Economic Dilemmas of Collective Bargaining

Abstract

Two characteristics of collective bargaining make current economic problems difficult to resolve. First, many of these problems arise at the national or industry level, whereas collective bargaining generally takes place at the plant, com pany, or regional level. Unable to deal with basic causes, the parties adapt, as best they can, to symptoms. Given the cur rent institutions, government attempts to make national eco nomic policy relevant to private bargaining may create new inequities and risks within the private sector. Second, even when the level of decision-making coincides with that of the problem, current bargaining practices often prevent effective solutions. Pursuing separate rather than mutual goals, each party tends to measure his progress by the concessions won. But this system encourages the other party to react by minimiz ing the cost of his concessions through adjustments in vari ables outside the bargaining process. This routine of conces sions and reactions tends to frustrate problem-solving. How ever, recent experience also includes cases in which the parties, pursuing mutual goals, have been willing to increase the number of bargaining variables sufficiently to permit effective mutual commitments to the solution of specific problems.