PurposeThe purpose of this paper is twofold: first, to reassert the persistent association of the decline in collective bargaining with the increase in income inequality, the fall in the share of wages in national income and deterioration in macroeconomic performance in the UK; and second, to present case studies affirming concrete outcomes of organisational collective bargaining for workers, in terms of pay, job quality, working hours and work-life balance.Design/methodology/approachThe paper is based upon two methodological approaches. First, econometric analyses using industry-level and firm-level data for advanced and emerging economies testing the relationship between declining union density, collective bargaining coverage and the fall in the share of wages in national income. Second, it reports on ten in-depth case studies of collective bargaining each based upon analysis of collective bargaining agreements plus in-depth interviews with the actors party to them: in total, 16 trade union officers, 16 members and 11 employer representatives.FindingsThere is robust evidence of the effects of different measures of bargaining power on the labour share including union density, welfare state retrenchment, minimum wages and female employment. The case studies appear to address a legacy of deregulated industrial relations. A number demonstrate the reinvigoration of collective bargaining at the organisational and sectoral level, addressing the two-tier workforce and contractual differentiation, alongside the consequences of government pay policies for equality.Research limitations/implicationsThe case studies represent a purposive sample and therefore findings are not generalisable; researchers are encouraged to test the suggested propositions further.Practical implicationsThe paper proposes that tackling income inequality requires a restructuring of the institutional framework in which bargaining takes place and a level playing field where the bargaining power of labour is more in balance with that of capital. Collective bargaining addresses a number of the issues raised by the Taylor Review of Modern Working Practices as essential for “good work”, yet is at odds with the review’s assumptions and remedies. The case studies reiterate the importance of the development of strong workplace representation and bargaining at workplace level, which advocates for non-members and provides a basis for union recruitment, organisation and wider employee engagement.Originality/valueThe paper indicates that there may be limits to employer commitment to deregulated employment relations. The emergence of new or reinvigorated collective agreements may represent a concession by employers that a “free”, individualised, deinstitutionalised, precarious approach to industrial relations, based on wage suppression and work intensification, is not in their interests in the long run.
Inequality between capital and labour and among wage-earners: the role of collective bargaining and trade unions