collective bargaining
this legitimacy can give trade union members a sense of belonging to the organisation (1979). These three things; the sense of equality, common interest and belonging will make workers more content, minimise conflict and create a feeling of stability within the company. Collective bargaining, when agreements that come from it are for set time periods, can allow management to plan for the future based on those agreements and the knowledge that the unions are likely to cooperate. All of the above oil the wheels of a capitalist society. And as I both live in and believe in a largely capitalist society, this has to be a good social influence.
Collective bargaining also has its disadvantages as far as capitalism is concerned. In cases where radicals have managed to hijack the union's side of collective bargaining then unreasonable demands can lead to severe conflict. The same can be said of the employer side. Inflexible and uncompromising employers can cause severe disharmony, and possibly cause irreversible damage to the employee-employer relationship. But this will only occur in a minority of situations. The greatest disadvantages of collective bargaining in a capitalist society lie mainly in the financial arena. Collective bargaining in the form of wage rounds leads to both wage and grade drift. Wage drift leads to higher wage costs for employers and higher inflation within the economy, which in turn leads to higher interest rates and lower investment. Lower investment means that fewer jobs are created, unemployment rises, social welfare payments increase and possibly an increase in the national debt. Following these consequences there would be less money in the economy overall in real terms. Grade drift is a problem for employers which is linked to wage drift. Grade drift occurs where secure jobs are one of the trade unions aims in collective bargaining. As jobs become more automated with the advance of technology, employers are forced to keep staff to keep to previous agreements. As companies no longer need as many staff the workforce tends to get older, with rising wage costs and mainly static skill levels.
In Ireland over the last 25 years, the focus of collective bargaining has been widened to a nation-wide one from localised and industry level, with various degrees of success. This focus on the nation-wide picture has led to 7 national wage agreements, 2 national understandings, and three other agreements or programmes; the Programme for National Recovery (PNR), The Programme for Economic and Social Progress and the Programme for Competitiveness and Work. It is my opinion that centralised collective bargaining has evolved in much the same manner as collective bargaining itself; focusing on purely economic issues, and then steadily including more social issues. While the national wage agreement secured certain pay increases, the real value of those wages dropped. It was during the era of the National Wage Agreements that inflation rose to 20%, days lost through strikes increased and unofficial strikes increased (Gunnigle et al, 1995). Although this may seem that this type of collective bargaining had [next page]