Changing the bargain: The stability and change of centralized wage bargaining in open liberal economies
The methodology used in the dissertation is a paired comparison of Ireland (?Social Partnership? 1987-2005) and Australia (?The Accord? 1983-1996), with reference to other cases of central wage bargaining in liberal economies. The primary research question is, what explains the stability of Irish central wage bargaining in comparison to the decentralization of wage bargaining experienced in Australia in the late 1980s and early 1990s? There are two conditions that must be sustained in order that central wage bargaining is stable in open liberal economies. First, public sector wages must be kept under strict control and large wage drift must be avoided. Second, export sector employers must be able to exercise pay flexibility. Pay flexibility is defined as encompassing an outcome dimension (exporters should be allowed to give pay increases above or below the centrally agreed wage bargain increase) and a process dimension (exporters should be allowed to set wages with a minimum of interference from third parties, be they wage setting institutions or trade unions). The two necessary conditions of public sector wage control and export sector pay flexibility are found in the Irish case explaining central wage bargaining stability, but not in the Australian case, explaining its wage bargaining decentralization. In Ireland after 1987, the stability of the system has been enabled by a concerted effort by policy-makers to de-couple pay movements between the public and export sectors. This is achieved through allowing export employers pay flexibility, while ending old patterns of public sector relativities-driven wage bargaining. This is in contrast to the late 1970s and early 1980s where large public sector wage drift caused the decentralization of wage bargaining. The Australian system decentralized because wage arbitration institutions created during a closed trade policy regime interfered with the process aspect of pay flexibility of exporters. These institutions intruded into wage setting at the plant level, and enhanced the power of trade unions to influence and alter the wage setting process. This provoked a successful export-employer led offensive on the central wage bargaining system.
centralized wage bargaining; liberal economy; Australia; Ireland
dissertation or thesis