The Influence of Product Markets on Industrial Relations

Abstract

Product markets are the foundation on which industrial relations institutions are built. Trade union strength is partly dependent upon the state of the labour market, but it is imperfections in the product market that are the precondition of their winning benefits for their members. Sectoral agreements consequently formed the basis for collective bargaining in most industrialised countries. But international competition has destroyed this for much of the private sector. Quasi-markets have undermined it for much of the public sector. The paper assesses the empirical economic literature on the impact of product markets. It considers enthnographic insights into how competitive pressures feed through to managerial behaviour. It concludes with alternative strategies – co-operative bargaining, legislative intervention, and consumer campaigns – that seek to defend labour standards from competitive erosion.