Labour Markets, Trade Unions, and the Order of Market Moves
1982; Wiley; Volume: 15; Issue: 2 Linguagem: Inglês
10.2307/134780
ISSN1540-5982
Autores Tópico(s)Economic Theory and Policy
ResumoThe trade union is an organization of workers as parties of the second move, as price-takers, and its strategy includes the threat and the fixing of supply. The professional association is an organization of workers as parties of the first move, as price-setters, and its strategy includes the advertisement of quality and the fixing of price. Price regulation by governments converts price-setters to price-takers, and increases the volume of threats. Vertical integration of threats may occur when the parties who interact in labour markets also interact in goods markets. Exit and voice are tactics of the party of the second move. Marches dii travail, lunions ouvrieres et strlucture des manwe uvres sur ces marches. Un syndicat ouvrier est une organisation de travailleurs qui sur le terrain des op6rations que constitue le march6 du travail est la partie qui reagit (party of the second move) i.e. la partie qui accepte le prix comme une donn6e et qui se donne une strat6gie qui entre autres choses va utiliser les menaces et le controle de l'offre. Une association professionnelle est une organisation de travailleurs qui pour sa part sur le terrain des op6rations que constitue le march6 du travail est la partie qui a l'initiative (party of the first move) i.e. celle qui 6tablit le niveau du prix et dont la strat6gie va s'accomplir en utilisant entre autres choses la publicit6 quant a la qualit6 du service et le controle du prix. La r6glementation des prix par les gouvernements transforme les d6finisseurs de prix en parties a qui l'on dicte le niveau des prix et va accroitre le volume de menaces sur le marche du travail. On peut meme observer une int6gration verticale de menaces quand les memes parties s'affrontent a la fois sur le march6 du travail et sur le march6 des biens. Il appert que retrait (exit) et repr6sentation (voice) sont des tactiques de la partie quii reagit. This paper explores a relationship heretofore ignored in labour economics, that between collective action by workers (defined broadly to include all sellers of labour services) and the order of market moves. In markets where the worker is the price-setter, as in many markets for personal services, he is the party of the first move, establishing and making known the offered price. In such markets collective action centres on price and information, the variables in terms of which the market move is defined. The worker does not threaten the buyer of labour services because 'the threat Canadian Journal of Economics / Revue canadienne d'Economique, XV, No. 2 May / mai 1982. Printed in Canada / Imprime au Canada 0008-4085 / 82 / 0000-0263 $01.50 (?) 1982 Canadian Economics Association This content downloaded from 207.46.13.52 on Fri, 21 Oct 2016 05:59:39 UTC All use subject to http://about.jstor.org/terms 264 / Sheila B. Eastman fixes a course of reaction, of response' (Schelling, 1963, 124), not a course of action. In markets where the worker is the price-taker, as in most blue-collar occupations, he is the party of the second move, deciding whether or not to transact at the offered price. Here the threat is an available and frequently utilized strategy. Quantity, rather than price, is the decision variable when the worker has second move, and the cartel of price-takers adopts a strategy based on the regulation of market quantity rather than market price. Whether the worker has first or second move, collective action to improve the terms offered by buyers is effective only in the presence of barriers to entry. Where the worker has first move, the barrier is usually established by constraining the market at a previous stage of production; where the worker has second move, by constraining the party of the first move. In this paper the trade union is defined as the organization of workers as parties of the second move; the occupational association as the organization of workers as parties of the first move. Many popular and academic statements to the contrary, the two differ fundamentally. MOVE STRUCTURE OF MARKETS The long-run move structure of labour markets is symmetrical, in that there is no party of the first move and no party of the second move, only when the individual buyer is a monopsonist and the individual seller is a monopolist. In this case both buyer and seller are price-makers, influencing the price of labour services by their choice of quantity, and there is no order of market moves arising from competitive characteristics on the buying and selling sides of the market. Such labour markets are uncommon, since long-run monopsony is considered rare, and there are few workers who can influence the price of their services by varying the quantity supplied. The structure of market moves is asymmetrical and ordered where a monopsonistic buyer transacts with a seller who has no individual influence on price, or when a monopolistic seller deals with a buyer who has no individual influence on price. Most markets for labour services, whether the buyer is ultimate consumer or intermediate economic agent, are markets in which it is reasonable to assume that neither buyer nor seller individually influences long-run price. Yet in such markets the move structure of the market is asymmetrical. One party is consistently the price-setter or price-announcer, the other the price-taker. The former, in consequence, has the first market move, the latter
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