
 Collective Bargaining:
 A Great Social Invention?
 Discuss.
 
 "There's strength in numbers"
 This is a clich, or could even be called a proverb that most of us have heard at some stage
 in our lives. It also lies at the heart of collective bargaining, and it provides a
 reasonable, although simplistic reason for the use of collective bargaining, and also gives
 us an indication of where and for whom it is most useful.
 
 Collective bargaining's origins lie in one of man's primary instincts; defence. In an
 industrial relations context this is defence of proper working conditions, secure employment
 and proper pay. Collective bargaining allowed this by gaining pay increases through the
 increased power of the workers as a joint force. In this context I see collective bargaining
 as more of an economic and political invention which has had an influence on the social
 aspects of employment and living. Because of this I would have to say that collective
 bargaining is not a great social invention simply because it was not a social invention. But
 it does have social benefits, by providing more economic stability for those who partake in
 it among other things which I will discuss in this essay. Collective bargaining also has its
 disadvantages which I will also discuss. These advantages and disadvantages fall on both
 sides of the collective bargaining fence; the employees and employers.
 
 But what exactly is collective bargaining? The answer to that depends on ones viewpoint.
 What are the social benefits of collective bargaining? And who do these benefits affect?
 These are but a few of the questions I intend to answer in the course of the next 2000 or so
 words.
 
 To put this essay in context I must say what I feel collective bargaining is and what its
 purposes are. 
 
 I see collective bargaining, in its most basic form, as the process by which an organised
 group of employees, in the form of trade unions, negotiate with employers, their
 representatives or their associations in relation to any aspect of employment within the
 employers organisation. The reason that collective bargaining and trade unions are used is
 the reason cited in the first paragraph; "There's strength in numbers". The individual
 threat by a single employee to withhold labour is not very great. But when the majority of a
 workforce in an organisation threaten to strike, or threaten any other form of industrial
 action this threat becomes altogether more substantial. Collective bargaining gives redress
 to the imbalance of power between individual workers and employers (Gunnigle et al, 1995).
 This is the main purpose that collective bargaining is used in industrial relations, and
 essentially gives collective bargaining a political purpose; the equalisation of power. Once
 this extra power is attained, collective bargaining is then used for primarily economic
 purposes. It is only in recent times that social issues have been included in the
 negotiations in collective bargaining. As this process tends to lead to equal pay for all
 workers doing the same work, there is as a consequence a social benefit; equality amongst
 the workforce. While this can have its downside, namely complacency among the employees as
 there is little incentive to do better in work, this disadvantage has been partly eroded in
 recent times with the advent of productivity deals, which I will discuss in more detail
 later in this essay. 
 
 Collective bargaining is also a political institution in that it regulates and defines the
 interaction between trade unions and management. In a social context, the consequences of
 this is a system  for regulating industrial conflict. This can help ensure that any
 industrial conflict is kept within reasonable bounds, and that in most cases the more
 militant elements in trade unions are kept under control by virtue of the fact that the
 majority of the workforce see an alternative avenue of dealing with disputes. I believe that
 this consequence of collective bargaining contradicts the optimistic Marxist view that trade
 unions and collective bargaining are a school for socialism and a potential revolutionary
 force. It does confirm the pessimistic view that it ensures that trade unions will never be
 any more than trade unions, and that collective bargaining oils the wheels of capitalism.
 But that's not a bad thing at all, and is one of the great social benefits of collective
 bargaining. So how exactly does collective bargaining oil the wheels of capitalism?
 
 Collective bargaining provides management with a method for dealing with employees in an
 equitable way. But not only equitable, but also seen to be equitable. If areas of common
 interest are maximised, and stressed in the collective bargaining process, this can
 reinforce a an acceptance of common interest by the workforce (Purcell, 1979). The process
 of collective bargaining also legitimises trade unions within the company or employing
 organisation. Purcell also contends that 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 a bad social influence, it must be noted that
 the OPEC recessions of the 1970's would have had been a contributing factor to all of the
 above.
 
 In 1987 the government, trade unions and the FUE negotiated the PNR. Other than the
 provisions for pay increases, social issues were taken into consideration: 'The programme
 was to cover the period up to the end of 1990 and entailed the following provisions: -The
 creation of a fiscal, exchange and monetary climate conducive to economic growth. This
 included a commitment that the ration of debt to GNP should be reduced to between 5 and 7
 percent; -movement towards greater equity and fairness in the tax system -measures to
 generate employment opportunities -Reduction of social inequalities"
     (Gunnigle et al, 1995; 191..192)
 Overall the PNR proved to be a successful venture, although it was helped along by the boom
 period of the late 80's. There was substantial economic growth, a reduction in the debt to
 GNP ratio and a decline in strike levels (Gunnigle et al, 1995). 
 
 The PESP contained similar, but widened social commitments to the PNR. While not as entirely
 successful as the PNR, the PESP had its positive social influences in the form of low
 interest rates and low inflation, in spite of the recession of the early 1990's. Industrial
 peace also continued throughout this period.
 
 The PCW, like the two programmes before it, focused on social issues in increasing strength.
 As this programme is still running, we can say little about its success or otherwise, other
 than to say that there is still relative industrial peace, sustained economic growth and low
 inflation and interest rates.
 
 In the above discussions on the three programmes, I have only considered the more obvious
 social benefits, i.e.. those which the programmes set out to achieve. There are other social
 benefits which follow on from those discussed above. One of the most important of these is
 confidence in the Irish economy. With industrial harmony, low interest rates, low inflation
 and sustained growth comes confidence in the economy. One indicator of the fact that the
 programmes inspire confidence is this: In 1987, when the PNR was being negotiated, the
 Federated Union of Employers had to be coerced into the negotiations. Yet in 1993, 95% of
 senior personnel managers were in favour of a further PESP style agreement. (Gunnigle et al,
 1995).  The stability of the agreements has provided management with a situation where they
 can be reasonably sure of what is coming and can plan ahead based on that. The programmes
 have also allowed successive governments to plan ahead, something normally unheard of.
 Previously, governments had tended to plan for one fiscal year in the form of the budget,
 but now we have a situation where they are planning for three years with the programmes. The
 programmes have also provided a sense of continuity, as successive governments from all
 political parties have continued the programmes. This form of planning ahead has allowed
 significant progress in the areas of debt reduction, social welfare and taxation.
 
 It is not only in an Irish context that collective bargaining has been seen as desiring an
 effect on social aspects of the economy. In the UK, where there has been little, if any
 centralised collective bargaining, Fox states: "[Collective bargaining] has often been seen
 as, though not by all pluralists, not only as levelling up employee power to an acceptable
 approximation of that of management, but also as reinforcing government social welfare and
 redistributive policies in gradually reducing class difference." (Fox, 1985:22) But it would
 seem that the lack of any centralised bargaining has reduced this impact of collective
 bargaining; "Collective bargaining has not substantially shifted the proportion of the
 national product going to wages and lower salaries, nor have welfare and other so-called
 redistributive policies had the equalising effects imputed on them" (Fox, 1985;22) In
 Ireland, while there have been few dramatic changes with regard to social welfare, there
 have been significant cuts in the effective tax rate in favour of the lower paid. If we take
 the 1994 budget as one example, the effective tax rate for a single person earning 120 per
 week was cut by 3% from 20.6% to 17.6%. For the higher paid, if we take the example of
 someone earning 600 per week, the effective tax rate was only cut by 1.5% (McCarthy and
 Tansey, 1994). While this cannot be directly attributed to the success or otherwise of
 Collective bargaining, I maintain that the stabilising effect of the three agreements, along
 with the commitment therein would have had a distinct influence. This reduction in taxation
 will have a social influence: "to re integrate larger numbers of the unemployed back into
 the labour market, it is clearly desirable that the taxation burden on earned income be
 reduced" (McCarthy and Tansey, 1994;67)
 
 Centralised collective bargaining didn't actually do away with localised collective
 bargaining. Instead it changed the focus of collective bargaining. Gunnigle and Flood
 contend that the focus changed from pay increases towards employment conditions, pay
 anomalies and productivity. (1995). This is another of the good social influences of
 collective bargaining in Ireland. Now, rather than haggling over minimal wage increases,
 localised collective bargaining is instead working at improving working conditions, reducing
 grievances and increasing productivity. This change in focus has led collective bargaining
 away from the adversarial win-lose situation to a more cooperative model, with management
 and unions working together to achieve common goals.. While management have had to pay out
 more to improve working conditions and fund productivity deals, they have gained increases
 in productivity, worker flexibility and industrial harmony. In the negotiation of these
 'win-win' deals, one added bonus is the extension of trust. Where both parties to the
 negotiation stand to gain, communications between them tend to be more open than would occur
 in an adversarial situation. If agreements are made under good faith, both parties to the
 negotiation may feel a moral obligation to follow the agreement. This can cause dual
 loyalties in staff, that is loyalty to both the Union and the company. This can become a
 problem should the good relationship between management and unions break down. (Fox 1985). 
 
 I must say that although I believe that collective bargaining's origins lie mainly in an
 economic arena, had it been a social invention it would have been a good one. In an Irish
 context, where the prevailing ideology and public opinion has allowed collective bargaining
 to flourish, its social impact, while not as great as some would have hoped, has been for
 the better. When collective bargaining addresses a range of issues which are inter-related,
 and addresses the interactions between them, the benefits can be great. But when collective
 bargaining focuses on one issue, without regard for its effects on other issues that the
 effects can be disastrous, as seen in the case of the national wage agreements..
 
 Collective bargaining is not however, and never will be, a revolutionary force.
 As Fox wrote in 1985:
 "Collective bargaining... emerges as a process through which employee collectives aspire,
 not to transform their work situation, but to bend it somewhat in their favour" (Fox,
 1985;153) In conclusion then, while I believe that collective bargaining has many good
 social influences, it cannot hope to change society in any dramatic way.
 
 