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Background. New to law and economics – wanted to discuss ongoing “broader strokes” discussions Economic modelling of trade union and employer behaviour not really well-developed… Labor platforms with collective bargaining agreements (CBAs)

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Presentation Transcript

  1. Background • New to law and economics – wanted to discuss ongoing “broader strokes” discussions • Economic modelling of trade union and employer behaviour not really well-developed… • Labor platforms with collective bargaining agreements (CBAs) • Denmark claimed to have “the world’s first”… urge to falsify this claim in a peer-reviewed journal • Discuss regulation of algorithmic management practices • Opens opportunities for higher regulatory compliance (Söderqvist 2016, 2017, 2018)

  2. Interview with firms • Interviews with firms to revealrationale of CBAs, and how theywork/don’t work for them • Three firms • A fourth interview “rannutisanden” • Institutional background • Framing of issues brought up ininterviewes

  3. Discussions on law and economics • Law and economics is a field of study which applies economic theory to analyse the effects and efficiencies of laws • Critique of (neoclassical) economic analysis of law consider interpersonal and third party moral costs of regulations (i.e. market design might be a preference in a populations utility function, markets for organs, for example) • Expand on Calabresi’s observation to cover industrial relations, and thus extend beyond laws to other regulations • People certainly have preferences over what is or isn’t included in their employment (or other wage labour) contracts

  4. Swedish industrial relations • Swedish trade unions and employers’ associations act on a national level, setting sectoral regulations (sometimes central) • Assuming firms and employees have preferences over their work relationship in firms (internal labour markets), such preferences can be enshrined in either law or CBAs • These institutions act as regulatory preference aggregators, and address a broader scope than just profit maximization (but does not exclude this important variable) • Collective bargaining is repeated games in addressing social costs • Social costs are discovered over time • Legislators play “garden tending role” assuring union and employer parties addressmatters in the public’s interest • The preferences expressed, and outcomes of this system has arguably led to better performance in a number of resilience metrics • Employment, wage development, productivity, income inequality, re-skilling after redundancies • These are very “broader strokes” issues of our time

  5. Result of interviews • Firms have voluntarily signed agreements with no prior industrial action (striking) • Firms see CBAs as hallmark of “seriousity” and legitimacy • One firm, in particular, devotes much time to automating functions of being a temporary work agency (TWA) • Biggest problem lies in transaction costs of standardizing regulations in laws and CBA • Issues of compliance related transaction costs • Search costs and lack of relevant (wage) data seems to be their most • No firm (small sample) mentions wage or salary levels as problematic • Firms dependent on flexibility provisions in the agreements, using fixed-term contracts • Future developments want more focus on digital solutions in regulations

  6. Institutional background • Short history of the development of TWA CBAs in Sweden (using Walter 2012 and Lundh 2010 as main sources) • Focus on rationality and strategies of unions when faced with inconvenient fact that TWAs would be legalized, not presenting new historical facts • The 1989 Supreme Court example added as interesting example… and flair • Also some discussion on employment classification

  7. L&E analysis • Elaborating on our model, briefly describing how regulatory preferences are set in our institutional setting • Discussion on employment classification • Externalization or internalization of labour? • Free markets or commandified decision structures? • Topic to elaborate upon further? • TWA CBAs • Why unions are averse to such? • Regulatory compliance come at higher transaction costs • Higher risk of social costs for dangerous (blue collar) work • Differentiation in replacability of labor reflected in white and blue collar CBAs • Rationality of differentiated flexibility provisions • Compliance-related transaction costs

  8. Closing discussion • Flexibility of labour regulations • Resilience metrics related to • Focus on compliance-related transaction costs • “The expansion of collective bargaining to also encompass algorithmic management practices is interesting, as unions may discover that such technologies can help improve CBA compliance, given there are well-functioning forums to address discovered social costs of such practices over time” • Coase’s introduction of innovations likely created better coordination in firms = managements orders could be attained with better compliance • If employers’ pursue one sided-flexibility strategies, there’s a significant risk of backlash, if regulatory preferences of labor are left unadressed • Unions (blue collar) are increasingly sceptical of TWA arrangements • Young people do not demand more flexible work (78 percent) or variable income (74 percent)

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