Organized Labor in a Globalized World: The Impact of Increasing International Economic Integration on the Strategies of Trade Unions Public
Nahmias, Gabriel (2013)
Published
Abstract
Evidence is mounting that economic globalization has had a detrimental effect on intrastate inequality, especially in industrialized nations. One possible causal mechanism by which to explain this relationship is the declining bargaining power of labor and, particularly, organized labor. This work argues that as a result of trade competition and the threat of outsourcing, trade unions are less capable of demanding wages, benefits, and job security from employers. Furthermore, unions will respond to declining bargaining power by augmenting their lobbying efforts for human capital and infrastructure investments as a means of fortifying labor's relative position in negotiation, and thus its ability to demand compensation and job security. Furthermore, it is argued that unions will increase their pressure on the government for unemployment insurance to offset declining security in the marketplace.
A two stage methodology is adopted to evaluate the validity of this theory. Panel data from 30 industrialized nations supplies evidence that globalization diminishes the effect of union strength on compensation and some types of employment protection, while increasing the positive impact of trade unions on investment in training, infrastructure, and unemployment insurance. Following this statistical analysis, unions in two sectors of the British economy, manufacturing and construction, are examined to show that these effects are a conscious decision on the part of union leaders and that they are indeed the result of globalization.
Collectively, the evidence suggests that globalization is indeed causing unions to emphasize productivity in their demands for compensation. Furthermore, the cross-national analysis provides support for the claim that unions are pressuring the government for increased social spending to support of the working class during periods of unemployment, though the micro foundations could not be established in the case study. Contrary to theory, it appears that unions are still pushing for government employment protection, perhaps even more than employment insurance, as a consequence of globalization. Finally, the case study makes apparent that trade unions have a number of other policy responses at their disposal which theory does not take into account.
Table of Contents
Table of Contents
Introduction: Unheard-of Wealth and Unheard-of Poverty 1
Literature Review: 4
The Inequality of Bargaining Power 4
Globalization Has Gone Too Far 6
Win Wage Gains and Promote Job Security 10
Theory: Same Ends, Different Means 13
Cross National Time Series Analysis Methodology 15
A Few Minor Heroic Assumptions 15
Rich and Free 17
Variable Overview 18
Explanatory Variables: 18
Globalization 18
Union Strength 21
Control Variables: 22
Fixed Effects 22
Wage Coordination 24
Regime Ideology 25
Technological Change 25
Deindustrialization 27
Exposure to Globalization 28
Competitive Advantage 28
Cross National Time Series Analysis Results 30
Win Wage Gain: Labor Share 30
Promote Job Security 33
Severance Pay 34
Advance notice 35
Unemployment Rate 37
Competitive Advantage 38
Training 38
Infrastructure 39
Maintaining Labor's Welfare: Unemployment Insurance 43
Cross National Conclusion 45
Case Study: A Manufacturing Union in the United Kingdom 46
Labor in Defense: A Brief History of the British Labor Movement 51
Labor in Dispute: Strike Behavior Since 1972 55
Labor in Dialogue: A Decade and a Half of Testimony 58
Labor in DisUNITEy: Same Union, Different Strategies 66
Labor in Person 71
Discussion: Organized Labor in a Globalized World 73
Conclusion: There is [Still] Power in a Union 77
Tables & Figures 79
Data Sources 140
Works Cited 142
Appendix 151
Countries & Years for Which Both Union Strength & Globalization Data is Available 151
Descriptive Statistics for Explanatory & Control Variables 152
Descriptive Statistics for Dependent Variables 153
Conditional Coefficient of Union Strength for All Dependent Variables as Derived from Full Model 154
Conditional Effect of One Standard Deviation Increase in Union Strength as Derived from Full Model 155
Conditional Effect of One Standard Deviation Increase in Union Strength as Derived from Full Model 156
Trade Union Membership of Trades Union Congress 157
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