Bargaining Structure and Inflation
- 25 Downloads
During the stagflation of the late 1970s, unions played a role in worsening inflation in some countries but not in others. This can be attributed to differences in laws governing the bargaining process. In continental Europe, each large sector of the economy is generally covered by a single collective bargaining agreement that provides for standardized wages. In the United States and the United Kingdom, there are a multitude of collective bargaining agreements. These are usually specific to a single employer, sometimes to specific worksites and even specific types of workers at that site. The result is a hodgepodge of wage rates. This fractionalized bargaining process fueled inflationary wage demands and labor strife. Among the explanations is the theory of relative deprivation that people are primed to focus on disparities.
KeywordsUnions Negotiations Inflation Labor law
Compliance with Ethical Standards
The author declares that he has no conflicts of interest. This article does not contain any studies with human participants or animals performed by the author. There were no individual participants in this study and, thus, informed consent does not apply to this study.
- Bureau of the Census. (1983). World population 1983: Recent demographic estimates for the countries and regions of the world. Washington, D.C.: Department of Commerce. https://play.google.com/books/reader?id=XA42PtWFuVAC&printsec=frontcover&source=gbs_atb_hover&pg=GBS.PR1. Accessed 29 Mar 2014.
- Freeman, R., & Medoff, J. (1984). What do unions do? New York: Basic Books.Google Scholar
- Golden, M., Wallerstein, M., & Lange, P. (2008). Postwar trade-union organization and industrial relations in twelve countries. In D. Austen-Smith et al. (Eds.), Selected works of Michael Wallerstein. Cambridge: Cambridge University Press.Google Scholar
- Hindess, B. (1982). The decline of working class politics: a reappraisal. In B. Pimlott & C. Cook (Eds.), Trade unions in British politics. Burnt Mill: Longman Group.Google Scholar
- Inflation.EU. (2017). Available at http://www.inflation.eu. Accessed 20 Sep 2017.
- International Labor Organization. (2017). Germany - http://www.ilo.org/ilostat-files/WEB_bulk_download/ref_area/DE2_A.csv.gz; Great Britain - http://www.ilo.org/ilostat-files/WEB_bulk_download/ref_area/GBR_A.csv.gz; United States - http://www.ilo.org/ilostat-files/WEB_bulk_download/ref_area/USA_A.csv.gz: . Accessed 14 Oct 2017.
- Mitchell, D. (1980). Unions, wages, and inflation. Washington, D.C.: The Brookings Institution.Google Scholar
- Runciman, W. (1966). Relative deprivation and social justice: A study in attitudes to social inequality in twentieth-century England. London: Routledge & Kegan Paul.Google Scholar
- Sturmthal, A. (1972). Comparitive labor movements: Ideological roots and institutional development. Belmont: Wadsworth Publishing.Google Scholar
- Taylor, R. (1982). The trade union ‘problem’ since 1960. In B. Pimlott & C. Cook (Eds.), Trade Unions in British Politics. Burnt Mill: Longman.Google Scholar
- Wallerstein, M. (2008). Wage-setting institutions and pay inequality in advanced industrial societies. In D. Austin-Smith et al. (Eds.), Selected works of Michael Wallerstein. Cambridge: Cambridge University Press.Google Scholar