Industrial Relation in the USA - Essay Example

The industrial relations system in the USA is characterized by high levels of juridification and low levels of collective bargaining. Discuss Introduction Industrial relations known also as labor relations, employee relations or the employment relationship refer to the legal relationship between the employer and the employee concerning rights and obligations by and towards each other in the employment context (Bamber, 2004). Industrial relations in the US are characterized by both a higher degree of juridification, i.e. the ever increasing tendency to legally regulate industrial relations and a lower level of collective bargaining, i.e. employees of an organization usually represented through a union and the employer coming to an agreement on terms and conditions on such matters as pay, work conditions and so on. The above makes it amply clear that after years of evolution since 1960 circa collective bargaining procedure in the US industrial relations sphere has been diluted in strength and scope. This systematic loss of power associated with collective bargaining in the US has been accompanied by a corresponding increase in the level of juridification of industrial relations at the workplace. As a result what is so obvious now is the fact that the US trade union power structures have eroded over the years with active manipulation by employers as against deregulations and voluntarism. The latter two concepts are used in the analysis on the subject by writers to articulate the historical process of evolution from the predominance of trade union determined activity since the early 1930's. President Roosevelt's New Deal did much to change the course of trade union domination. However the most important aspects in the US industrial relations sphere are related to the liberal ideology that places emphasis on individual entrepreneur's talents. Thus there is very little emphasis on institutions like trade unions and concepts like collective bargaining. Analysis The US society has been developing on exceptional lines such as the absence of a historical process of feudalism and aristocracy and above all a rapid social transformation process highly characterized by ethnic diversity and cultural homogeneity (Hurd, 2001). These developments apart there were some economic and political processes that helped the creation of a completely different set of rules and regulations governing employment and related practices. For instance form the early 1930's a realignment of political forces in the US under Roosevelt generated a hither to unknown degree of interest in the individual entrepreneur's ability to bring about the highest amount of good for both the individual employee and the society. Thus the social transformation process almost overlapped the economic transformation process, thereby producing a host of positive implications for the whole society. The subsequent years especially 1950's noticed a remarkable change in the labor laws. Each state in the country began to develop its labor laws on the same identical lines. This pawed the way for followers to adopt what the leading states introduced. As a result there was a clear polarization of forces within the business organization, viz. employees seeking to defend their rights through collective bargaining and employers seeking to concede less to the workforce (Boxall & Haynes, 1997). The ultimate result was that collective bargaining took a backseat while juridification of industrial relations became more obvious. Under this process of juridification labor contracts became more formal in legal applications. This in turn led to a gradual but sure process of erosion of employee rights in the work place. In fact rights were gradually replaced with obligations violation of which led to disastrous consequences for workers. In other words the process of juridification of industrial relations in the US began to acquire a new dimension during this period. In the 1960's and the 1970's this process was further enhanced by new developments. Elsewhere in the world, especially in Europe trade unions were gaining momentum as the most promising institutional bargaining powerhouse while in the US trade unions were pitted against the ever rising political and legal clout of the average employer. Labor contracts lasted for number of years thus permitting employees much less freedom to resort to industrial action. Strikes were much less visible as a measure of collective strength of employees; neither were agreements between the employer and the employee legally favorable to the latter. The post 1960 period up to the current times has been characterized by an increasing level of juridification of industrial relations in the US. In the 1960's and the 1970's particularly industrial relations in the US were developing on the basis of a dichotomy, i.e. collective bargaining procedure was regarded as a hindrance to the smooth and continuous production activity. Further there was much less institutional and legal support for trade unions which were reduced to mere formal labor outfits that sought to represent employees' interests with much less success (Budd & Scoville, 2005). Thus the collective bargaining concept was gradually relegated to the text book theory on trade unionism in the US. Wagner Act of 1935 almost permitted the government to redefine trade union rights. In other words during the subsequent years after the Act trade unions in the US began to experience a systematic deterioration of their rights. In fact the Wagner Act just formalized what was already taking place in the workplace. In the 1950's these developments were further reinforced by government actions against trade unions. In 1952 for example President Truman went on to capture the management of steel firms when trade union representatives rejected the recommendations made by the Wage Stabilization Board. Though subsequently the Supreme Court found President Truman's action unconstitutional the act itself set a precedent. Some years later the Wagner Act was repealed. As a result the Labor-Management Relations Act (also known as Taft-Hartley Act) in 1947 and the Labor-Management Reporting and Disclosure Act (also known as Landrum-Griffin Act) in 1959 were passed. These Acts were principally intended to check the growing powers of trade unions. However some critics have pointed out that these Acts did not have much force in them to compel trade union activists to follow what the management thought was proper. But nevertheless these Acts were intended to take away much of the sting found in the Wagner Act which overtly favored organized labor. Thus the process of juridification of industrial relations in the US could be considered as a gradual process of transformation (Meyer & Cooke, 1993). During the first few years in the 1960's industrial relations were highly characterized by collective bargaining. However employers relied much on labor contracts to define the outcomes of such relations. For instance legislation related to industrial relation in the US granted employers a greater degree of freedom in liberally interpreting the law. As a result employees and trade unions had much less by way of freedom to interpret the law. The contractual obligations included in such contracts and agreements were heavily biased against employees and collective bargaining rights. This led to an unprecedented trend in juridifying industrial relations. Collective bargaining was considered by employers as a hindrance to the progress of the company. However there has been a significant drop in union density in the US in particular during this period. According to the statistics union density in US was 30.9% in 1960 and it declined gradually in later years, i.e. 22.3% in 1980, 12.8% in 2000 and 11.6% in 2007.However the public sector organizations did not experience a substantial fall in union density. A number of factors other than economic, political and legal can be attributed to these developments (Crouch & Streeck, 2006). In the first instance the average business organization was more or less influenced by the ideological implications. Thus collective bargaining during the 1960's was subject to excessive scrutiny by both the government and employers. Ideological implications were further reinforced by organizational behavior. For instance combined with the neoclassical theory of the firm, the ideological conceptualization of trade unions as hindrances to effective functioning of the business was highlighted by even the analysts during this time (McKersie, 1987). Many employers in both the government sector and the private sector were inclined to believe that both deregulations and voluntarism could do more for the betterment of employee welfare. Deregulations were desirable in the face of mounting pressure by trade unions to institutionalize the existing framework of industrial relations. On the other hand voluntarism was advocated as a singularly more meaningful measure to permit the individual employee to decide employment terms and conditions for himself rather than depending on collective bargaining. Deregulations were desirable though juridification began to cloud over the former. In the first instance deregulations of employment related procedures and processes could have benefited both the employer and the employee. However employees were feeling more and more insecure in the face of excessive government intervention (Hyman, 1997). In the absence of a protective mechanism trade unions were hard pressed to accommodate even unfavorable terms and condition put forward by employers in order to keep their members just employed. Thus juridification was an inevitable outcome. The economic perspectives associated with industrial relations are based on the legal relationship between the employer and the employee. Therefore economic implications of labor contracts and agreements are basically influenced by the same attitude. During the 1970's US industrial relations were partially influenced by the liberal economic ideology as interpreted by neoclassical theory of the firm (Jacoby & Verma, 1992). According to neoclassical theory labor supply is basically determined by demand for and supply of skills. Assuming that skilled labor is scarce in relation to demand, the neoclassical theory held that supply can be increased by offering higher wages. Thus US industrial relations were characterized by a similar attitude. Nothing mattered other than higher wages to skilled workers to offer a greater number of hours to the employer. However neoclassical theory is much more complex than this. Though many pieces of legislation were past during the 1960's and the 1970's for the benefit of labor, industrial relations in the US took a different turn, to benefit employers against employees. Excessive juridification of labor laws could be seen in the work environment during this period. The government almost monopolized its power-hold over trade unions by selectively targeting certain industries and powerful trade unions. The net result of this process could be seen in both federal and state level interference with trade union activity. In fact essential services like health care and energy supply were relatively free form mass scale strikes. In other words the US government laid the foundation for a completely different direction in industrial relations. In the 1970's the juridification process of US industrial relations reached a landmark with excessive government intervention in industrial relations (Logan, 2006). Collective bargaining was subject to a substantial amount of limitations due to the employer's preference for prolonged labor contracts that effectively precluded industrial action. As a result labor tribunals and courts were mere appendages that were part of the system. These tribunals and courts were merely required to interpret the existing legislation that inordinately favored the employer. The 1970's decade was marked by stability in trade union activity because employers were ready to grant higher wages and guarantee the minimum rights to employees. While many employers felt that higher pay was in conformance with the theoretical explanation to efficient production concept, this stability did not last long. Employers demanded a higher level of contribution from employees while the latter were compelled to accept a higher degree of juridification of industrial relations resulting from the assurance of good pay and job security (Katz & Darbishire, 2002). Despite the apparent lull in trade union related agitation for change at the work place, industrial relations turned out to be very shaky. Though collective bargaining was used to set pay rates employers were increasingly dependent on the provisions in labor contracts that permitted them to control industrial action by trade unions. For instance the existing labor legislation specifically referred to a series of violations which curtailed strike action to a greater extent. The process in labor legislation sought to further the interests of employers at the expense of employees' interests. As a result employees felt that they were not getting what was rightfully theirs. The denial of a right to strike was interpreted by employers as a mere extension of the existing rules and regulations while employees regarded it as a far greater infringement of their rights. Unionization of labor in the US has been highly characterized by a number of external variables (Hurd, at al. 2003). Among them labor market behavior and labor supply constraints are the most important. Unlike the European labor markets, the US labor market has been developing on a set of autochthonous norms such as interstate labor traffic and ethnic diversity. Coupled with liberal immigration policies of the government both the government and the private sector benefited from a large pool of skilled labor. On the other hand the markets began to develop some inherent characteristics such as structural changes and near total dependency on independent sources of supply. As for supply constraints highly politicized trade unions were making big efforts to prevail on the employer to change the whole outlook of industrial relations. However successive governments in the US were not ready to accept drastic changes. This was followed by a set of regulations that heavily impacted on industrial relations. Both the federal and state governments increasingly legislated on trade union behavior. As a result supply constraints were worsened. Potential employees often avoided unionized business organizations (Hollinshead & Leat, 1995). On a sectoral basis private enterprise often discouraged trade unions from creating employee welfare both within the organization. As a result any agreement between the employee and the employer was based on the existing laws. This trend heightened the degree of juridification. The 1980's were marked by a still greater degree of juridification under President Ronald Reagan whose two terms in office particularly shifted the economic policy away from monetary-neoclassical mixture to supply-side theory. Thus the 1980's decade is very important due to two reasons - firstly Margret Thatcher's Britain was experimenting with monetary economics while the US under Reagan was highly influenced by supply-side theory and secondly trade unions were struggling hard to redefine their direction, especially the collective bargaining and related rights (Kochan, at al. 1994). The former economic policy related aspect of the evolutionary process of US industrial relations is remarkable due to the fact that Reagan started it off by firing the air traffic controllers and replaced them with new workers. In the latter case US trade unions were undergoing some transformation process during this period. Supply side theory places emphasis on free labor markets. This means that any supply side constraints in labor markets have to be removed by using demand and supply theory alone. The government would have to pave the way for the removal of artificial barriers created by trade unions (Frege & Kelly, 2004). Thus strikes are discouraged; industrial action for higher wages is not tolerated; minimum wages are frowned on; supply constraints are actively removed such as geographical and occupational immobility of labor; and wages are determined through demand and supply alone. Though supply side theory helped the Reagan Administration to overcome the new challenges of unionized workers, industrial relations as a whole did not altogether cease to exist. The net result of this development could be seen in the subsequent agitation campaign launch by a series of national level trade unions. Reagan's legacy still prevails though towards the end of 1980's decade Reagan's supply side policies became unpopular. Government intervention in industrial relations came to a head during this period in the US. As much as real wages were a great worry to trade unions, they were an equally big headache to the employer. Collective bargaining was pushed below the level of reasonable pay negotiations that were newly designed with employers preferring to negotiate with umbrella organizations of workers (Franzese, 2003). This created a new philosophy at the workplace where representatives from umbrella organizations representing a number of cross-occupational sub organizations would represent the interest of all the employees at the workplace. This new trend in fact laid the foundation for further deterioration of workers' rights. The process of juridification acquired a larger dimension. The transition period from the 1980's decade to the 1990's decade was uncertain because with a new successive Republican Administration coming in to office and economic uncertainty increasing, trade unions were not sure of their collective bargaining position. Trade unions were unanimous in their belief that the rising process of juridification of US industrial relations affected them so much (Kochan & Weinstein, 1994). Despite this unanimity trade union leaders like the above cited Air Traffic Controllers could do nothing to renegotiate terms and conditions in labor contracts. Employers took them for granted, thus effectively stifling trade union freedom to strike. In the 1990's decade with just one Democratic Administration in office trade union powers were further curtailed by successive Republican Administrations. Under Bush, the senior and Bush, the junior trade union freedom to take industrial action to safeguard the existing employee rights further deteriorated. However this was also the time that big business organizations, especially in the field of IT, were flourishing. Information and Communication Technology (ICT) firms were spreading throughout the country. The startup firms were not ready to accept trade union dictates. The government was more eager to accommodate the wishes of a rising class of ambitious ICT entrepreneurs. The net result was further marginalization of trade union powers. During the 1990's the successive US Administrations were determined to remove the structural barriers in labor markets. This is exactly what the Reagan Administration was trying to do. Such an effort required a higher level of labor mobility. Thus the education system had to play a substantial role in educating and training a new class of upwardly mobile IT executives. This process obviously led to the removal of trade union powers that employers regarded as hindrance to effective production planning (Locke, at al. 1995). Thus previously frequent work stoppages were very rare during this period. However the greater belief in the individual's capacity to accomplish things was questioned by many writers. In the first place the government's efforts at systematically removing trade union powers, thus replacing them with diluted collective bargaining were obviously misdirected at the employees who were looking for some workplace rights. Motivation theories starting from Taylor's theory to modern day Fordism have acquired a grater foothold in the US workplace. Therefore there was very little acceptance of trade union freedom to engage in industrial action (Crouch & Streeck, 1997). Particularly what was undesirable from the viewpoint of the average employer was the license to disrupt work. The demand for employees' rights was not justifiable from their viewpoint and as a result excessive juridification of US industrial relations was not only inevitable but also required by a progressive society that questioned the credibility of collective bargaining and related trade union rights to strike deals on behalf of their members with long term negative consequences for the business itself. The current decade is characterized by a still greater degree of marginalization of trade union powers and as a result collective bargaining process has been relegated to a secondary place. Further from 2005 onwards the current global economic downturn and the financial crisis have forced the government to adopt still more stringent measures to curtail trade union activity (Leat, 2007). Thus it is obvious that staring from 1930's up to now the juridification process of US industrial relations has effectively contributed to the marginalization of collective bargaining in the US. Conclusion In conclusion it must be noted that industrial relations in the US acquired a significant place through 1930's to 1950's. However in subsequent decades the collective bargaining process of all trade unions was subject to some deterioration. The extent to which such deterioration continued cannot be determined without the reference to the relative rise or fall of trade union powers in Europe. Therefore this paper has sought to delineate a series of developments related to both gradual and rapid deterioration phases, particularly emphasizing both the government intervention and the importance of deregulations and voluntarism. Juridification of the US industrial relations has acquired a still greater dimension in the recent years. In fact this process began way back in the 1950's through the 1960's. The post 1970's period did not show much of a change until half way through 1980's when the Reagan Administration began a series of economic measures that were effectively utilized by employers to curtail trade union powers. Collective bargaining was the greatest casualty of this process. The subsequent decades were no different. Reagan's supply side policies had a telling impact on trade unions in the US. Thus the current process of juridification is the inevitable consequence of times and their impact on trade union activity. REFERENCES 1. 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