Wage Bargaining and Employer Objectives

Falch, Torberg

doi:10.1111/j.1467-9957.2004.00406.x

Cited by 3 publications

(2 citation statements)

References 22 publications

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“…Third, the wage and employment effects of trade unions have been looked at, assuming the firm to pursue other objectives than profits. Falch (2004) analyzes wage bargaining between a rent‐maximizing trade union and a firm for which he considers various objectives, inter alia, profits, profits plus consumer surplus, output and revenues. The comparison of bargained wages yields no consistent relationship concerning the different objectives.…”

Section: Introductionmentioning

confidence: 99%

Trade unions and corporate social responsibility

Goerke

2020

Ann Public Coop Econ

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Trade unions distort a profit‐maximizing firm's input choice. The nature of the resulting inefficiency depends on whether there are wage negotiations or there is efficient bargaining. Moreover, trade unions redistribute income and thereby affect welfare. If firms also pursue Corporate Social Responsibility (CSR) objectives, input choices may be distorted already in the absence of collective bargaining. Adopting a positive perspective, we show that CSR objectives, which induce a firm to expand production, have ambiguous wage and employment consequences in case of wage negotiations and raise employment if there is efficient bargaining. Importantly from a normative vantage point, such CSR objectives make a welfare‐enhancing role of trade unions more likely in the presence of wage negotiations. The reverse is true in case of efficient bargaining.

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Section: Introductionmentioning

confidence: 99%

Trade unions and corporate social responsibility

Goerke

2020

Ann Public Coop Econ

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“…For example, see McDonald and Solow (), Nickell and Andrews (), Bughin (, ), and Bárcena‐Ruiz and Campo (). Also, Falch () examines wage bargaining outcomes across five different employer objectives: profit maximisation, welfare maximisation, output maximisation, revenue maximisation, and management maximisation.…”

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confidence: 99%

Strategic Delegation of Multiple Tasks

Liao

2014

Australian Economic Papers

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This paper studies both the owner-manager relationship and the union-firm relationship in a model of unionised duopoly to analyse whether a firm's owner delegates the task of wage bargaining to a manager along with the task of output determination. We also analyse the profit and welfare effects of multiple-task delegation. It has been shown in the literature that, when there is only one delegation task -output determination -delegation of output decisions to managers leads to lower profits for owners than nondelegation as pure profit-maximisation. However, when there are two delegation tasks as in our modeloutput determination and wage bargaining -we show that owners are better off delegating both tasks than delegating only the output decision or not delegating at all. This result provides a rationale and managerial insight for strategically delegating multiple tasks to managers. Moreover, we show that union utility, consumer surplus and social welfare are all higher when owners do not delegate the task of wage bargaining than when they do. This result suggests that governments implement union contracts that require owners, rather than managers, to negotiate wages with unions in order to benefit unions and consumers and to improve social welfare as well.

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The effect of private versus public ownership on labour earnings

Bastos

Monteiro

Straume

2014

Oxford Economic Papers

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We examine the impact of privatisation on wage formation in unionised labour markets. Using longitudinal worker-firm data for Portugal spanning the period 1991-2007, we find that privatisation leads to higher wages, and show that this effect is driven by the fact that privatised firms tend to pay larger markups on the union wage floor. These findings accord with a theoretical model in which actual paid wages are determined via sector-wide collective bargaining and firm-specific "fair-wage" policies, and where private ownership affects wage-setting incentives in both of these stages.

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Wage Bargaining and Employer Objectives

Cited by 3 publications

References 22 publications

Trade unions and corporate social responsibility

Trade unions and corporate social responsibility

Strategic Delegation of Multiple Tasks

The effect of private versus public ownership on labour earnings

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