Want to reduce inequality? Raise living standards for low and average income earners? Increase productivity and give the 1 percent a bit of a kick (that is, reduce their share of income)? Is there one measure that can do all this? Yes: vindicate workers’ right to collective bargaining.
The right to collective bargaining refers to workers bargaining as a group, rather than as individuals, in the workplace. It begins with the workers. Together, they can decide to negotiate individually with their employer; or they can choose an agency through which to negotiate; that is, collectively. And in this instance, they can choose to bargain through a staff association or a trade union. So the issue of collective bargaining is, in the first instance, not about trade union recognition (though that can be the result); it is about respecting the choice of the employee.
That is, if we provided Irish workers such a choice – which we don’t. Uniquely in the EU, there is no requirement on the part of employers to respect employees’ decision to bargain collectively. In short, employers have the legal sanction to ignore their workers.
The benefits of collective bargaining have long been established. It provides workers with ‘a voice’, overcoming the unequal relationship between the employer and the individual employee (bargaining power, access to information, resources). Collective bargaining is more effective at increasing pay and improving working conditions than individual bargaining; further, it can help avoid conflict in the workplace by establishing mediation procedures just as it can prevent arbitrary and un-appealable decisions by management.
This is not a zero-sum process (though employers treat it as such). Collective bargaining provides gains for both workers and the enterprise. The National Centre for Partnership and Performance (a body sorely missed after being culled by the Fine Gael / Labour government) found that companies with high levels of employee and union participation were 20 percent more productive than comparable companies with little or no participation. If this is so (and numerous studies confirm a similar link) then the refusal to recognise workers’ right to bargain collectively has less to do with company performance and more to do with managerial power and control.
However, collective bargaining is not just a ‘workplace’ issue – it has wide ranging social consequences. The International Monetary Fund (IMF) found that union membership and collective bargaining reduce economy-wide inequalities:
‘We find evidence that the erosion of labor market institutions is associated with the rise of income inequality . . . notably at the top of the income distribution . . . the decline in unionization is related to the rise of top income shares and less redistribution, while the erosion of minimum wages is correlated with considerable increases in overall inequality.’
The OECD also investigated this relationship and found that:
‘Top earners (i.e. the top 1 percent) obtain a smaller share of the economy’s aggregate labour income in countries where more workers are covered by collective wage bargaining.’
The OECD explains the impact on the top 1 percent by stating that collective wage bargaining supports low and average income earners in receiving a ‘larger share of the wage pie’.
The financial crisis that originated in the US was caused by a deadly mix of stagnating wages and, to compensate, easy credit. This has led some commentators to suggest a link between declining trade union membership and collective bargaining coverage, and the financial crisis. Had consumption been wage-based rather than credit-based, economies would have been less exposed mounting household debt.
And while the argument that strong workers’ rights translates into higher unemployment (the ol’ insider/outsider divide) has often been bandied about, there is evidence to the contrary:
‘ . . . the more trade unions and employer organisations are able to coordinate the process of wage bargaining over different sectors and companies, the lower unemployment tends to be.’
With all these positives, how does Ireland stand in regards to collective bargaining coverage? Poorly, according to the OECD.
In most other countries in our peer-group 80 percent or more employees are covered by collective bargaining. Ireland is at the bottom of the table – just above the UK. When one considers that almost all public sector workers are covered by collective bargaining, we could find that only 15 of Irish private sector workers bargain are.
So whether we understand collective bargaining within a rights-based framework for workers, a macro-economic tool to avoid debt and lower unemployment, or a social tool to reduce inequality, it is clear that collective bargaining should become a priority for progressives.
However, there is a debate needed on this issue within the trade union movement and progressive parties. While vindicating the right to collective bargaining at enterprise level is absolutely essential (and after years of work, even Ryanair has had to accept it) we need to debate more ambitious structures such as multi-employer and sectoral bargaining and the strategies needed to get us to that space. In multi-employer bargaining, we can start to remove wages from race-to-the-bottom competitive strategies and empower those with the least bargaining power (no wonder the EU Commission are so opposed to this type of bargaining, as they are wedded to labour-flexibility agendas).
But ultimately this is a democratic issue – the democracy of the workplace. There is no economic democracy without the right of workers to bargain collectively, no popular democracy without strong labour rights. This will not come via a gift. It will have to be won. It will require resources and energy to address where we are now – workers organising where they work. This is the best way to build towards legislative and sectoral success.
And it starts with a simple demand: you will not ignore us.