the Wagner Act
 
  1.  Employees may form a union
 
  2.  Employees may join a union
 
  3.  Prohibits interference w/ assisting a union
 
  4.  Employees may financially contribute to a union
 
  5.  Prohibits discriminating against a union member
 
  6.  Employers must bargain in good faith
 
  7.  Employees may strike & have a right to open jobs upon their return  
  8.  Employers must recognize a union as having the right to exclusive representation of workers
 
  9.  The NLRB is created as an independent govt agency that reports only to Congress
 
  10.  Some workers are not covered by the Wagner Act & therefore have little right to organize:  supervisors & mgrs., agricultural workers, domestics, family workers, federal, state, & local employees, & employees covered by the RLA
 
  The provisions of the Wagner Act are often seen as establishing the rights of unions, the rules of collective bargaining, workers' rights to unionize, unfair labor practices  
  The NLRA does not spell out wages & working conditions  
  There are EIGHT minor provisions of the Wagner Act:
 
  1.  Labor & mgt must bargain in “good faith”   
  2.  the union becomes sole bargaining agent for workers  
  3.  there must be secret ballot elections for union representative
 
  4.  wkrs cannot be fired or harassed for union activity   
  5.  closed shops are allowed, but can only be mandated by state law  
  6.  company unions are illegal  
  7.  if strikers return to work, they must be rehired for open jobs that they qualify for  
  8.  if strikers return to work, they must be given preference when jobs become open  
 
 In essence the Wagner Act declared certain practices by employers against unions to be illegal
 
  A study tracking organizing success following the passage of the Wagner Act found that organized firms had a 20% lower rate of return than non union firms  
  Because the Supreme Court declared the NIRA void in 1935, employers thought the same would happen w/ the Wagner Act  
  Therefore employers were intransigent & did not obey the Wagner Act  
  Most of the strikes from 1935 to 1937 were over union attempts to be recognized & not over wages or other issues  
  Employers fought back against the attempts to estb unions w/ programs such as the Mohawk Valley Formula  
  But in 1937, in NLRB v. Laughlin Steel Corp, the Supreme Court ruled the Wagner Act to be constitutional  
  The Wagner Act was amended for the first time in 1947 by the Labor Management Relations Act, commonly known as the Taft Hartley Act  
  The NLRA was again amended in 1959 by the Labor Management Reporting & Disclosure Act, commonly known at the Landrum Griffin Act  
  The Wagner Act was amended & extended by both the Taft Hartley the Amended Taft Hartley Acts in 1974 under Pres Nixon  
 
 The NLRB, which was estbed by the Wagner Act, is the most important Labor relation regulatory agency  

 
Internal
Links

Top
 Outline on the Amended Taft Hartley Act  1974
External
Links
  The Wagner Act of 1935 established the right to organize
 
  The Taft Hartley Act of 1947 extended & amended the Wagner Act
 
  The Landrum Griffin Act of 1959 rescinded some of Labor's power, estb a labor relations bill of rights for workers & businesses
 
  The Amended Taft Hartley Act of 1974 (ATHA) extends many of the rights & obligations of the earlier labor laws to private, non profit healthcare workers, & modified some features of these laws
 
  The Amended Taft Hartley Act gives public workers similar rights to private workers
 
  The ATHA codified (made into law) an EO, e.g. EO 10988  
  The ATHA defines who is & is not an employer, employee, & supervisor thus defining who can organize whom
 
  See Also:  Organizational Actors  
  Employer
 
  Under the ATHA, the employer:  
 
 -  must have 2 or more employees
 
  -  can be fed, state, & local govts (except the PO which is covered under a separate law)
 
 
 -  must allow union representatives to function in their official capacity
 
 
 -  may be primarily in agriculture
 
 
 -  may have small gross receipts
 
  -  may be exclusive exporters
 
  -  may be primarily employing domestic wkrs  
  Employees
 
  Under the ATHA, the employees:  
  -  include the wkrs in the firm, but also those other wkrs affected by a strike
 
  -  include striking workers
 
  -  include those who struck & were discharged by unfair labor practices
 
  -  do NOT include workers who while striking accept a job elsewhere
 
  -  do NOT include a child being groomed for mgt  
  -  do NOT include workers of employers not covered (see above)  
  Supervisor  
  Under the ATHA, a supervisor is one who possesses authority to change someone else's job, e.g.:
- hiring                       - adjust grievance
- firing                        - change pay
- promoting                - assign tasks
- demoting                 - impose discipline
- transferring		  
  Professional Employee  
  Under the ATHA, a prof employee:  
  -  does intellectual, abstract wk  
  -  has performance criteria which cannot be  measured in standardized fashion  
  -  has skills learned through prolonged, specialized instruction  
  -  may be organized, but cannot be included in a nonprofessional unit w/o the majority vote of professionals  
  -  includes those who work in non profit hospitals  
  -  includes such profs as physicians, attorneys, CPAs, engineers, & certain other employees  
  The ATHA also included additional rules for the health care sector  
  Unfair Labor Practices are defined under the Amended Taft Hartley Act  
  It is ironic that when many laws take up volumes, Section 7, the heart of these acts, is one sentence:  
  Employees shall have the right to self organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing and to engage in concerted activities, for the purpose of collective bargaining or other mutual aid or protection.
Section 7, Wagner Act
  
  Provisions:  Section 7  Employer Unfair Labor Practices  
  Under the ATHA, the employer may not:   
  -  deal w/ either of two unions vying for power  
  -  create a company union  
  -  form group of workers to set wages, hours, terms & conditions  
  -  penalize or discriminate against workers for charging employer w/ unfair labor practice  
  Employer MAY require union membership as condition of employment  
  Section 7  Union Unfair Labor Practices  
  Under the ATHA, unions may not:  
  -  require employer to punish worker for anything but failure to pay dues  
  -  force self employed worker to join union  
  -  force employer to bargain w/ uncertified union  
  -  force employer to cease bargain w/ cert. union  
  -  force employer to assign wk to union  
  -  require excessive fees  
  -  force employer to pay for services not rendered  
  -  picket to force recognition if  
     a.  group has not been certified  
     b.  either no union election has taken place w/in 12 mo or picketers request election w/in 30 days, bu  
     c.  union may picket to advise public that employer is not unionized, but may not interfere w/ operations  
  Other Provisions of the Amended Taft Hartley Act:  
  Right to express views in any form  
  Hot cargo:  no right to refuse to handle/use products of certain employers-- except for construction union  
  Construction workers can organize w/o majority status (many construction jobs are short run)  
  Must notify FMCS if picketing health care facilities  
  Representation Elections     S 9(b)  
  All workers regardless of union membership are represented  
  The NLRB determines which group of employees is to be represented, but cannot:  
  a.  include professional & nonprofessional in same unit unless majority of professionals agree  
  b.  deny representation to a craft. Crafts may form own unit; NLRB interpreted this broadly so that crafts often are included in larger unit  
  c.  include plant guards in unit w/ other workers  
  d.  Supervisors & mgrs. may not be included in unit  
  National Emergency Disputes  
  This is a provision of the original Landrum Griffin act  
  President believes strike imperils national interest  
  Appoints board of inquiry to investigate  
  If board concurs, Attorney General directed to ask district Ct. to enjoin strike or lockout  
  If Court agrees, it issues injunction  
  Board monitors negotiation for 60 days  
  Next 15 days NLRB holds election to see if workers accept offer  
  5 more days to certify results  
  If no settlement President forwards info to Congress for action/inaction  

 
Internal
Links

Top
 Outline on the  Economy & the Social Sciences
External
Links
  -  Project:  Economics & Bargaining
Link
  ECONOMIC SYSTEMS PRODUCE & DISTRIBUTE GOODS   
 
 Economic systems are the means by which scarce resources are produced & allocated w/in & btwn societies
 
  An important factor of economic systems is the level of economic development denotes how goods & services are produced, as well as how much can be produced  
 
 An important factor of economic systems is ownership in relation to the nature & extent of private & public property, & ownership of the means of production  
 
 An important factor of economic systems is scale, which ranges from local production, to regional production, to national production, to international production, to globalization
 
  MARKET CONCENTRATION IS AN INEVITABLE OUTCOME OF CAPITALISM   
  The economic phenomenon called market concentration is aka Pac Man Economics (PME):   
  PME:  aka:  Market Concentration
 
  - an industry begins w/ many small producers
 
  - as one or several gain advantage, they, like Pac Man, steadily munch up the competition, growing bigger as each competitor is consumed
 
  - ultimately, one producer consumers all or nearly all of the competition, establishing a monopoly
 
  See Also:  Market Concentration  
  The growth & maturation of most industries follows a general pattern
 
  During an industry's infancy, production is diffused among many small producers
 
  During an industry's infancy, production is often labor intensive
 
  An infant industry develops & grows when:
 
  - consumer preferences are revealed, choosing one or several producers over others  
  - some producers gain an advantage & become more efficient & profitable
 
  - some producers become disadvantaged & lose money & go out of business
 
  - as production methods become standardized, capital & cheaper labor are substituted for skilled craft work
 
  - marginal producers are driven from the industry
 
  Over time, an industry becomes dominated by a relatively few firms
 
  The less dominant firms either mimic the leader or occupy niches
 
  Examples of dominant firms becoming monopolies or near monopolies include  
  -  Carnegie Steel  
  -  Standard Oil  
  -  ITT  
  -  Intel
 
  -  Microsoft  
  -  Walmart
 
  UNIONS HAVE GREAT DIFFICULTY ADAPTING TO GLOBALIZATION & MKT CONCENTRATION   
  The market concentration or Pac Man Economics (PME) that is inherent in capitalism makes it difficult for unions to respond to ever bigger businesses  
  In general the structure & strategy of the Labor Movement responds to the structure & strategy of business  
  W/ the exception of the Great Depression, unions usually suffer during an economic downturn
 
  During a depression or econ downturn, mgt can more easily find non union substitutes
 
  The 1980s & 90s have also tested union job security because of the generally weak econ conditions for wkrs
 
  In the late 90s & early 00s, there was is now some strengthening of the econ for average wkrs, but by 2002, conditions were worsening again
 
  Global competition has made it difficult to increase wages as seen in the fact that average wages fell 1/2 % in 05
 
  The Fed Res Bank found that it could let unemployment go to record low levels, e.g. circa 3 or 4 %, & still not have wage increases because the pressures of immigrant labor, globalization, deindustrialization, & technology has deflated wages during most of the 80s, 90s, & 00s  
  THE ECONOMY HAS GONE THROUGH VARIOUS PERIODS OF REGULATION & DEREGULATION   
  The Sherman Anti Trust Act of 1890 & the Clayton Anti Trust Act of 1914 had limited industrial concentration & collusive activities btwn producers in a single industry  
  The limitations on the size & mkt share of businesses have in many senses been removed since the 1980s in response to govt dereg which was a response to global competition  
  Excessive industrial concentration is not defined by the statutes, but by the courts or the FTC
 
  Price fixing, selling below costs, & other collusive activities are now illegal & have been prosecuted 
 
  Monopolies were broken up from Standard Oil to ATT 
 
  Regulation of certain industries has been a tradition in the us for over a century
 
  The Interstate Commerce Act of 1887 regulated interstate rail freight rates & has since been applied to other industries
 
  The regulation of industry as established via the ICA & related legislation, & the Sherman Anti-Trust Act of 1890 & the Clayton Anti-Trust Act of 1914 have eliminated some monopolies, while allowing some monopolies to exist, & regulating some oligopolies  
  Deregulation began in the 1970s w/ the Carter admin  
  Since the Reagan admin, 1980 - 88, federal regs in the area of the reg of monopolies have been reduced or eliminated
 
  The initial result of deregulation was the elimination of monopolies & the restoration of price competition
 
  Deregulation enabled new companies to enter & created competition in wages btwn union & nonunion sectors of industries  
  Deregulation has had varying effects across industries & job markets
 
  - W/ deregulation in the airlines, mechanics were not affected much because they could get jobs in other sectors
 
  - W/ deregulation in the airlines, pilots & stewardesses lost wages
 
  - W/ deregulation, some airlines lost money & went out of business, & the mkt was opened up to new carriers such as Southwest
 
  - W/ deregulation in the airlines, ticket prices declined at first; rural areas & low volume areas lost coverage  
  W/ deregulation in trucking, the number of unionized truckers went down, wages fell by 27%, ROE fell 22%
 
  See Also:  An Overview of Globalization  
  Deindustrialization  
blank
 CONSUMER DEMAND HAS INCREASED & BECOME MORE DIFFERENTIATED
blank
blank
 Since 1950 there has been a shift in the 1st World from goods to services because
 blank
blank
 -  the goods market has generally been saturated
 blank
blank
 -  people have the disposable income to consume services such as travel & entertainment
 blank
blank
 -  an older population desires more services
 blank
  -  service industries have developed & become more efficient & affordable for the middle classes  
blank
 The Labor Movement has historically been concentrated in the goods producing sector, & has been slow to organize the service producers
 blank
blank
 The aggressiveness of employers since the Reagan Era has also made it difficult for Labor to move into the new service sectors
 blank
blank
 The shift in the econ to the service sector & the maturation of the goods producing sector has created more jobs w/ low & high skills; i.e., medium range skill jobs have been eliminated
 blank
blank
 Lower skill jobs are hard to organize because:
 blank
blank
 -  workers are easily replaced 
blank
blank
 -  it is difficult to recoup organizing costs on low wage jobs 
 blank
blank
 Higher skill jobs are hard to organize because: 
 blank
blank
 -  professionals are independent minded & have an ideology opposed to unions because they view it as blue collar 
 blank
blank
 -  professionals are highly paid & so see little benefit in a union 
 blank
blank
 EMPLOYER INTERESTS HAVE EXPANDED, SLIGHTLY, TO INCLUDE STAKEHOLDERS 
blank
blank
 Private sector firms are ultimately answerable to their shareholders 
 blank
blank
 Though today many firms consider other stakeholders such as 
 blank
blank
       Labor 
 blank
blank
       The Community 
 blank
blank
       The Environment 
 blank
blank
       The Consumers 
 blank
blank
       The Govt 
 blank
blank
       etc. 
 blank
blank
 Shareholders seek a higher risk adjusted return than other investments 
blank
blank
 As environmental conditions change, e.g. a shift from producer to service economy, etc., a firm may shift production & labor 
 blank
blank
 Firms leave previous markets & enter new ones 
 blank
blank
 The historic increase in mergers & acquisitions since the 1980s reflects the mobility of capital 
 blank
blank
 A firm can spin off a lower earning division, forcing unions to deal w/ successor owners 
 blank

 
Internal
Links

Top
 Outline on the Interstate Commerce Act, 1887
External
Links
  Regulation of certain industries has been a tradition in the US for over a century  
  Interstate commerce includes all commercial transactions that cross from one state to another  
  A trip, the shipment of goods, or sending a message may be interstate commerce  
  In its broadest sense, however, interstate commerce has come to mean all dealings & affairs that concern more than one state & have a real & substantial relation to the national interest  
  Commerce carried on w/in the borders of only one state is called intrastate commerce  
  Throughout US hist, there have been many disputes, laws, & court decisions concerning the reg of interstate commerce  
  A clause in Article I of the U.S. Constitution, called the "commerce clause," gives Congress the power to "regulate commerce w/ foreign nations & among the several states.  ..."   
  Interpretations of the language of the commerce clause by the Supreme Court gives Congress broad regulatory powers  
  On the basis of the commerce clause, the fed govt regulates many econ activities  
  Both states rights conservatives & strict interpretationists of the Constitution would like to reverse the commerce clause to give states more power & independence, & to prevent the Supreme Ct from exercising power, respectively  
  Regulated econ activities include child labor, minimum wages & hours, mfr, transportation, communication, & racial discrimination in the use of public accommodations  
  The Departments of Justice & Labor & several fed agencies enforce interstate commerce laws  
  In some cases, the states may pass local laws affecting interstate commerce  
  State regulations are permissible if they do not conflict w/ fed laws & do not create an excessive burden on interstate commerce  
  The commerce clause corrected a weakness of the Articles of Confederation, under which the first govt of the US operated  
  The Articles, adopted in 1781, lacked power to regulate commerce  
  Under the Articles each state set up various taxes, tariffs, & trade restrictions that would give it an advantage over the other states  
  Delegates to the Constitutional Convention of 1787 were convinced that the nat govt needed some central control over commerce  
  The Constitution they wrote provided that the US Congress would have sole authority over interstate & foreign commerce  
  Although the Constitution gives Congress the power to regulate interstate commerce, it does not define the word commerce  
  As early as 1824, the Supreme Court gave a broad interpretation to the commerce clause  
  In the case of Gibbons v. Ogden, the court stated that commerce was not limited "to traffic, to buying & selling, or the interchange of commodities ... but it is something more.  ... It describes the commercial intercourse between nations, & parts of nations, in all its branches, & is regulated by prescribing rules for carrying on that intercourse."  
  The Supreme Court has used this definition of commerce to uphold the constitutionality of many interstate commerce laws  
  The Interstate Commerce Act ( ICA ) was passed in 1887  
  The ICA marked the beginning of extensive fed govt reg of interstate commerce  
  The act was designed to prevent discrimination & abuses by railroads  
  The ICA established the Interstate Commerce Commission ( ICC )
 
  Originally the ICA was meant to regulate interstate rail freight rates, but now applies to many industries such as communications, banking, petroleum, natural gas, electric utilities, trucking, airlines, et al
 
  Congress intended for the ICC to reduce or eliminate price discrimination btwn small & large shippers & to maintain incentives for transportation companies to provide service to rural areas
 
  The regulation of industry as established via the ICA & related legislation, & the Sherman Anti Trust Act of 1890 & the Clayton Anti Trust Act of 1914 have eliminated some monopolies, while allowing some monopolies to exist, & regulating some oligopolies  
  The ICA limited both the use of different rates for the same service & any agreements that set standard prices in the industry  
  The ICC was the first federal regulatory agency & served as a model for future agencies  
  The ICC's authority was later extended to most forms of interstate transportation on land & water.   
  The first railroads had begun to operate in the US during the early 1800s
 
  By the mid 1800s, a number of railroad companies had grown strong by merging w/ other railroad firms & by adding new routes
 
  These railroads provided faster, cheaper, & more efficient service than other systems of trans
 
  People & industries increasingly began to rely on railroads & greatly reduced the use of highways, rivers, & canals for commerce
 
  During the 1860s, many railroads began to abuse their favored position
 
  Some railroads that had a monopoly on the service to a particular town charged unfairly high rates for that service
 
  Rival railroads sometimes agreed among themselves to charge comparable rates that far exceeded the costs of certain services
 
  Higher rates were sometimes charged for shorter hauls than for longer hauls over the same route
 
  Many railroads charged lower rates to shippers who gave them large amounts of business than to farmers & other small shippers even though the service was similar
 
  Public demands for an end to the unfair business practices of railroads steadily increased
 

 
Internal
Links

Top
   Outline on    Globalization
Internal
Links
  -  Project:  Globalization & the Standardization of Culture 
Link
 
 GLOBALIZATION IS THE INTERCONNECDTEDNESS OF DIFFERENT PARTS OF THE WORLD THROUGH ECONOMIC, ENVIRONMENTAL, POLITICAL, CULTURAL, ETC. CONVERGENCE ( CHANGE ) 
 
 
 Globalization is a trend whereby production, competition, & economic exchange increasingly occur on a worldwide scale
 
 
 Given the impact of globalization, there is almost no remote place on Earth
 
 
 The effects of globalization include the growth of multinational corps., an increase in international trade, the creation & mystification of global content, the internationalization of capital markets, the creation of nascent world govt. & global regulatory agencies, the homogenization of culture, creating a global western culture, and the polarization of culture, creating a clash of cultures aka, cultural wars
 
 
 See Also:  The Effects of Globalization   
  Globalization has been going on since international trade began  
  Wallerstein's world systems theory views world capitalism as beginning in the middle ages as the Europeans began their "Age of Exploration" & such nations as Italy, Spain & Portugal became world powers based on international trade & colonization  
  The trend of international trade & globalization is in a period of unprecedented acceleration  
  Researchers Chase Dunn, Kawano, & Brewer (2000) found that world trade, in relation to domestic production, grew rapidly over a 160 yr. period during the 1800s & 1900s  
  Researchers Chase Dunn, Kawano, & Brewer found that the long term trend of globalization, there are three distinct surges of globalization:  
  - about 1845 to 1880  
  - about 1900 to 1925  
  - about 1970 to present  
 
 Economics & culture are perhaps the strongest globalizing forces
How?
 
 
 The global economy is specializing through locational flexibility
 
 
 The global economy is specializing in that some countries or regions through:
- extracting raw materials
- processing raw materials
- mfring the raw materials into parts
- assembling parts
- consuming finished good
 
 
 - Examples of globalized production include the Plastic Hoover vacuum & the Ford "World Car"
 
 
 There are over 800 mm people who are tied directly to global mkt in US, Europe, & Japan
 
 
 The core nations have totally globalized economies & many other peripheral & semi peripheral countries are partially globalized  
 
 Global culture(s) are rising & falling
Strong cultures are infectious
Which culture is the most well known word in the world? 
 
 
 Global forces are so powerful, they are affecting the global env
 
 
 THERE ARE FIVE FEATURES OF THE GLOBAL ECONOMIC & CULTURAL SYSTEMS INCLUDING:  COMPLEMENTARITY, INTL DIV OF LABOR, ECON OF SCALE, TRANSFERABILITY, DIFFUSION
 
  The features of global econ & cultural systems include   
 
 1.  complementarity, which occurs when demand in one place is complemented by supply in another
 
 
 2.  the international division of labor, which is the specialization of labor by country
 
 
 3.  economies of scale, which are efficiencies created by world scale operations
 
 
 4.  transferability, which is the ability to move capital, skills, technology, or products creates deindustrialization in the core & economic development in the periphery
 
 
 5.  spatial diffusion, which is expansion, relocation, hierarchical:  the way things spread through space over time
 
  FACTORS AFFECTING GLOBALIZATION INCLUDE TECH SYS, CONSUMER MKTS, DIV OF LABOR, & FINANCE  
 
 There are FOUR factors affecting globalization & local economic development, including the international 
 
 
 1. technical systems, which today are almost all international in scope
 
  2.  consumer markets, which today are characterized by global patterns of consumption as seen in people around the world who enjoy McDonalds, Coke, etc. 
 
 
 As late as the 70s only a few peripheral nations were open to intl trade & only 33 % of the wkrs in centrally planned econs:  SU, China, etc.
 
  As late as the 70s in the core countries only 33 % of the wkrs were not in the world sys because of trade barriers, etc.  
 
 In the 00s, only 10% of the entire world's wkrs are outside of the global econ
 
 
 3.  division of labor, which today results in complex & simple products being constructed w/ parts from several nations, assembled in another nation, & sold in another  
 
 4.  finance, which operates 24 hrs a day following the business day in Am, Japan, Asia, & Europe  
 
 Americanization is a powerful quality of globalization  
  GLOBALIZATION THEORIES INCLUDE SUSTAINABLE DEV TH, MODERIZATION TH, DEPENDENCY TH, & WORLD SYS TH  
  Sustainable development theory examines how nations can encourage economic growth in a way that will benefit those nations & their people and not just multinational corporation in a manner that can be sustained over the long run w/o further damage of the environment  
  Sustainable development theory asks who really benefits when international corps build plants or extract natural resources in developing countries  
  Modernization theory examines how both the corporations & those who live in developing countries benefit because of the jobs & new markets that are created by the investment of multinational corps.  
  Dependency theory argues that corporations take wealth out of the developing countries & gain control of resources that could otherwise have been developed & benefited from by the people living in the countries  
  World systems theory holds that all of history may be understood as a conflict btwn three sets of nations, the core, the semi periphery, & the periphery, all of whom may form strategic alliances to further their own interests  

 
Internal
Links

Top
 Outline on  Labor Economics
External
Links
  -  Project:  Elasticity & Bargaining 
Link
  -  Project:  Elasticity & Bargaining btwn Delta & the Pilots 
Link
  THE UNIONIZED WKPLACE HAS HIGHER PRODUCTIVITY
 
  Higher wages are an immediate, visible cost of unionization 
 
  Some pro worker regulations reduce productivity: 
-  shorter hours 
-  safety 
-  limits on mechanization 
-  etc. 
 
  Unionized workplaces, in general, have higher productivity 
 
  -  The unionized workplace is 24% more productive than the non unionized workplace 
 
  -  A unionized industry is 30% more productive than the non unionized industry 
 
  -  Production wkrs in the unionized workplace create an 11% increase in quality 
 
  -  Union wkrs in private sector create a  51% increase in productivity 
 
  -  Construction industries may have increased productivity benefits from a union 
 
  -  Non production wkrs in the unionized wkplace show an 8% decrease in quality 
 
  -  Service industries may show the least benefit from unionization 
 
  Labor productivity has grown more slowly in US than in other industrialized countries 
 
  But the US was the only country to have it's mfring sector increase in size 
 
  This is where productivity growth is the most difficult   
  Union wkrs are economically superior because   
  -  they have more experience   
  -  they have more training   
  -  they have more education   
  -  they have more commitment   
  -  they have a lower turn over rate   
  COMPANY LOYALTY IS MORE EFFICIENT THAN A REVOLVING DOOR 
  A revolving door policy is not as efficient as company loyalty   
  Company Loyalty means the firm must use a strategy of investing in workers rather than pursuing other strategies   
  Firms must invest in labor by investing in training, education, re employment, etc.   
  Unions reduce wage dispersion w/in firm   
  Many believe a reduction in wage dispersion decreases competition among workers in a firm   
  But a reduction in wage dispersion increases cooperation & results in increased productivity because:   
  - wkrs can share information   
  - wkrs spend less time on negative competitive behavior   
  - more wkrs are willing to train / mentor other wkrs   
  - wkrs are willing to help & wk w/ other wkrs because they understand that the wk situation becomes "all for one, & one for all"   
  In spite of union based job security, or not, some wkrs will become lazy:   
  -  but this is a function of individual & social factors   
  -  because of the culture of the firm, i.e. does the org culture in the firm support skating, etc.?   
  Profitability   
  Overall, unionized firms are less profitable   
  Increased productivity of unionized workers does not carry over to non unionized workers in the same firm   
  Shareholder value is decreased by unionization   
  While union firms are more productive, they are less profitable because the wkrs take a larger share of the value created   
  LABOR IS DERIVED DEMAND  
  As the circular model of economics indicates, 
 
  -  labor is necessary to produce & sell goods & services 
 
  -  sales depend on aggregate demand 
 
  -  the demand for labor is derived from sales demand 
 
  THE ELASTICITY OF DEMAND FOR LABOR INDICATES HOW MUCH DEMAND CHANGES IN RESPONSE TO DETERMINATIVE FACTORS   
  Elasticity is the degree to which related factors change as each changes   
  The elasticity of the demand for labor indicates how much the demand for labor will change if wages change, or if prices for products change   
  A high level of elasticity for labor means that if wages change a little, or if prices for products change a little, this will have a large impact on the demand for labor   
  A low level of elasticity for labor means that if wages change, or if prices for products, this will have little or no impact on the demand for labor   
 
 The FOUR factors affecting the elasticity of the demand for labor include the: 
 
  a.  level of necessity of the labor in the produce; i.e. can the labor be replaced through technology or deskilling? 
 
  b.  elasticity of the consumer demand for the product 
 
  c.  fraction of the total cost of product or service incurred by labor costs 
 
  d.  elasticity of the supply of competing production factors such as technology   
  Employers are unlikely to resist wage increases in skilled trades, in relatively small bargaining units, where substitutes are not available, & where price has little influence on sales 
 
  An elastic labor supply occurs when the employer is small & / or there is unemployment 
 
  An elastic labor supply means that hiring more workers will have little effect on the wage rate 
 
  Employers are likely to resist wage increases in unskilled trades, in relatively large bargaining units, where substitutes are available, & where price influences on sales 
 
  An inelastic labor supply means that several employers are hiring the same type of labor at the same time, unemployment is low 
 
  An inelastic labor supply means that a wage increase will be necessary to obtain a larger supply of labor 
 
  This can only be done where employers are able to pass on the wage cost to the consumer, i.e. in a noncompetitive product market 
 
  Employers often view labor in the short run & as a variable cost:   
  -  when more workers are needed they can be hired   
  -  when fewer workers are needed, they can be fired   
  THE UTILIZATION OF THE SUPPLY OF LABOR IS DETERMINED BY MACRO ECON FACTORS SUCH AS THE UNEMPLOYMENT RATE & MICRO ECON FACTORS SUCH AS TECHNOLOGY SUBSTITUTION W/IN A FIRM   
  The amount of labor used is determined by   
  -  the price of the product   
  -  the elasticity of demand of the product   
  -  the firm's productivity   
  -  the firm's capital investment in technology, plants, etc.   
  Additional wkr will be added until the wage rate equals the value of the additional products produced   
  The marginal revenue product is the amount of the product times the price  ( MRP = Q x P )   
  Additional wkrs will be added until the wage rate equals the marginal revenue product   
  In the short run, the MRP declines because the employers uses a fixed amount of capital   
  Generally the employer will seek to fully utilize factory & machine resources   
  In concentrated industries, the product demand is never completely elastic as it is in competitive industries because each firm's production is a large share of the market, which is saturated   
  In concentrated industries, the labor demand is also less elastic   

 
Internal
Links

Top
 Outline on Labor Capital Substitution
External
Links
  THE ISSUE OF LABOR CAPITAL SUBSTITUTION EXAMINES THE MIX OF INPUTS THAT ARE USED TO PRODUCE GOODS & SERVICES   
 
 Generally the inputs for the production of goods & services include: 
-  natural resources 
-  raw materials 
-  energy 
-  knowledge & skills 
-  technology 
-  admin 
-  labor 
-  capital goods such as factories, machines, equip, etc. 		  
  One of the critical issues in the mod world econ sys today is the particular mix of labor & capital goods used to produce goods & services  
  Generally, one can choose to use more labor & less capital goods or vice versa  
  The major strategy in the development of global capitalism has been to substitute capital for labor, thus continually finding techniques to keep labor from becoming a critical & precious factor in production  
  Thus the Labor Mvmt has continually struggled against industries which substitute capital for labor, resulting in lay offs & a reserve army of labor  
  One of the main issues in the substitution of capital for labor has been the ability of owners to control capital, & thus control labor  
  CAPITAL IS ANYTHING THAT PRODUCES INCOME, & ECONOMISTS GENERALLY SEE PHYSICAL, HUMAN (LABOR), & FINANCIAL CAPITAL AS THE PRIMARY INPUTS   
  Scottish economist Adam Smith defined capital in his book The Wealth of Nations (1776) as anything that produces a "stream of income" over time for individuals or communities  
  Economists still use the word capital to mean anything that produces, even though the definition makes little distinction btwn the various means of production, such as machines, factories, the money used to purchase them, etc.  
  There are three principal kinds of capital: (1) physical capital, (2) human capital, & (3) financial capital  
  1.  PHYSICAL CAPITAL REFERS TO INPUTS THAT ARE APPLIED DIRECTLY TO PRODUCTION & THAT ARE THEMSELVES PRODUCED   
  Capital goods may be defined as human made resources used to produce goods & services  
  Capital goods include factories, buildings, machinery, tools, & other goods that provide productive services over a period of time but exclude labor, land, & other inputs of production  
  Capital goods are goods which do not directly satisfy human wants  
  2.  HUMAN CAPITAL REFERS TO LABOR, THE PRODUCTIVE SKILLS OF WKRS, THE PRODUCTION KNOWLEDGE OF WKRS   
  According to some estimates, at least half of the total capital in the world consists of human capital  
  Investments in human capital take the form of education, job training, or work experience  
  Economists consider these investments an important source of econ growth  
  To limit confusion, economists often use the word capital to refer to physical capital, human capital, or both, but not to financial capital  
 
 Thus the consideration of labor capital substitution is the consideration of one type of capital for another:  human for physical & vice versa
Henceforth human capital will be referred to as labor		  
  Labor is the work human beings do to produce goods & services  
  All industries require labor  
  However, some industries require far more money for labor than for other inputs, such as machines or materials  
  Such labor intensive industries include accounting, law, & most other service industries  
  The quantity of labor available to industry depends on several factors  
  The factors on the quantity of available labor include the size of the population, the proportion of the population working or seeking work, & the hours each person works  
  Labor also varies in quality  
  People differ in their inherited abilities & acquired skills  
  For these reasons, labor differs in what & how much it can produce & in how skillfully it does its work  
  Education & training can increase a wkr's skills  
  But ed & training, like the accumulation of capital goods, require a present sacrifice to gain an expected future benefit  
  Because the enhancement of labor require sacrificing in the present for a future benefit, the skills of the labor force are often referred to as human capital  
  3.  FINANCIAL CAPITAL CONSISTS OF THE FUNDS THAT FIRMS SPEND TO PURCHASE OR RENT EQUIPMENT & LAND & TO HIRE LABOR   
  There are several other common uses of the word capital  
  For example, the term capital mkts refers to mkts in which various financial assets, such as stocks & bonds, are traded  
  Likewise, financial economists often use the capital asset pricing model to explain the risk & reward tradeoffs that are reflected in stock prices  
  International purchases & sales of various financial assets are recorded in a country's capital account, one of two principal categories in the country's balance of payments  
  The other, the current account, reflects the country's international purchases & sales of goods & services  
  Working capital is financial capital that is used to hire workers, buy supplies, pay bills, etc.  
  The use of resources to produce capital goods is called investment  
  Capital is also often used to refer to money that available for investment  
  EXAMPLES  
  In a bakery, the oven is a capital good, & the flour & yeast may be considered as either nat resources in the form of raw materials or even as a capital good  
  In the auto industry, the plant is a capital good, all the equipment in the factory is a capital good, the steel, plastic, wire, tires etc. are the raw materials which were produced from nat resources of iron, oil, copper, rubber, etc.   
  In the software industry, the computers are the capital goods & the internet is the infrastructure  
  In each case, the workers have knowledge & skills which they provide to the owner for a wage or salary  
  Some industries require a large investment in capital goods in relation to other expenses  
  Such capital Intensive industries include the electric power & the petroleum industries  
  THE ISSUE OF LABOR CAPITAL SUBSTITUTION IS THAT DEPENDING ON THE MKT FOR EACH, A BUSINESS MAY FIND IT ADVANTAGES TO USE MORE  OF LABOR THAN CAPITAL, OR VICE VERSA   
  The standard strategy in the global econ sys today holds that to increase production, industry must acquire more capital goods  
  However, the production of capital goods uses inputs or resources  
  To develop its industry, a nation must first use some resources to produce capital goods  
  Industry must give up the other goods that those resources could have produced.  
 
 The history of the conflict btwn labor & capital substitution is long, conflicted, & sometimes violent, as seen in the ignominious history of the Luddites, Saboteurs & other grps
 
 
 -  Luddites  
 
 -  Saboteurs  
 
 Both labor & capital are required to produce products & services, & typically they are owned by the workers & the owners, respectively
 
 
 In the modern capitalist system, owners are distinguished by the fact that they own capital
 
 
 In the modern capitalist system, workers are distinguished by the fact that they do not own capital
 
  Often, workers have nothing to sell but their labor power  
 
 Owners have an interest in moving their capital in & out of markets rapidly & in being able to change the capital labor mix
 
Link
 Example of substituting capital for labor
 
Link
 Example of substituting labor for capital 
 
 
 Owners would like to change the capital labor mix whenever a different combination would improve profits
 
 
 Changes in capital are generally based on long run payoffs
 
 
 Changes in labor are generally based on short term payoffs
 
  EMPLOYMENT LEVELS ARE MORE ELASTIC, I.E. THEY CHANGE MORE,  IN COMPETITIVE MKTS THAN IN CONCENTRATED MKTS  
  The Figure:  Effects of Product Mkt Concentration on Employment When Demand Changes demonstrates that when demand changes the supply of labor demanded will change in response, & that when demand changes, the needed supply of labor changes more in competitive industry than in concentrated industry   
  Competitive mkts are more elastic than concentrated mkts which is to say they are more sensitive to change & adapt to change more   
  Competitive mkts w/ changes in demand show a greater effect on the supply of labor so that when demand goes up, employment rapidly goes up; when demand goes down, unemployment rapidly goes up   
  Concentrated mkts w/ changes in demand show a lessor effect on the supply of labor so that when demand goes up, employment goes up slowly; when demand goes down, unemployment goes up slowly   
 
 Labor contracts fix wages & hours, & restrict layoffs, making labor costs less changeable in the short run possibly leaving owners w/ suboptimal combinations
 
 
 All other things being equal, if wages increase, an owner can be expected to increase the use of capital
 
 
 But in the real world, this is difficult because capital, in the form of technology, machines, factories, etc. is fixed in the short run
 
  IN THEORY, EACH BUSINESS HAS AN OPTIMAL MIX OF CAPITAL & LABOR AT A GIVEN TIME IN A GIVE MKT, BUT IN PRACTICE MANY OTHER FACTORS THAN ECONOMICS IMPACT THIS MIX   
 Link
 The Figure:  Capital Labor Trade Offs When Wages Increase demonstrates that , given a fixed budget, there is always an optimal mix of capital & labor which will maximize profit ( best mix of output & cost )
 
  All other things being equal, increasing the cost of  capital or labor, will reduce the profit
 
  All other things being equal, increasing the cost of capital will result in an increased use of labor
 
  All other things being equal, increasing the cost of labor will result in an increased use of capital
 
  But because capital & labor each have their own, unique supply markets, substituting one for another is not always a given
 
  Capital mkts are influenced by the stock markets, the private investors market, the bond markets, etc.
 
  Labor mkts are influenced by unemployment, immigration, unionization, skills levels, etc.
 
  The govt often subsidizes the substitution of capital for labor through several common monetary & fiscal policies  
  One govt policy which favors capital over labor is  
  -  tax breaks for capital depreciation  
  Note that training & education costs for labor are generally not tax deductible  
  -  low interest rates for borrowing money to buy capital goods  
  -  tax deductions for interest paid on money to buy capital goods (or for two homes)  
  In the modern sys of global cap, there is an inexorable trend of the substitution of capital for labor  

 
Top
  
Example of substituting capital for labor

Buying larger trucks so fewer drivers are needed.
Computerizing office work so less secretaries are needed
Building a new factory instead of hiring more wkrs
Using newer, more expensive, faster tech or mech instead of hiring more wkrs


 
Top
  
Example of substituting labor for capital

Paying overtime instead of buying bigger equipment
Hiring extra workers instead of buying bigger equipment
Running longer shifts instead of buying newer, faster equip


 
Top
  
Figure: Effects of Product Market Concentration on Employment When Demand Changes 

The Figure:  Effects of Product Mkt Concentration on Employment When Demand Changes demonstrates that when demand changes the supply of labor demanded will change in response, & that when demand changes, the needed supply of labor changes more in competitive industry than in concentrated industry

 
Top
  
Figure: Capital - Labor Trade Offs When Wages Increase

The Figure:  Capital Labor Trade Offs When Wages Increase demonstrates that, given a fixed budget, there is always an optimal mix of capital & labor which will maximize profit ( best mix of output & cost )

 
Internal
Links

Top
 Outline on Labor Markets
External
Links
  There are many types of  labor mkts including external, internal, & international   
  An external labor mkt is the supply of workers in the population at general who are not from w/in the org that is seeking workers   
  An internal labor mkt is the supply of wkrs from w/in the org that is seeking wkrs   
  The international labor mkt is a special type of the external labor mkt. that includes wkrs from outside of the nation in which the org is located   
  The supply of a labor mkt is determined by 
 
  - the level of unemployment in general 
 
  - the level of unemployment in a specific labor mkt 
 
  - skills levels 
 
  - educational levels 
 
  - immigration levels 
 
  - the price offered for labor in the form of wages & salaries 
 
  Bureaucracies rely on rewards & inducements to control workers & one such methodology is to fill positions internally from w/in the org   
  Internal labor mkts are an important way in which bureaucracies motivate & control wkrs   
  Internal recruitment helps create the expectation of advancement, providing a source of motivation for employees   
  Internal recruitment reduces the costs of training new employees   
  Internal recruits are familiar w/ the orgs procedures, skills, & org culture   
  Wkrs enter an org at certain jobs that serve as entry ports   
Access to higher jobs is mainly through job ladders which start at the entry points   
  The spread of internal labor mkts has increased job tenure among wkrs   
  Nearly 40% of men, 30 or older, have jobs they expect to hold for 20 or more yrs, though that number is declining   
  Nearly 15% of women, 30 or older, have jobs they expect to hold for 20 or more yrs (Osterman, 1984)   
  Unions strive to acquire monopoly power over the labor supply 
 
  Unions are most attracted to firms that have power to influence the prices of its products because labor costs can then be transferred to consumers 
 
  Unions are also interested in highly profitable business sectors because they can absorb the costs & reduce profits 
 
  Contracting elasticizes the labor supply at the contracted rate ( assuming the wage premium is negotiated ) 
 
Link
 The Figure onMonopsony Wage & Employment Decisions demonstrates that large, monopsonist employers, who are unionized will hire no more workers than necessary to maximize profits 
 
  Under monopsonist, unionized conditions, large producers will maximize profits where the marginal supply ( MS ) of labor equals the marginal revenue product ( MRP )   
  See Also:  Monopsonist:  a single purchaser   
  The MS of labor is the additional, marginal, cost associated w/ adding more labor to the labor capital mix 
 
  Depending on the bargaining power of the union, it could negotiate a wage at any level up to the point where MS = MRP 
 
  The Figure on Monopsony Wage & Unemployment Decisions demonstrates that wages (W v) will be higher & employment (E) lower in a unionized setting where the industry has only a few large employers (monopsonist) such as in heavy industry   

 
Top
  
Figure on Monopsony Wage & Unemployment Decisions 

The Figure on Monopsony Wage & Unemployment Decisions demonstrates that large, monopsonist employers, who are unionized will hire no more workers than necessary to maximize profits 

 
Internal
Links

Top
 Outline on  Interests
External
Links
  An interest is those social relationships an individual or group judge to promote their general welfare   
 
 Interests are the fact or relation of being concerned in or connect w/ a thing through having a right or entitlement to it, or some claim upon it
 
  Interests are a right to a share in something   
  Interests are the relation of being affected by something in respect of advantage or detriment   
  Interests are the mainspring of one's motives; self interest  
  Interests are what a social actors judges or interprets as promoting their general welfare   
 
 In the social sciences, interests are based on material (economic), social (prestige, honor), political (power) benefit 
 
 
 One's interests are determined by person's relationship to means of production 
 
 
 Varying groups w/ varying interests could ally or conflict 
 
 
 Interests exist mostly below our awareness & thus are often an emotional experience 
 
 
 But we often try to rationalize, i.e., bring logical reasoning to consciousness 
 
 
 Marx & others point out that we need to make interests more apparent to ourselves & to others 
 
 
 People accept ideology of dominant groups in society & so accept their values & do not pursue their own self interests 
 
 
 For conflict theorists, values should be determined by, or at the very least, harmonious w/ one's interests 
 
 
 For conflict theorists, interests should be determined by one's values 
 
 
 But false consciousness prevents the correct interaction btwn interests & values because the interests of the ruling class come to predominate 
 
 
 The ideology of the dominant group / class is often the most prominent ideology 
 
 
 People accept the ideology of the dominant groups in society & so accept their values & do not pursue their own self interest 
 

 
Internal
Links

Top
 Outline on an  Intro to Class & False Consciousness
External
Links
  -  Project:  Class & False Consciousness 
Link
  CLASS CONSCIOUSNESS OCCURS WHEN GROUPS ACCEPT THE IDEOLOGY RELEVANT TO THEIR OWN INTERESTS
 
  Class consciousness is when subordinate groups do not accept the ideology of the dominant group, but accept ideology relevant to their own interests 
 
  Class consciousness is when a group of people embrace a culture / life- style that represents their own interests 
 
  An example of class consciousness is that the rich believe in their own superiority & the natural inferiority of the poor 
 
  An example of class consciousness is that the middle class believe in equal opportunity for all & not in the superiority of the rich & not in the natural inferiority of the poor 
 
  FALSE CONSCIOUSNESS OCCURS WHEN SUBORDINATE GROUPS ACCEPT THE IDEOLOGY OF THE DOMINANT GROUP & BELIEVE THINGS THAT ARE NOT IN THEIR OWN INTEREST
 
  False consciousness is when a group of people embrace a culture / life-style that harms their own interests 
 
  For Marx, when non upper class people accept the world view of upper class, they have false consciousness 
 
  An example of false consciousness is that the middle class indulging in consumerism, believing the rich are deserving, the poor are not deserving 
 
  An example of false consciousness is that during the 1972 Presidential race, McGovern, the Democratic candidate, proposed limiting inheritance to .5 mm & this position was opposed by the vast majority of people even though over 90%  wouldn't be affected 
 
  Class consciousness occurs when a group of people w/ a common self interest correctly perceive that interest & develop beliefs, values, & norms consistent w/ advancing that interest 
 
  The concepts of class & false consciousness do not denote correct & incorrect consciousness   
  Historically, the class & false consciousness Ideologies of some groups have been accepted as wrong by most observers   
  Marx saw the workers, i.e. the proletariat, as the only group capable of class consciousness 
 
  False consciousness is the beliefs, values, etc. that work against a group's / class' self interest 
 
  Both workers & owners can experience false consciousness 
 
 
 Many theorists believe this is the common condition today 
 
 
 For Marx, we have either class or false consciousness   
 
 For Marx, class consciousness develops out of working class experience/context   
  An important aspect of class is the extent to which a society has members who are aware of, & identify w/ the social classes to which they belong   
  Americans are less class conscious than people in other societies   
  Nearly all Americans think of themselves as "middle class" or "working class"   
  In many societies, the wealthy readily identify themselves as upper class   
 
 There are FIVE reasons the US has no class consciousness 
1.  The culture & ideology of the US is that of equal opportunity 
2.  The media & all social structures support the Horatio Alger Myth 
3.  The US has a relatively weak Labor Movement & no Labor Party 
4.  Education is tied to social class in the US 
5.  The US once had more structural mobility 
 
 
 1.  THE CULTURE & IDEOLOGY OF THE US IS THAT OF EQUAL OPPORTUNITY
 
  As a result of  the US's foundation on the counter value of rebellion against title & monarchy, & the dissemination of the Horatio Alger Myth, the US's ideology mystifies class status   
  American's prefer not to openly acknowledge their class status   
  Americans prefer to believe that people have similar statuses & similar situations in life; that we are all pretty much alike   
 
 2.  THE MEDIA & ALL SOCIAL STRUCTURES SUPPORT THE HORATIO ALGER MYTH 
 
  America's entertainment media, education system, all sectors of society, support the belief that anyone who tries can succeed, & that love will easily overcome social class differences btwn people   
  Examples of media support of false consciousness:   
  Pretty Woman   
  Dirty Dancing   
  White Palace   
  The Horatio Alger Myth supports false consciousness, preventing people from acting in their own interests   
      See Also:  The Horatio Alger Myth   
  The widespread presence of the Horatio Alger Myth, & similar ideological components in Am culture illustrates that it is in the class interest of the wealthy to promote the image of Am as a society where class doesn't really matter & where anyone can "make it"   
 
 When people perceive that there is not equal opportunity, they criticize the system & support change 
 
  When people have false consciousness, when they believe that anyone can succeed, they accept the system as fair & legitimate   
  As long as people have false consciousness, believe in the fairness of the system, they will not demand changes that threaten the wealthy & the powerful   
  It is in the interest of those w/ wealth, including ownership & control of the media, to promote the Horatio Alger Myth, the ideology that the system is open & fair   
 
 3.  THE US HAS A RELATIVELY WEAK LABOR MOVEMENT & NO LABOR PARTY
 
  There is evidence that people who question the ideology of fairness are treated more harshly in the US than elsewhere   
  For example Sexton, 1991, demonstrates that Labor Unions & Labor organizers were, & are, repressed more harshly in the US than in Europe   
  In the 1930s, the US used the military, police & private security companies to interfere w/ strikes, often w/ the use of violence & the hiring of strikebreakers was common   
  Today, the US has the most restrictive labor laws of any industrialized country, & has the least amount of both physical & labor rights protection   
  In Canada, all public employees have the right to organize, bargain, & strike, while in the US they may not strike, taking much power away from organization & bargaining   
  In the US, companies can refuse the contract of a newly certified union, demanding a recertification   
  In Canada, to form a union, unions need only submit signed cards from a majority of workers   
  While the process of using signature cards to obtain union certification is legal in the US, in practice, signature cards & most certification elections are contested   
  The lack of a Labor Movement means there has been no Labor Party in the US, resulting in a general weakening of the political left   
  Canada & most European countries have a major labor or "social democratic" party   
  In Canada & Europe income & vital services such as health care are more equally distributed   
  4.  EDUCATION IS TIED TO SOCIAL CLASS IN THE US   
  Because most educational systems are funded by state & local taxes, usually property taxes, educational systems are much more effective in more wealthy regions, enhancing their class consciousness   
  The upper class sends their children to private school, enhancing their class consciousness   
 
 5.  THE US ONCE HAD MORE STRUCTURAL MOBILITY, WHICH MEANT THAT CLASS RELATIONSHIPS, & HENCE CLASS CONSCIOUSNESS, WAS LESS APPARENT TO PEOPLE & ALSO LESS NECESSARY   
 
 The US had a rapidly expanding economy through the 1950s, providing ever more, higher paying jobs lessening the need for class consciousness   
  As the rest of the world has moved to a modern, industrial economic base, the US faces more global competition, resulting in less economic expansion increasing the need for class consciousness   
  Less economic expansion creates less jobs, which creates less structural mobility making class consciousness more necessary   

 
Internal
Links

Top
Outline on  Ideology
External
Links
  AN IDEOLOGY IS A WAY OF THINKING, A WORLDVIEW  
  An ideology is a  particular system of ideas, a characteristic way of thinking of a people, a group, or a person especially on social & political topics   
  An ideology is a system of thought based on related assumptions, beliefs, & explanations of social movements or policies   
  Ideologies are mental systems of beliefs about reality   
  An ideology may be understood as a "world view"   
  Ideology & culture are very similar in meaning.  The definition for ideology asserts that the knowledge, beliefs, & values shared by a society give legitimacy to the social structure   
  An ideology is a system of ideas that is pre conscious that often embodies a rationalization of motivations   
  IDEOLOGIES COMBINE ALL FACETS OF SOCIAL EXISTENCE  
  An ideology's content may be economic, political, philosophical, or religious   
  Some ideologies, such as communism & socialism, refer to econ & political systems   
  Other ideologies are capitalism, democracy, fascism, feminism, Protestantism, racism, Roman Catholicism, totalitarianism, & more   
  Ideologies do not rely equally on factual info in supporting their beliefs   
  People who accept an entire thought system usually reject all other systems concerned w/ the same content   
  To such people, only conclusions based on their ideology seem logical & correct   
  people strongly committed to an ideology have difficulty understanding & communicating w/ supporters of a conflicting ideology   
  Conflicting ideologies held by various nations, social classes, or religious groups have led to the world's greatest & most dangerous controversies   
  For example, World War 2 was largely a struggle btwn democratic & totalitarian nations   
  IDEOLOGIES HAVE SOCIAL POSITIONS, I.E. EXIST IN A HISTL CONTEXT  
  Ideologies have a "social position" in that they often support or justify a party, class, or group   
  Ideology & contextual knowledge:  Because we all have an ideology, & our own personal historical context true knowledge is impossible   
  Epistemology is the sociology of knowledge or how knowledge is socially created   
  Conflict theorists, Marxists, etc. believe that, narrowly speaking, consciousness, or broadly speaking, ideology, is shaped by the interaction of material ( working ) conditions & the dominant culture in which one finds oneself   
  A major focus of conflict theory is the examination of ideology which is a world view, including  knowledge, opinions, etc.   
  For conflict theorists, our ideology is that part of our culture of which we are generally, but not specifically aware   
  Ideology is important to conflict theorists because they seek an end to class domination, & to achieve that end, people must first understand that they are exploited, & desire to end that exploitation   
 
 Social scientists know that their is an interaction of ideology & social position, but they do not agree on how that interaction operates 
i
 
 The materialists believe that one's social position determines ideology 
 
 
 The idealists believe that one's ideology determines social position 
 
  The conflict theorist / Marxist view is that social position determines one's view of society, i.e., one's world view or ideology 
 
  Montesquieu first developed the concept of the "contextualization" of knowledge as seen in many contemporary theories of ideology   
  MARX:  CLASS DETERMINES CONSCIOUSNESS  
  Marx developed an analysis which held that class determines consciousness through a process that follows FOUR steps   
  a.  labor determines class   
  b.  labor & class determine consciousness   
  c.  what you do, determines how you think   
  d.  you are what you do   
  Marx developed an analysis which held that through the creative process of our labor, we develop an ideology which embodies the adage that "you are what you do"   
  CLASS CONSCIOUSNESS IS AN UNDERSTANDING OF YOUR OWN BEST INTEREST  
  Class consciousness occurs when a group of people w/ a common self interest correctly perceive that interest & develop beliefs, values, & norms consistent w/ advancing that interest   
  Class consciousness occurs when subordinate groups do not accept ideology of the dominant group, but accept ideology relevant to their own interests   
  THE DOMINANT CLASS' IDEOLOGY USUALLY DOMINANTS   
  The ideology of the dominant group or class is often the most prominent ideology   
  People accept the ideology of the dominant groups in society & so accept their values & do not pursue their own self interest   
  Much of social analysis concerns 
a.  the nature of the dominant group's ideology 
b.  why people accept the dominant group's ideology 
c.  how the dominant group's ideology is disseminated 		  
  STRUGGLES OCCUR OVER IDEOLOGY & MATERIAL RESOURCES  
  For many social theorists, culture, ideology, etc. cause conflict   
  For many social theorists, cultural belief systems, ideology, ethnicity & religion, can cause a lot of conflict  
  Ideological struggle has gone by various names such as: 
a.  the culture wars 
b.  the struggle for the hearts & minds 
c.  religious wars 		  
  When analyzing these ideological struggles, one must also examine material / economic struggles   
Link
 Examples of ideological & material struggles   

 
Top
  
Examples of ideological & material struggles 
Israeli - Arab conflict:  religion & land 
Black - White conflict:  some amorphous ideology of race/culture & equal opportunity rights 
Catholics & Protestants in No Ireland:  religion & land & equal opportunity rights 
PW

 
Internal
Links

Top
 Outline on  Employer Interests in the Workplace
External
Links
  The interests of employers are different from those of 
-  employees 
-  investors ( stockholders, partners, etc. ) 
-  managers 
-  union leadership 
-  union members 
& other important actors such as bankers, suppliers, etc. 
 
  Employers want to maximize long run profits on their investment in capital & their entrepreneurial initiative 
 
  Employers have a much higher commonality of interests than do wkrs, but their interests do vary to a certain extent depending on their env, structure, & strategy   
  Employers, given their unique position in the economy, their competition, & other factors may choose to pursue maximum profit, or increased mkt share, or growth of productive capacity, or maximum dividend payments, or some other short term goal   
  Domhoff notes that the interests of small business vary widely from those of corporate business   
  For Domhoff, 3 coalitions dominate the modern global capitalism soci political landscape & are constantly vying for power:  the corporate coalition, the small business coalition & the labor / liberal coalition   
  Investors diversify their risks across a portfolio while employees are generally unable to diversify their employment risks, being tied to a single occupation 
 
  Employers are interested in accomplishing the org's objectives, which in the private sector is to maximize long term profits 
 
  Employers want total influence in the workplace; cooperation from workers 
 
  Employers usually desire to prevent unionization 
 
 
 Employers desire to be able to resist a strike 
 
  Employers' bargaining power is enhanced by its ability to take a strike 
 
  EIGHT conditions influence the ability of an employer to take a strike, including 
1.  timing 
2. perishability 
3.  technology 
4.  replacement wkrs 		 5.  multiple locations 
6.  staggered contracts 
7.  integrated facilities 
8.  substitutions 
 
  1.  Timing: A strike will have less of an impact if it comes during the off season for the employer 
 
  Employers can resist the timing factor by have inventories or accelerating deliveries to customers prior to a strike 
 
  2.  Perishability:  If the product is perishable, this lessens the ability of the producer to take a strike 
 
  Perishability can include the opportunity of the employer to serve the customer:  a customers flight once lost cannot be regained or put on hold 
 
  3.  Technology:  If the production process is capital intensive, then a few employees or supervisors may be able to run the facility 
 
  4.  Availability of Replacement Workers:  Replacement workers may come from two sources:  inside the firm or outside the firm 
 
  a.  Internal replacement workers are non striking employees or supervisors   
  b.  External replacement workers:  The looser the labor mkt & the lower the jobs' skill level, the easier it will be for an employer to hire replacements 
 
  5.  Multiple locations:  An employer w/ several plants can continue to produce at the non struck plants 
 
  6.  Staggered contracts:  An employer w/ several different expiration dates on its labor contracts can continue to produce at the non struck plants   
  7.  Integrated facilities:  When separate facilities each encompass a stage in the production process, those facilities back in the production chain have more power over employers because a strike here can disrupt the rest of the process 
 
  The condition of influence by facilities back in the production chain has become more important as employers move to just in time inventories 
 
  8.  Lack of substitutions:  The employer's ability to take a strike increases if there are no substitutes for the org's outputs 
 
  In there are no substitutes for a firms outputs, & there is a strike, profits are not lost, only postponed 
 
  Example:  Education 
 
  Mgt seeks the highest profits it can achieve through investing its capital   
  Mgt shifts resources from product lines w/ lower returns to those w/ higher returns 
 
  To earn the highest profits by shifting resources, the firm needs to adapt, & being able to modify all the components of labor is key in that adapting 
 
  Ideally, mgt would prefer to be able to open, close, & retool plants as needed, hire labor on a flexible basis, or adjust wage rates to meeting changing mkt conditions 
 
  Employers are interested in flexibility in employment, in technology, capital investment, & all factors of production   
  But because even w/o unionization, this unconstrained adaptation is impossible, mgt seeks the cooperation of its wkrs 
 
  But to achieve cooperation, employee interests must also be taken into account 
 

 
Internal
Links

Top
 Outline on Employee Interests in the Workplace
External
Links
  -  Project:  Employee Interests for the DAPA
Link
 
 The interests of employees ( workers, technicians, professionals, etc.) are different from 
-  employers 
-  investors ( stockholders, partners, etc. ) 
-  managers 
-  union leadership 
-  union members 
& other actors in the env 
 
 
 In general, employees have a wider diversity of interests than do other actors in the orgl env 
 
  Domhoff notes that in the modern global capitalist system, there are three major actors:  the corporate coalition, the small business coalition, & the labor liberal coalition 
 
 
 In most cases there is a strong commonality of interests btwn the corporate coalition & the small business coalition though they may disagree on such issues as the minimum wage 
 
  The labor / liberal coalition rarely allies w/ either the corporate coalition or the small business coalition   
  Furthermore, the labor / liberal coalition is much more fractious than either the corp coalition or the small business coalition   
  Common factions w/in the labor / liberal coalition include labor, civil rights grps, women's grps, env grps, etc.   
  The Labor Mvmt itself is fractious as seen in the histl conflict among unions, w/in the AFL - CIO, the spin off of the Teamsters & other unions in 2005, & so on   
 
 Despite the fractiousness of the Labor Mvmt, employees do have some clear common interests 
 
  Employees want to maximize long run return on their investment in skills & the effort they exert in employment   
  Investors diversify their risks across a portfolio while employees are generally unable to diversify their employment risks, being tied to a single occupation 
 
  Employees' long run returns depend on job security & their wage rate 
 
  Employees want more influence in the workplace, which involves cooperation from mgt 
 
  Employee interests vary w/ the nature of the employment environment 
 
  If layoffs are rising, job security is more important than wage & fringe benefit improvements 
 
  Employees want job satisfaction, i.e., to avoid workplace alienation 
 
  See Also:  Job Satisfaction   
  See Also:  Alienation at work   
  See Also:  Alienation   
  Employee interests can often be met in the workplace, & forming a union an create bargaining power by monopolizing the internal labor supply, further advancing employee interests 
 
  See Also:  Union Membership 
 
  Employees are risk averse, since they receive no additional reward for taking risk while employers do generally receive a higher rate of return for riskier investment   
  But employees will accept lower pay if they can increase job security 
 
  Employees are generally not able to take risks because of the present nature labor relations 
 
  Employees generally are paid whether their firm makes a profit or not 
 
  However, more firms are instituting profit sharing plans, stock plans, etc., which do offer employees more risk & greater reward 
 
  Employees are also unable to take risk because human capital ( labor ) is not diversifiable; i.e., an employee can generally only work for one firm, & changing employers is costly 
 
 
 Employees are interested in earning more for their labor 
 
  To say that employees have common interests is not to say that they know what these interests are, or that they see the commonality of interests; therefore the goal for any union, or any soc mvmt is first to educate people on what their interests are, & second to educate them on their commonality of interests w/ others   
  To say that people have common interests, that they recognize these interest, & that they act in such a manner as to preserve & pursue common interests is to say that they have class consciousness   
  To the extent that people in a grp lack any of the three components of class consciousness, i.e. that they do not have common interest, do not recognize the commonality of their interests, or do not act on those interests is to say that they have false consciousness   

 
Internal
Links

Top
 Outline on the   Key Interest Groups by Domhoff
External
Links
  -  Project:  Key Interest Groups 
Link
  -  Project:  Key Interest Groups in the Envl Debate 
Link
  THE KEY INTEREST GROUPS INCLUDE CORPORATIONS, SMALL BUSINESSES, & LABOR / LIBERALS   
  According to Domhoff, 1983, there are three main interest groups trying to influence policy at the national level:   the corporate coalition, the small business coalition, & the labor / liberal coalition
 
  In 1990, there were more than 6,800 congressional lobbying groups in the US, however most of them tend to represent certain groups of interests, such as Domhoff three key interest groups
 
  In 2005, there were more than 14,000 registered lobbying groups in Washington, DC, averaging just over two employees each for a total over 30,000 lobbyists (many lobbying firms are small)  
  In 2005, there were approximately 30,000 members of Congress & staff members, making the ratio of lobbyists to officials on the Hill nearly 1 to 1  
  In the early 90s the total value of earmarks added to bills was under $100 mm, while in 2005 the value was over $32 bb  
  A.  THE CORPORATE COALITION INCLUDES THE LARGEST CORPS IN THE WORLD, MANY HAVING MORE ECON POWER THAN THE MAJORITY OF NATIONS   
  The corporate coalition include multinational corporations from around the world
 
  Also included in the corporate coalition group are policy foundations & research institutes that do not call themselves lobbyists, but claim to operate on the behalf of "good govt" or the "national interest"
 
  Examples of conservative policy foundations include the Ford, Rockefeller, & Carnegie Foundations, the Committee for Economic Development (CED), the Council on Foreign Relations (CFR), the Trilateral Commission, & the Business Roundtable
 
  Conservative policy foundations lobby for policies that promote free trade & polices that allow multinationals to operate in the world economy w/ minimum restrictions
 
  The North American Free Trade Act (NAFTA), the General Agreement on Trade & Tariffs (GATT), the US govt's support for the Maquiladores program are examples of the efforts of the policy institutes allied w/ the multinational corporations
 
  B.  THE SMALL BUSINESS COALITION INCLUDES ALL SMALL BUSINESSES, WHICH MAY BE WORTH MILLIONS OF DOLLARS, INCLUDING MANY PROFL ORGS   
  The small business coalition includes the Chamber of Commerce & national orgs of professions that operate as small businesses such as the American Medical Association (AMA), the American Dental Association (ADA), & the Farm Bureau
 
  The small business coalition is more conservative that the corporate coalition
 
  The small business coalition concentrates on opposition to govt regs of business
 
  The small business coalition is less involved in foundations & research institutes than corporate coalition
 
  The small business coalition does support the American Enterprise Institute & the Hoover Institute
 
  C.  THE LABOR / LIBERAL COALITION INCLUDES ORGANIZED LABOR AS WELL AS OTHER SOC MVMTS SUCH AS THE CIVIL RIGHTS MVMT, WOMEN'S MVMT, ENVL MVMT, & MORE   
  The labor / liberal coalition is a loose coalition & is the most diverse, & thus the most divided of the coalitions
 
  The labor / liberal coalition includes organized labor, feminists, the civil rights movement, the envl mvmt, et al
 
  Specific orgs w/in the labor / liberal coalition include the AFL CIO, the National Association for the Advancement of Colored People (NAACP), the Urban League, the National Association for Women (NOW), the National Education Association (NEA), the Sierra Club, Greenpeace, the Ralph Nader based orgs, et al
 
  Domhoff developed an analysis of the key interest groups that shows that, indeed, contrary to what pluralists believe, one group controls the govt, benefits from govt policy, & wins controversial issues  
  See Also:  A Comparison of Pluralist Theory & Power Elite Theory by Farley  

 
Internal
Links

Top
 Outline on Union Membership Interests in the Workplace
External
Links
  -  Project:  Interests in Bargaining 
Link
  WKRS' INTERESTS IN THE WKPLACE ARE OFTEN RELATED TO WAGES, EMPLOYMENT, UNION MEMBERSHIP, BENEFITS, SAFETY, JOB SATISFACTION, & MORE   
  The interests of employees ( workers, technicians, professionals, etc.) are different from 
-  employers 
-  investors ( stockholders, partners, etc. ) 
-  managers 
-  union leadership 
-  union members 
& other actors in the env
 
  Union members' interests are often very similar to employee's interests, but they can diverge since members are likely to be willing to compromise their individual interests for the interests of the whole  
 
 Employees unionize to obtain outcomes they believe are unavailable to them as individuals
 
  Members desire to have a major impact on union bargaining goals
 
  It has been suggested that contract demands reflect the preferences of the "median voter" in the unit
 
  The preferences of the median voter will, hopefully, reflect the preferences of more than a majority of the members
 
  The interests of the membership are represented democratically
 
  Local union officers are often elected by a single bargaining unit
 
  Bargaining success directly influences the ability of local union officers to be re elected
 
  If the bargain fails to represent the interests of the workers, then it is likely that the officers will not be re elected
 
  If officers serve several units then members interest are less effectively served
 
  Like employees, members desire better wages, hours, benefits, working conditions, etc.
 
  Members' interests also include those factors which will make the union stronger such as
-  increased membership
-  lower dues
-  greater solidarity
-  union effectiveness
 
  WKRS HAVE VARYING PREFERENCES FOR WAGES & EMPLOYMENT  
Link
 The Figure: Wage - Employment Preference Path demonstrates that wkrs do not value employment & wages equally across the spectrum at lower levels of wages & employment, more employment is preferred; at higher levels of wages & employment, more wages are preferred   
  For union members is often a trade off btwn wages & membership
 
 
 Generally, unions would be predicted to seek wage gain for present members before pursuing expanded employment
 
 
 Members generally do prefer increased wages over increased employment
 
 
 Thus, today union solidarity rarely takes preference over increased employment
 
 
 In the 1990s, give backs became more common  
 
 Give backs generally occur when the union agrees to wage cuts, & / or other benefits cuts  
  These wage cuts are almost always preceded w/ several rounds of lay offs, & often when they occur, they are often accompanied by lay offs  
  In Japan, where there is less individualism, employees operate in the opposite fashion: there are almost always cuts in wages before any lay offs are considered  
  Lay offs are seen as a last resort in Japan & Europe  
  Research in the US indicates that unions do not contract for additional employment  
  The Am preference of wages of higher general employment is the legacy of the GLC, Business Unionism, & the Corporatist Approach  
  When facing a cutback, senior members often prefer employment reductions in the form of lay offs for those w/ less seniority, to wage cuts  
  On the other had, if a bargaining unit faces the closure of a plant, even senior members are likely to chose wage cuts  
  Members desire to avoid a strike because usually, even w/ a wage increase, it takes a substantial amount of time before the workers recoup the lost wages of the strike  
  BARGAINING POWER IS AFFECTED BY WAGES, EMPLOYMENT, MKT CONDITIONS, SUPPLY OF LABOR, CAPITAL TRANSFERABILITY, & MORE   
  Members' bargaining power is affected by all of the same conditions that impact employers power & more:   
  Union members' bargaining power is enhanced by its ability to take a strike  
  Wage gains are higher where significant barriers to entry exist for new employers, industrial concentration is high, foreign competition is low, there is high union coverage by a dominant union
 
  Bargaining power is highest in occupations where the wkrs are employable in other industries
 
  Example:  The greater bargaining power of airline mechanics is seen in that they can work in other industries, while flight attendants cannot
 
  Bargaining Power increases when unions exert 
 
  -  control over the external labor supply or occupational practices
 
  -  where rights & benefits are portable btwn employers
 
  -  where occupation establishes performance standards & establishes disciplinary procedures
 

 
Top
  
Figure: Wage - Employment Preference Path

The Figure: Wage - Employment Preference Path demonstrates that wkrs do not value employment & wages equally across the spectrum at lower levels of wages & employment, more employment is preferred; at higher levels of wages & employment, more wages are preferred 

 
Internal
Links

Top
 Outline on Bargaining Structures
External
Links
  The bargaining structure is the orgl nature of the relationship btwn union(s) & employer(s) in contract negotiations, including a specification of the employees & facilities covered 
 
  The election unit is not necessarily the unit in which bargaining occurs 
 
  A bargaining structure often aggregates employer units either from a single industry in a given region or by lumping together geographically separate plants 
 
  Less often, various unions representing employees under a single firm have coordinated bargaining 
 
  Bargaining units (BUs) often cover wage issues for several units, leaving non wage issues for local determination 
 
  Since the decline of the corporatist approach in the 1980s, Labor has lost power 
 
  Because of this loss of power, there has been an increase in the decentralization of bargaining, w/ a greater likelihood than in the past that economic issues will be negotiated at the local level 
 
  A decentralized bargaining structure is more likely to divide & conquer the Labor Mvmt & pit union against union 
 
  The decentralized bargaining structure has the advantage that it is possible to more closely tailor a contract to fit a particular location 
 
  For a local, job security is often more important than the national union's economic goals 
 
  An example of the utility of centralized bargaining, is that a union prefers a centralized bargaining structure because it avoids hard feelings among members over different settlements 
 
  A firm may also prefer a centralized bargaining structure because it will not have several strikes or bargains to make 
 
  Bargaining structures can influence bargaining power, & the relative effects for both Labor & mgt can be altered by the structures they agree to use  
  The inelasticity of demand for Labor influences the degree to which mgt can grant wage increases & so it affect the bargaining process  
  Bargaining structure is important because the inelasticity of demand for Labor varies from BU to BU  
  Therefore the inelasticity of demand for Labor influences how mgt & Labor want to create BUs  
  The inelasticity of demand for products & services will influence the outcome of the bargaining relationship  
  Pension benefits & healthcare issues have grown in negotiations because at first they were seen as ancillary, i.e. having a smaller effect on the cost of a contract that wages & hours  
Link
 Figure:  Bargaining Patterns  
  The Figure:  Bargaining Patterns demonstrates the factors that determine whether single firm barg, multi employer barg, industry wide barg, or coordinated barg are chosen, including the size of the firm, the number of competitors of the firm, the cost structures of the competitors, & whether wkrs are represented by multiple unions  
 Link
 Figure:  A Conceptual Framework for the Determinants of Bargaining Outcomes
 
  The Figure:  A Conceptual Framework for the Determinants of Bargaining Outcomes demonstrates that econ factors, the orgl context, socio econ factors & the legal env all influence the barg power of firms & unions, ultimately influencing outcomes  
  In relation to the determinants of barg outcomes, econ factors include competitiveness, the nature of the mkt, labor intensity, etc.  
  In relation to the determinants of barg outcomes, the orgl or institl context include barg struc, size of the BU, % of the ind which is unionized, union rivalry, geog location, etc.  
  In relation to the determinants of barg outcomes, socio econ factors include ed level, gender, race, experience, occupation, etc.  
 
 See Also:  The Types of Bargaining Units  
  When bargaining reaches an impasse, either mgt or labor may want to change the makeup of the BU by combining it w/ others, breaking it up, etc.  
  However, the modification of BU is very controversial  
  A BU is broadly defined by the law, regulations & court cases, but ultimately w/in this framework, a bargaining unit is what mgt & Labor decide it is  
  The makeup & expansion of a bargaining unit results only from the voluntary agreement of the parties  
  The NLRB & the courts hold that mgt cannot unilaterally w/draw from the BU during negotiations w/o the consent of the union  
  The Supreme Ct does not see an impasse as unusual in bargaining, thus neither party can w/draw or destroy a BU because of an impasse  
  A BU can only change w/ the mutual agreement of the parties  

 
Top
  
Figure 8 - 10:  Bargaining Patterns

Figure 8 - 10:  Bargaining Patterns demonstrates the factors that determine whether single firm barg, multiemployer barg, industrywide barg, or coordinated barg are chosen, including the size of the firm, the number of competitors of the firm, the cost structures of the competitors, & whether wkrs are represented by multiple unions

 
Top
  
Figure 8 - 11:  A Conceptual Framework for the Determinants of Bargaining Outcomes

Figure 8 - 11:  A Conceptual Framework for the Determinants of Bargaining Outcomes demonstrates that econ factors, the orgl context, socio econ factors & the legal env all influence the barg power of firms & unions, ultimately influencing outcomes

 
Internal
Links

Top
 Outline on the  Types of Bargaining Units
External
Links
  A BARGAINING UNIT IS A COLLECTION OF EMPLOYEES W/ SIMILAR INTERESTS WHO ARE REPRESENTED BY A SINGLE UNION REPRESENTATIVE   
  For organizing purposes, bargaining units (BUs) would be w/in the same employer  
  For bargaining purposes, they might involve several employers  
  There are NINE types of bargaining structure units, each which has advantages & disadvantages, which depend on the conditions of the negotiations
1.  Single Unit Bargaining 
2.  Multi employer Bargaining
3.  Industry wide Bargaining
4.  National / Local Bargaining
5.  Wide Area & Multi craft Bargaining		 6.  Pattern Bargaining 
7.  Conglomerates & Multinationals
8.  Coordinated Bargaining 
9.  Craft Units w/in an Employer
 
  1.  IN SINGLE UNIT BARGAINING, ONE UNION ORGANIZES & NEGOTIATES A CONTRACT FOR ONE GROUP OF SIMILAR WKRS   
  Historically, the Labor Mvmt began bargaining w/ single unit bargaining  
  Single unit bargaining was often organized around crafts  
  Craft oriented single unit bargaining is still required by all of those industries covered by the RLA:  primarily the airlines & railroads  
  W/ the advent of industrial organizing as made influential by the CIO, workers in a single plant were organized  
  Because of the complexity of the factory system, more complex methods of bargaining developed  
  2.  MULTI EMPLOYER BARGAINING IS A CONSENSUAL RELATIONSHIP BTWN MGT & UNIONS WHERE BARGAINING INVOLVES ALL EMPLOYERS IN THE UNIT & THE TERMS & CONDITIONS OF THE AGREEMENT APPLY EQUALLY TO ALL EMPLOYERS 
 
  The Figure:  Effect of a Wage Increase for a Single Employer in a Competitive Product Mkt demonstrates that if Labor negotiates a wage increase w/ only one employer, if all other factors cannot be adjusted, if Labor wins a wage increase, then the employer will be forced to lay off wkrs   
  Labor prefers mutli employer bargaining to single employer bargaining because it prevents lay offs  
  If all employers experience an increase in wages, or an increase in any other cost, they they all raise prices & pass them on to customers   
  The Figure:  Effect of a Wage Increase for a Multi employer Bargaining Unit demonstrates that because the demand for an entire industry is more inelastic, i.e. the demand curve is steeper, negotiated increases in wages result in little reduction in labor & costs may be more easily passed on to consumers   
  While demand for product from one employer may be elastic, for the whole industry, it is inelastic because people must buy the product from the industry, or not at all   
 
 Many industries consist of large numbers of relatively small employers
 
  Typically multi employer bargaining occurs in construction, garments, retailers, wholesalers, etc.
 
  W/in an industry, the issues will be relatively common across employers
 
  Single unit bargaining, i.e., non multi employer bargaining, is a disadvantage for both Labor & Mgt. because it creates different costs across employers, thus making some more competitive than others; the less competitive employers may go out of business costing the union jobs
 
  Furthermore, even if all the employers stay in business, members may become dissatisfied w/ their representation
 
  To reduce the problems of differential costs, wages, & business failure, mgt & Labor often engage in multi employer bargaining
 
  Labor may organize & bargain w/ each employer separately, but multi employer bargaining occurs when one contract is negotiated across several employers / units
 
  In multi employer bargaining, a single set of negotiators speaks for all employers, & the negotiated wage applies to all members of the bargaining assoc
 
  In multi employer bargaining, the:
 
  -  contract expires at the same time, so all employers have the same risk of strikes  
  -  cost of any wage increase can be passed on to all customers simultaneously
 
  -  collective employers' mkt demand is inelastic, so costs can be passed on
 
  -  individual employers' mkt demand is elastic, so costs cannot be passed on
 
  The most successful multi employer bargaining occurs when employers have comparable non labor costs all employers are unionized new firms have a high cost of entry
 
  3.  INDUSTRY WIDE BARGAINING, ALL OR MANY EMPLOYERS IN AN INDUSTRY BARGAIN SIMULTANEOUSLY W/ A SINGLE UNION 
 
  Multi employer bargaining occurs in a relatively small geographic area
 
  Industry wide bargaining occurs when products or services are essentially commodities
 
  Industry wide bargaining has all the advantages of the multi employer bargaining in that it equalizes costs to the firms & benefits to the members  
  Maintaining an industry wide bargain is difficult because they can become too large & complicated  
  4.  IN NATIONAL / LOCAL BARGAINING, BARGAINING IS DONE ON THE LOCAL LEVEL W/ LABOR ISSUES / DEMANDS SET BY THE NATIONAL SO THAT THERE IS NATIONAL LEVEL COORDINATION   
  Under national / local bargaining, different issues are negotiated at different levels  
  W/ national / local bargaining, bargaining occurs on a companywide basis for wages & benefits & locally for terms & conditions of employment  
  Strikes are usually prohibited over local issues until a contract over national economic issues is made  
  If a particular plant is critical in the production process, that unit may have considerable bargaining power  
  In any of the types of bargaining units discussed so far, a wage increase or any economic benefit may push costs over revenues, leading to a plant closing  
  Thus negotiations involving give backs / concessions are more often negotiated at the local level  
  When mgt & Labor see possible contract difficulties related to local problems, or when unions expect trade offs for concessions, organization wide bargaining is common  
  5.  WIDE AREA & MULTI CRAFT BARGAINING OCCURS ACROSS AREAS & CRAFTS IN ORDER TO ESTB SOME COORDINATION OF DEMANDS & TO ESTB RELATIVELY EQUAL LABOR COSTS FOR EMPLOYERS IN THAT AREA / CRAFT   
  Historically, unions organized & negotiated by crafts  
  Wide area & multi craft bargaining created cross craft comparisons, conflicts among unions, & employers playing one union against another  
  This single craft negotiating has continued to date in some construction & other small producer units  
  Wide area & multi craft bargaining avoids these problems by combining all crafts in an area / industry into one negotiation  
  But internal politics & diverse economic interests may make satisfaction of all members needs difficult  
  An advantage to employers which gives Labor more bargaining power is that in small craft dominated businesses such as construction, finishing on time is a primary concern.  
  A unionized labor force w/ wide area bargaining provides a dependable labor force at a guaranteed price  
  6.  PATTERN BARGAINING OCCURS WHERE EMPLOYERS OR UNIONS SEEK AGREEMENTS THAT IMITATE THOSE PREVIOUSLY CONCLUDED IN OTHER BARGAINING ROUNDS IN THE INDUSTRY   
  Examples of pattern bargaining include auto & rubber  
  In concentrated industries, the dominant union chooses a major employer as a bargaining target  
  Negotiations are concentrated on this target firm, which is struck if agreement is not reached  
  When an agreement is reached, it is used as a pattern in negotiations w/ other employers who often agree to the contract  
  Pattern bargaining broke down in the 1980s due an aggressive anti Labor climate, & unfavorable economic conditions   
  By the late 1980s, down-sizing had occurred in the auto industry, concessions had been made, pattern bargaining has begun to gain popularity again  
  The UAW has returned to pattern bargaining  
  7.  BARGAINING W/ CONGLOMERATES & MULTINATIONALS IS SIMILAR TO NATIONAL / LOCAL BARGAINING BECAUSE THE EMPLOYERS ARE NATIONAL IN & OF THEMSELVES   
  Conglomerates are a business that operates in diverse industries & no subsidiary is large relative to the others, & the subsidiaries do not depend on each other for parts or services  
  Examples of bargaining w/ conglomerates & multinationals include Pepsi, Frito, Taco Bell, & GE  
  Conglomerates bargain w/ several unions & has contracts w/ different expiration dates & thus has strong bargaining power  
  Multinationals have strong bargaining power because it is difficult to represent off shore workers  
  Multinationals can easily shift production to other countries  
  8.  IN COORDINATED BARGAINING, TWO OR MORE NATIONAL UNIONS REPRESENT EMPLOYEES OF A SINGLE MAJOR EMPLOYER   
  Under coordinated bargaining, unions seek comparable agreements w/ common expiration dates  
  The unions agree to sit in on each others negotiations  
  Examples of coordinated bargaining include General Electric & the Electronic Workers & United Electrical Workers  
  9.  CRAFT UNITS W/IN AN EMPLOYER OFTEN BARGAIN AS A UNIT BECAUSE CRAFTS REPRESENT ONE POOL OF LABOR ACROSS EMPLOYERS, BECAUSE HISTORICALLY, CRAFTS WERE SOME OF THE FIRST UNIONS & ALWAYS BARGAINED INDEPENDENTLY OF OTHER WKRS   
  In railroads & airlines, the RLA requires bargaining units to be organized on a craft basis  
  Thus employers will have to bargain w/ several unions  
  Craft unions will have different levels of bargaining power  
  Example craft union w/in a single employer type bargaining can be seen w/ Pilots & mechanics having substantial bargaining power while flight attendants & ground crews do no  
  Legislation, regulations & court cases have created a public policy on labor relations that impacts bargaining structure units  
  The RLA requires that bargaining take place on a craft basis  
  An example of bargaining on a craft basis is seen in that airline gate agents are often represented by the Brotherhood of Railway & Airline Clerks ( BRAC ), while pilots are often represented by the Air Line Pilots Assoc, & mechanics are often represented by the Machinists   
  Craft basis bargaining enhances each unions power since any one can shut down the airline, & because of the perishability of air travel  
  But bargaining under the RLA are protracted because no strike is possible until an impasse is declared by the NMB  
  Then the union may not strike for another 30 days  
  Then the President may establish an Emergency Board & prohibit the strike for 60 days while the EB examines the issues  
  On the other hand the NLRB permits coordinated & coalition bargaining  
  GE bargains w/ a negotiating committee representing several unions  
  Unions are permitted to demand common contract expiration dates among employers in a single industry  

 
Top
  
Figure: Effect of a Wage Increase for a Single Employer in a Competitive Product Market

The Figure:  Effect of a Wage Increase for a Single Employer in a Competitive Product Mkt demonstrates that if Labor negotiates a wage increase w/ only one employer, if all other factors cannot be adjusted, if Labor wins a wage increase, then the employer will be forced to lay off wkrs 

 
Top
  
Figure: Effect of a Wage Increase for a Multi employer Bargaining Unit

The Figure:  Effect of a Wage Increase for a Multi employer Bargaining Unit demonstrates that because the demand for an entire industry is more inelastic, i.e. the demand curve is steeper, negotiated increases in wages result in little reduction in labor & costs may be more easily passed on to consumers 

 
Internal
Links

Top
 Outline on Factors Impacting Bargaining
External
Links
  -  Project:  Factors Impacting Bargaining:  Centralization:  Delta & Bargaining 
Link
  The most important factors impacting bargaining are economic, in the form of the increased competition that resulted from globalization & deindustrialization, & political, in the form of an aggressive anti Labor stance by mgt & the govt  
  Since the 1980s there has been a mvmt away from centralization in bargaining toward decentralization, & back to some centralization again
 
  Increased competition due to globalization, deindustrialization, the development of the economy, & due to an aggressive anti Labor climate, poses problems for both labor & mgt
 
  Mgt is forced to deal more harshly w/ unions to survive in the industry
 
  Because of the increasing stress in the wkplace, mgt has less time & resources to put into labor relations
 
  Labor has lost leverage on econ issues   
  The Labor Mvmt has moved its bargaining structure from the corporate to a business level, thus becoming more decentralized  
  This decentralization resulting from business level bargaining means that labor power is fragmented  
  This decentralization of bargaining has resulted in greater tension btwn nationals & locals  
  Greater centralization in bargaining has internal consequences based on:
-  the degree to which nationals participate in bargaining
-  the degree to which nationals must give permission to strike
-  veto power over negotiated agreements
-  power over other content issues
-  power over process issues		  
  The national may have more information & resources to bring to the bargaining table than does the local
 
 Link
 Figure:  A Model of Centralization of Control over Bargaining in National Union
 
  Figure:  A Model of Centralization of Control over Bargaining in National Union demonstrates that many vars such as firms size affect both the barg process & barg content, which in turn impact the outcomes of bargaining   
  In relation to centralized bargaining, the barg process & barg content are both positively influenced by an unconcentrated mkt, & by a hi union density  
  In relation to centralized bargaining, the barg process is positively influenced by a nat mkt  
  In relation to centralized bargaining, barg content is positively influenced by a large % share of the mkt dominated by a firm  
  In relation to centralized bargaining, the barg process is negatively influenced by the dominance of craft unions as opposed to indl unions & a small local,   
  In relation to centralized bargaining, barg content is not negatively influenced by any factors  
  In relation to centralized barg, the barg process & barg content are neither positively nor negatively influenced by the firm size, member concentration, & the RLA  
 
 Major changes in labor management relations in industrial bargaining structures & outcomes have occurred since 1980
 
  See:  Industries  

 
Top
  
Figure: A Model of Centralization of Control over Bargaining in National Union

Figure:  A Model of Centralization of Control over Bargaining in National Union demonstrates that many vars such as firms size affect both the barg process & barg content, which in turn impact the outcomes of bargaining 

The End
 
Top
  

 
 
Link