Globalization: Collective Bargaining

The impact of globalization, technology, and the current economic crisis on labor-management relations and collective bargaining has been great. Although globalization has brought increased competition in markets, according to Forbes, "more U.S. workers benefit from increased trade than suffer from it" ("U.S. Workers Benefit from Globalization," 2008). Globalization will result in freer trade, which "will play a crucial role in boosting long-term U.S. growth prospects, encouraging efficient technology transfer, increasing returns-to-scale for companies and offering cheaper consumer goods" ("U.S. Workers Benefit from Globalization," 2008). Nevertheless, the impact on labor-management relations and collective bargaining is less promising. As the cases of Toyota and Nike show, globalization, technology, and the current economic crisis exert a negative impact on labor-management relations and collective bargaining.

Richard D. Vogel (2008) points out that the three megatrends of increasing globalization, rising global inequality and growing poverty, and "massive, irreversible, and probably catastrophic environmental damage caused by unregulated economic activity" are not only interrelated but are all made worse by "unrestrained free trade capitalism which relentlessly exploits resources and people for profit." He defines globalization as "the domination of the world economy by multinational corporations through the imposition of free trade policies and practices" a

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competition, Toyota's solution was to pay surwages to its workers-an addition to wages that puts its wages "significantly higher than average local wages but well below wages established by collective bargaining" (Vogel, 2008). As an example, the 2006 starting hourly wage of a TMMTX assembly line worker was $15.25 per hour, 25% more than the average local manufacturing wage of $11.55 per hour, a difference that yielded an annual income of $31,720 versus $24,024 (Vogel, 2008). The effectiveness of Toyota's strategy was excellent. The additional $7,700 per year meant that working families could afford better food, healthcare, and living quarters (Vogel, 2008). The strategy was also perfectly legal, as there is no law against offering workers a surwage. The ethics of the strategy, however, are problematic. Surwages paid to workers in the same plant or community have "divisive psychological effects," as those that receive the surwages become defensive, knowing that they are "in a privileged position," and those without the surwages feel resentful (Vogel, 2008). Moreover, the strategy suppresses union organizing, because it is "an unjustifiable risk for one side and seems futile for the other" (Vogel, 2008). Vogel (200

Category: Economics - G