Inequality between capital and labour and among wage-earners: the role of collective bargaining and trade unions

In the context of rising inequality between capital and labour and among wage-earners in Europe, this state-of-the-art article reviews the literature concerning the relationship between collective bargaining and inequality. It focuses on two main questions: (i) what is the relationship between collective bargaining, union bargaining power and inequality between capital and labour? and (ii) what is the relationship between collective bargaining, union bargaining power and wage inequality among wage-earners? Both questions are discussed in general terms and for single- and multi-employer bargaining systems. It is argued that collective bargaining coverage and union density are negatively related to both types of inequality. These relationships are however qualified by four additional factors: who unions represent, the weight of union objectives other than wages, the statutory minimum wage, and extensions of collective agreements by governments.

How redistributive institutions affect pay inequality and heterogeneity among top managers

In recent years, many scholars have investigated the incredible rise of executive pay and the role of institutions as moderators of this trend. We argue that a crucial problem for attempts to moderate these increases remains the heterogeneity among top managers. Redistributive institutions can better target pay inequality among management than institutions that treat all managers or companies the same. To show this, we use a novel data set of executive pay across 17 OECD countries. We compare the effect of different institutional factors: corporate and personal income taxation, union bargaining power, and regulation (shareholder protection). We find that redistributive institutions such as personal income tax and union bargaining power seem to be more effective in addressing this heterogeneity in pay and in moderating remuneration in firms with very large market value than smaller firms.

Building Socialism British Style

This chapter examines the postwar legacy of the Labour Party. Labour's legacy included a fully formed welfare state with the National Health Service (NHS) at its core; an ambitious public housing program; strong trade union bargaining power; quasi-Keynesian fiscal tactics to sustain purchasing power; a degree of central planning for a mixed economy; and a constant reiteration of egalitarian values. A few of Labour's far-reaching programs no doubt had roots of a sort in the thought and experience of the coalition years of World War II. However, the forms and transformational heft of Labour's postwar settlement derived in the main from the party's prewar social democratic agenda, its surprisingly decisive victory in 1945, and its hard-fought exercise of power. After 1951, the Conservatives came to terms with Labour's bedrock achievements but worked steadily to modify them incrementally in favor of free enterprise.