Collective Bargaining

[swatiraohnlu]

Collective bargaining is a means by which employees, in the private and often in the public sector, can collectively bargain with their employer in order to seek better pay and working conditions. Long taken for granted as appropriate and necessary in the private sector, collective bargaining rights have been at the center of debate in regards to public employees and unions. Wisconsin became the center of this debate in early 2011 when governor Scott Walker pushed to end collective bargaining rights for public union workers. He and other opponents of collective bargaining, often claim that ending the practice is a necessary means of helping cut costs and budget deficits. They argue that collective bargaining gives unions too much power and so results in them being able to have their way in securing higher wages and benefits.

 

[swatiraohnlu]

Different economic theories provide a number of models intended to explain some aspects of collective bargaining:

1. The so-called Monopoly Union Model (Dunlop, 1944) states that the monopoly union has the power to maximize the wage rate; the firm then chooses the level of employment. (Recent literature has started to abandon this model.)[citation needed]
2. The Right-to-Manage model, developed by the British school during the 1980s (Nickell), views the labour union and the firm bargaining over the wage rate according to a typical Nash Bargaining Maximin (written as Ώ = UβΠ1-β, where U is the utility function of the labour union, Π the profit of the firm and β represents the bargaining power of the labour unions).
3. The efficient bargaining model (McDonald and Solow, 1981) sees the union and the firm bargaining over both wages and employment (or, more realistically, hours of work)

 

[dimpy.handa]

Collective bargaining operates at three levels:

1. National level
2. Sector or industry level
3. Company/enterprise level

Economy-wide (national) bargaining is a bipartite or tripartite form of negotiation between union confederations, central employer associations and government agencies. It aims at providing a floor for lower-level bargaining on the terms of employment, often taking into account macroeconomic goals.

Sectoral bargaining, which aims at the standardization of the terms of employment in one industry, includes a range of
bargaining patterns. Bargaining may be either broadly or narrowly defined in terms of the industrial activities covered and may be either split up according to territorial subunits or conducted nationally.
The third bargaining level involves the company and/or establishment. As a supplementary type of bargaining, it emphasizes the point that bargaining levels need not be mutually exclusive.