Collective Bargaining and the Public Interest

Collective Bargaining and the Public Interest: A Welfare Economics Assessment

Copyright Date: 1989
Pages: 192
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  • Book Info
    Collective Bargaining and the Public Interest
    Book Description:

    Collective Bargaining and the Public Interest presents a critical assessment of the way society marshals and deploys its labour force. David Winch's analysis is based on the economic theory of how markets work and the criteria of welfare economics by which they can be evaluated. Using neoclassical economic theory to analyse the welfare economics of collective bargaining, Winch examines where and to what extent legitimate third-party inter-ests are involved when labour unions and firms come together to negotiate collective agreements. Winch also makes important recommendations for public policy. He concludes that while unions and collective bargaining serve society well, the process of dispute resolution by conflict, or strike, does not. He proposes that arbitration be employed instead of strike or lock-out as a last resort mechanism of dispute resolution.

    eISBN: 978-0-7735-6198-4
    Subjects: Political Science

Table of Contents

  1. Front Matter
    (pp. i-iv)
  2. Table of Contents
    (pp. v-vi)
  3. Preface
    (pp. vii-2)
  4. CHAPTER ONE Introduction
    (pp. 3-10)

    In Canada today, the labour market is widely perceived as dominated by trade unions, the process of collective bargaining, and the resolution of disputes by strikes. The attention of the public is focused, largely by the news media, on the determination of wages by the collective bargaining process. In fact, approximately one-half of the paid employees eligible for unionization have their wages determined by collective bargaining between employers and unions.¹ The proportion of nonagricultural paid workers who are members of certified unions increased from about 25 per cent in 1945 to about 40 percent in 1983. Since only some 86...

  5. CHAPTER TWO Human Labour, Human Beings, and Economics
    (pp. 11-35)

    Human labour is a factor of production. In a market economy labour services, like anything else of value, can be bought and sold. Economists can analyse the labour market in the same way as other markets. In his capacity as worker, the human being is a stock of human capital that can yield a flow of labour services. The acquisition of skill is investment in human capital and is comparable with investment in physical capital. The employment contract can be viewed as either the sale of a specified flow of services or the leasing of a unit of human capital....

  6. CHAPTER THREE The Theory of the Labour Market
    (pp. 36-52)

    In economic theory, and particularly the theory of markets, the simplest models that assume away the complexities and obstacles of the real world often work smoothly and achieve equilibria with ideal properties. As complexity is introduced difficulties arise. The analytical process of introducing complexities one at a time permits us to establish which imperfections cause which problems, though some problems result from a combination of causes. Identifying the cause of a problem is the first step toward finding a solution. The labour market can be analysed in this way, the simplest model being the spot market with perfect and costless...

  7. CHAPTER FOUR Collective Bargaining
    (pp. 53-83)

    The contract of employment between employer and employee, each acting as a single individual, is the basic unit of the labour market. Each party to a contract is in principle free to negotiate its terms with the other party. Individual negotiation is in fact the way in which the terms of employment are determined for unique employees. The small firm that hires only a few workers, no two of whom have comparable qualifications and perform identical tasks, must determine the wage separately for each. In the large firm, senior employees may have jobs or qualifications different from those of other...

  8. CHAPTER FIVE The Public Interest
    (pp. 84-103)

    “The public interest” is a widely used and often vaguely defined term. It will be used here to refer to the interest that members of society have in the consequences of alternative structures of the labour market. Clearly the participants themselves have a crucial interest in the way a market operates. The public interest refers to the consequences for people other than the immediate participants. To say that something is of interest to the public means that it affects third parties to a significant extent whether beneficially or harmfully. The effects may be so widespread that virtually every citizen is...

  9. CHAPTER SIX The Public Sector
    (pp. 104-116)

    The public sector can be defined in many different ways. A broad definition will be most appropriate for our purposes, though it will encompass many cases of employment that do not differ in significant ways from employment in the private sector. The public sector can be defined as activities that produce goods and services that are provided to citizens by government, or under the auspices of government, or by an agency of government that is publicly owned or funded to a significant extent by public money, or by a firm that is regulated by an agency of government. The important...

  10. CHAPTER SEVEN The Better Alternative
    (pp. 117-137)

    Previous chapters have examined the working of various possible forms of the labour market ranging from the perfectly competitive spot market that satisfies the assumptions of the simple model of supply and demand to the system of collective bargaining that characterizes the contemporary real world. Each has been assessed by the three criteria of efficiency, equity, and integrity. The general conclusion is that the unavoidable existence of high costs of search, training, and mobility preclude the achievement of sufficient flexibility in the labour market for a system based on supply and demand alone to work satisfactorily. The essential characteristic that...

  11. CHAPTER EIGHT Conclusions and Recommendations
    (pp. 138-156)

    The basic recommendations to which this study leads should be clear from the analysis contained in previous chapters. There is no reason to interfere in any way with the operation of the labour market in spot or defined period contracts. When the parties to a contract agree to limit the period of their relationship, and the terms of the contract are clearly specified in advance, no issues affecting the public interest arise and normal market forces operate effectively. The law of contract suffices to enforce contracts voluntarily made.

    The bulk of the labour market, however, relies on the indefinite period...

  12. Notes
    (pp. 157-176)
  13. Bibliography
    (pp. 177-180)
  14. Index
    (pp. 181-184)