Week 1 Lesson 2

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<br />Four Views of Labor Unions and Collective Bargaining<br />

Four Views of Labor Unions and Collective Bargaining
Views Description<br />
Neoclassical Economics<br /> Bad: monopolies that benefit a few at the expense of everyone else
Human Resource Management Unnecessary: effective management policies are best; unions add unproductive conflict
Industrial Relations Important: needed to counter corporate bargaining power and balance efficiency, equity, and voice in democratic, capitalist societies
Critical Industrial Relations (Marxist) Important but inadequate: key for aiding labor's struggle against capitalists and protecting workers, but with systemic imbalances; needs sociopolitical change for true reform
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Lecture Notes

Okay, now that we've talked about these four different perspectives to labor relations or to unions and collective bargaining, let's put a little meat on these different perspectives, and let's talk about John Budd's figure, figure 2.5, and let's walk through this figure and how it illustrates the relationship between different perspectives and the policy prescriptions that they offer. So, we're going to talk about two different fundamental assumptions about labor, about employment, and then based on those two assumptions, we'll look at different schools of thought, those different schools of thought that we just outlined in the previous slide.

Let's take the first assumption, and that's the assumption on the left of the slide if you're looking at the slide, and that is, "Is labor a commodity?" In other words, are employees, is labor similar to any other commodity that you might use in the process of production, like widgets or any other materials. And, if the answer to this question, if you're a paradigmatic perspective, and your answer to this question is that labor is a commodity, that it's bought and sold like any other commodity, then you are likely represented by a, kind of, mainstream economics, neoclassical economics approach. And, the way in which you believe that the workplace should be governed is via competitive markets. Competitive markets, when it comes to the buying and selling of labor, or to the labor relationship, the employment relationship, is through competitive markets. So, that's if the answer to this question about labor as a commodity is yes.

If your answer to this question is no, that labor is not a commodity, then you open the door to the three other perspectives that we talked about on the previous slide, the human resource management perspective, the industrial relations perspective, and the critical industrial relations perspective. So, I'll come back to each one of those. But, let's talk about the second assumption that stands at the heart of how we think about labor relations and how the workplace should be governed, and that's the question, "Are employers and employees equals in this competitive labor market?" Is there an imbalance of power between the parties?

And, if the answer to this question is yes, that you think that they are equal, that you think that labor and management have equal power in this relationship, then it brings us back again to the mainstream economics perspective, to the neoclassical economics perspective. And, again, the way in which one who believes that the parties are equal and that labor is just a commodity like any other commodity, the way in which the workplace is governed given these responses to these assumptions is through competitive markets.

If your answer is no, then it brings us back to these three other perspectives. And, the way in which we distinguish between these three other perspectives, the HR, the industrial relations, and the critical industrial relations perspective is based on the third question, which is "Are there inherent conflicts of interest between employers and employees?" Do they have different interests at the heart of what they're looking to achieve out of the employment relationship? And, if your answer to that is no, if your answer to that question is no, that there aren't inherent conflicts of interest, then you're likely to take a unitarist approach, or a human resource management approach, which believes that management and employees don't have inherent tensions or conflicts of interest between them, and management and labor, and employees, can have a single interest or agenda that they're trying to obtain, hence, the term the unitarist approach.

But, if your answer is yes to this question of whether there's an inherent conflict of interest between employers and employees, then you likely fall under either the industrial relations or the critical industrial relations perspective. The industrial relations perspective is a pluralist perspective mainly that argues that management and employees have different interest that motivate them, that animate them in the workplace, and it's in part because of these different interests that are not completely aligned that unions are necessary. It's the human resource management's perspective stating that there aren't necessary conflicts of interest between the parties that leaves that perspective to believe that unions are unnecessary. And, the critical industrial relations perspective also argues that there is an inherent conflict of interest, or conflicts of interest, between the parties but that these go far deeper than the industrial relations perspective acknowledges. These are their root class differences and therefore need to be addressed through systemic changes.

Now, let's take each of these three perspectives from left to right. The human resource management perspective first, then industrial relations, then critical industrial relations. The human resource management perspective, we can ask one more question. "How important is voice in the employment relationship?" And, if voice is important, then we would likely see an HRM system with employee consultation and participation. We'll talk a little bit more about that through the semester. And, if we don't think voice is very important, then the workplace is governed through HR policies.

The industrial relations perspective, if we believe voice is important, then collective bargaining, which is the focus of our course, becomes crucial. And, if not, then the workplace should be governed through government regulations that try to balance these competing interests, these different interests that management and employees and labor have.

And, finally, on the critical industrial relations front, if voice is important, then this school advocates for worker control, worker ownership. And if not, it advocates for socialism. Now, to be clear, much of our class, much of our course is going to pit the human resource management perspective with the industrial relations perspective. We will be talking less about this critical industrial relations perspective, this Marxist perspective.