Collective Bargaining

Posted: October 17th, 2013

Collective Bargaining

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Collective Bargaining

Industrial Relations and Macroeconomics

. Industrial relations can affect the labor force, purchasing power and production processes that subsequently affect a country’s economic growth (Morley, Gunnigle and Collings, 2006). Negative factors like industrial actions are detrimental to economic growth of a nation. This is because the industrial action is as a result of trade disputes. Trade disputes directly affect labor productivity because they lead to work stoppages. A case study is Nigeria that had its economy affected by the numerous trade disputes it faced over the last twenty years. The disputes were as a result of the public sector’s monopoly of the economy. This was evident in the oil sector where there was the government’s monopoly of the sector led to weakness in the distribution and production chains. The industrial actions of the stake holders in the distribution chain directly influenced the nation. The Nigerian National Petroleum Cooperation’s monopoly was detrimental to the nation’s economic growth.

Empirical Test

In the empirical test, the case study of Nigeria’s economy will be used to show the relationship between macroeconomics and Industrial elations. Between the period of 1975-1981, Nigeria experienced approximately 1388 trade disputes. There were 4,618,764 man-days lost in this period while the work stoppages were 845. This was before the linearization of its economy. In this test, economic growth will be investigated through the country’s Real Gross Domestic Product (RGDP). The variable associated with Industrial Relations will be man-days lost (A), number of trade disputes (U) and work stoppages (O). The test will assume that the variables exhibit a linear relationship. AR represents the auto-regressive scheme. The process used is:

The tests show that work stoppages and trade disputes negatively affect the Real Gross Domestic Product.

Comparative Industrial Relations

Human labor is the most important resource of a country (O’Brien and Marakas, 2009). This is because it directly affects the productivity of the nation. Other factors like capital labor productivity have a relatively weak influence on a nation’s productivity. This therefore shows that the Industrial Relations have an influence on the Gross National Product growth of a country. The issues pertaining to labor have a direct influence on the Gross Domestic Product that ultimately affects the GNP.

Reference List

Morley, M., Gunnigle, P., &, D. G. (2006). Global industrial relations. London: Routledge.

O’Brien, J. A., & Marakas, G. M. (2009). Management information systems. Boston: McGraw-Hill Irwin.