Market Power and Workplace Labour Relations: Analytical Issues and Empirical Patterns Emerging from Australia’s Experience with Enterprise Bargaining

This paper examines the distributional consequences of the recent transformation of the industrial relations system in Australia, with a shift from a collective bargaining system with comprehensive involvement of trade unions at both the national and industry levels to a system based on workplace bargaining with no union involvement. The paper presents the results of regression analyses which reveal well-defined differences between agreements involving unions in the bargaining process and the remainder of the population. The paper also outlines a conceptual framework for analyzing non-collective bargaining, focusing on a particular source of power asymmetry the rather unequal levels of market power available to the employer and the individual worker in the absence of a union. E-mail: [email protected] Fax: +61 2 9351 6948 Ph: (W) +61 2 9351 2747; (H) +61 2 9555 8746 Department of Economics The University of Sydney NSW 2006 Australia Market Power and Workplace Labour Relations: Analytical Issues and Empirical Patterns Emerging from Australia’s Experience with Enterprise Bargaining* “In the long-run the workman may be as necessary to his master as his master is to him; but the necessity is not so immediate.” -Adam Smith, The Wealth of Nations, Volume 1, p.84.