Doeringer, Peter B

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Levinson: Determining Forces in Collective Wage Bargaining

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Boston College Law ReviewVolume 8Issue 4 Number 4 Article 147-1-1967Levinson: Determining Forces in Collective WageBargainingPeter B. DoeringerFollow this and additional works at: http://lawdigitalcommons.bc.edu/bclrPart of the Labor and Employment Law CommonsThis Book Review is brought to you for free and open access by the Law Journals at Digital Commons @ Boston College Law School. It has beenaccepted for inclusion in Boston College Law Review by an authorized administrator of Digital Commons @ Boston College Law School. For moreinformation, please contact nick.szydlowski@bc.edu.Recommended CitationPeter B. Doeringer, Levinson: Determining Forces in Collective Wage Bargaining, 8 B.C.L. Rev. 1012(1967), http://lawdigitalcommons.bc.edu/bclr/vol8/iss4/14BOOK REVIEWDetermining Forces in Collective Wage Bargaining. By Harold M. Levin-son. New York: John Wiley & Sons, Inc., 1966. Pp. ix, 283.Professor Levinson prefaces Determining Forces in Collective Wage Bar-gaining with the observation that the problem of systematically explaining theprocess of wage determination, despite considerable theoretical and empiricalanalysis, has "remained largely an intractable one."1 His book represents anattempt to overcome this analytical deadlock by amassing new wage, fringe,and bargaining data for six industries located on the west coast.An evaluation of the success of this study in answering the questionimplicit in its title will depend, in part, upon the predilection of the readertoward an economic or a noneconomic view of collective bargaining. At theoutset, let me admit that my bias, and thus the source of most of my criti-cisms, is toward the former interpretation. The book is not so dominated bythe author's analysis, however, that the reader cannot independently assessthe facts.The study consists of three distinct parts: (1) a brief survey of severalcontemporary appraisals of the forces influencing collective bargaining; (2)case studies of collective bargaining in six west coast industries; and (3) ananalysis of the factors influencing collective bargaining.The six industries studied include three in manufacturing—airframe,lumber, and pulp and paper—and three in nonmanufacturing—longshore, off-shore maritime, and over-the-road trucking. Working with a variety of infor-mation obtained during fifteen months of field work, including interviews withemployers and union representatives, materials from their files, and discus-sions with informed observers, Professor Levinson has assembled a detaileddocumentary of collective bargaining in these industries.The point of departure chosen by the author is that the outcome ofcollective bargaining is influenced by three variables—economic, political, and"pure power." The economic variables employed are the standard ones, suchas profit rates, employment, and output. The political variables are defined asthe pressures placed upon union leaders to negotiate settlements similarenough to those obtained by competing unions to preserve its organizationalstrength and the prestige of its leadership. "Pure power" variables are de-scribed as those factors which "affect the strength and stability of the bargain-ing institutions themselves . . . ."2 These include "primarily those that affectthe union's ability to undertake, and the employer's ability to resist, strikeaction."3As an analytical methodology, without judging the relative weights tobe assigned to the variables, I find little conceptual difficulty with the firsttwo types of influences. Playing the economist's advocate, however, I wouldcontend that the "pure power" variable contains a significant economic com-1012BOOK REVIEWponent, and that to label this as a third influence is to create a self-servingconstruction with analytical implications, which may conceal significant un-derlying causal forces in the wage-determining process? I would suggest,therefore, that the reader view references to "power" influences as beingderived, in large part, from economic factors such as the following: the sizeof strike funds (which are in turn determined by the previous strike activityof the union and the employment experience of the union membership); earn-ings retained by the employer; the state of the labor market; inventorylevels; savings of union members; the ability of the employer to retainmarkets during a strike; and the possibility of maintaining production withsupervisory personnel or new employees. After allowing for the influence ofthese factors, one might well wonder if much is added by an explanation ofthe highly qualitative summary variables such as "employer cohesiveness" or"willingness of the union membership to strike" upon which much emphasisis placed in the descriptive material.The six industry studies represent the major contribution of the book.The pre-1945 collective-bargaining history of each is briefly summarized.For the period 1945 to 1962, there are detailed descriptions of the economicenvironment, the interunion jurisdictional or representational rivalries, thepersonalites of the negotiators who participated in the collective bargaining,and the outcomes of these negotiations. The approach is painstaking, and thematerial is systematically developed. The detail occasionally becomes confus-ing in its abundance, but frequent summarizations are provided for the readerexperiencing difficulty in organizing the data.The industry studies do, however, share one common weakness. Theauthor, in developing materials relating to qualitative factors in bargaining,such as cohesiveness or union rivalry, arrives at conclusions which often seemtoo facile. For example, in contrasting the pattern of wage settlements nego-tiated by the UAW at North American Aviation and those negotiated by theIAM at Lockheed Aircraft, during a period when the two unions were coordi-nating their bargaining strategies, the author indicates that a cost-of-livingescalator clause in the UAW contract provided fifteen cents more in wagesthan the IAM agreement from 1956 to 1958. Not until 1958 did the TAMnegotiate a cost-of-living adjustment. In Douglas Aircraft, however, whereboth unions were represented, the IAM contract was voluntarily reopened inlate 1956 to include the cost-of-living escalator. The author concludes thatthis pattern of wages among these companies was dictated by political con-siderations. In the Douglas case, "coercive comparisons" between the UAWand the IAM led to the voluntary reopener, while the cooperative relationshipbetween the IAM and the UAW reduced the "rivalry pressures" on the IAMand permitted the fifteen-cent cost-of-living disadvantage to persist at Lock-heed.'Such a statement raises many unanswered questions. Can the fifteen-centdifferential be explained by the cooperation? Is the differential per se evidence4 Professor Levinson recognizes these economic components when describing his"pure power" variable, but proceeds to treat "power" as a force which is sufficientlyseparable from economic forces. Pp. 8-9, 18.5 Pp. 62-63.1013BOSTON COLLEGE INDUSTRIAL AND COMMERCIAL LAW REVIEWthat the "pressures" were not as severe as they might have been? What isimplied about the sources of such pressures which permit them to be relievedby cooperation among union leaders? Is "rivalry" caused by leaders' per-sonalities or by membership pressures arising from unfavorable wage compari-sons? Why did interunion cooperation not relieve such pressures at Douglas?In another case, when analyzing the "strength and stability" of thePacific Coast Association of Pulp and Paper Manufacturers, an industry bar-gaining organization, Professor Levinson attributes these characteristics tothe size composition of the Association, the leadership position of one com-pany (Crown Zellerbach), and a series of Association "resolutions" which"provide protection against individual companies gradually undermining thecontracts." 6 While these factors admittedly describe the Association, they donot indicate the nature of the sanctions which bind the Association together.Indeed, I suspect that size composition, leadership, and formal rules would beimpotent factors if there were not a compelling community of interest amongthe employers, a fear of economic reprisal against withdrawal, and a sufficientsecurity of markets from outside competition which made the resolutions self-enforcing. Many of these factors are implicit in the discussion but, I believe,deserve to be made more explicit.These criticisms should not detract from the value of the informationpresented, but are intended to provide only a note of caution to the reader.Special commendation, for example, should be given to chapter 3, dealingwith the pacific coast lumber and pulp and paper industries, and chapter 4,on longshore and offshore maritime. The history of the relationship amongwage patterns in industries closely related by labor and product markets orby input-output connections, and the interplay of the wage-determining forcesin these industries, are eloquently detailed. It provides an interesting pictureof the manner in which established wage patterns may begin to diverge andthen reassemble into new wage patterns. To a student of wage behavior, suchperiods of transition and change are often more illuminating than periods ofstability. For me, these were the most interesting and rewarding sections.The concluding chapter purports to evaluate the descriptive materialspresented earlier in order to determine the relative importance of the threetypes of wage-determining forces mentioned above. The evaluation is disap-pointing. I thoroughly agree with Professor Levinson's concluding observationthat the impression which emerges from his study is of "the extraordinarilycomplex nature of those factors which determine the outcome of any majorcollective bargaining negotiation, a complexity that presents formidable con-ceptual and empirical problems that will have to be dealt with before a morecomplete theory of wage determination under collective bargaining can bedeveloped."7 However, I remain skeptical that, for purposes of explainingand, more importantly, predicting wage behavior, Professor Levinson's ap-proach is more effective than one which relies exclusively upon quantifiableeconomic variables.Lest I leave the impression that I regard all wage setting as being im-mune to noneconomic forces, let me cite an example from the James' study6 P. 93.' P. 276.1014BOOK REVIEWof the Teamsters which clearly establishes, to my satisfaction, that a non-economic factor can be important in determining wage rates, at least in aparticular negotiation and at a particular point in time:Once, after Hoffa had "bargained" and announced triple pay for fiveholidays, I chided him, "Why not six?" The next morning at break-fast he told his top aides that, "Ralph thinks I should have made itsix holidays and thinks I can't change." They chuckled. Two hourslater, after twenty minutes of "bargaining" with surprised em-ployers, he demonstrated how easy it is to change the number "five"to "six."8It is difficult to assert, however, that noneconomic forces can continuously andsystematically be used to exploit the collective-bargaining process in favor ofone party. As the period of time and the level of aggregation at which wagesare studied are increased, it appears that, for many industries, economic forcesbegin to dominate the explanation of wage behavior.° It is this distinctionbetween the short run and the long run which the author fails to make clear.I concur, in general, with Professor Levinson's conclusions regardingeconomic influences, including those contained in the "pure power" factor.I must remain, however, somewhat unmoved by his generalizations whichstress the importance of the influences of noneconomic factors such as motiva-tion, prestige, and political pressure upon the wage-determining process, es-pecially in the long run.In dealing with the economic determinants of wages, Professor Levinsonfinds that the influence of the labor-market variables is inconclusive. Thisjudgment, however, is based on total employment changes and omits such fac-tors as labor-market unemployment rates and changes in labor turnover whichmay be significant. Product-market influences, on the other hand, are found tobe significant. Professor Levinson stresses that barriers to the entry of newfirms into an industry will have a positive effect upon the ability of the unionto maintain organizational strength among the strategic producers in theindustry and will therefore have an impact upon collective bargaining. Thistheory of the relationship between union organizational strength and in-dustrial concentration is quite interesting and deserves further exploration."While the argument about the relative importance of various wage-deter-mining forces still remains unresolved by this book, Professor Levinson hasprovided provocative material for further study.PETER B. DOERINGERInstructor of EconomicsHarvard UniversityJames & James, Hoffa and the Teamsters: A Study of Union Power 26 (1965).9 See Eckstein & Wilson, The Determination of Money Wages in American Industry,76 Q.J. Econ. 379 (1962). Institutional hypotheses are included in their analysis, buteconomic factors are important determinants of the institutional hypotheses.10 See also Levinson, Unionism, Concentration, and Wage Changes: Toward a UnifiedTheory, 20 Ind. & Lab. Rel. Rev. 198 (1967).1015

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