The conditional effect of technological change on collective bargaining coverage

Abstract

Recent work in labor economics has shown that technological change has induced labor market polarization, an increase in demand for both high and low skill jobs, but declining demand for middle skill routine task jobs. We argue that labor market polarization should affect firms’ participation in collective agreements, but only in countries where laws automatically extending collective agreements to nonparticipating firms are weak. We develop an argument in which labor market polarization increases the distance between different skill groups of workers in both preferences for unionization and leverage to realize those preferences. Because of this, an increase in labor market polarization should be associated with a decline in collective bargaining coverage. We test our hypothesis about collective agreement extension and collective bargaining coverage in a cross-national sample of 21 Organisation for Economic Co-operation and Development countries from 1970 to 2010 and our hypothesis about labor market polarization in German firm-level and industry-level data from 1993–2007. We find a negative relationship in the Organisation for Economic Co-operation and Development sample between technological change and collective bargaining coverage only in countries that make little or no use of extension procedures. We find that higher workforce skill polarization is associated with lower collective agreement participation in both German firm-level and industry-level samples.

Shrinking and shouting: the political revolt of the declining middle in times of employment polarization

“…Peugny (2019) shows that expanding occupations in the lower skilled (service) sector, evident alternatives in the face of shrinking opportunities in routine work, are on average not only low-pay jobs but also low-quality jobs: precarious working conditions are widespread in non-routine manual or interpersonal work. Furthermore, technological change tends to complicate trade union organization (Meyer and Biegert, 2019). Increasingly bleak prospects in mid-skilled routine jobs in combination with even less attractive alternatives highlight the delicate situation of the lower middle class in times of automation.…”

Trabalho E Proteção Social Na Era Da Economia Digital

“…Vale destacar que a expansão de ocupações de média e baixa qualificação nos setores de serviços é fortemente caracterizada por empregos mal remunerados e precários. Além disso, a mudança tecnológica tende a complicar a organização sindical (Meyer;Biegert, 2019).…”

Returns to digital skills use, temporary employment, and trade unions in European labour markets

“…At odds with economic theories of skill-based or routine-based technological change, in which innovation is largely considered an exogenous factor with seemingly deterministic consequences for group-level inequalities, recent empirical evidence has pointed in the direction of possible context-specific effects (Barbieri et al, 2021; Klenert et al, 2020; Kristal and Edler, 2021; Minardi et al, 2023; Oesch and Piccitto, 2019). This suggests that factors such as labour market regulations and wage-setting institutions act as moderators to market-driven mechanisms associated with technological change (Meyer and Biegert, 2019; Oesch and Menes, 2011; Parolin, 2021). In fact, from a comparative perspective, the most pronounced direct effects of technological and digital changes have been observed in flexible and relatively unregulated labour markets (Acemoglu and Restrepo, 2020; Berger and Engzell, 2022).…”