Economic performance and strike activity : a macroeconomic model of eight countries, 1955-1981

Abstract

After having explored the articles by Orley Ashenfelter and George Johnson, and Martin Paldam and Peter Pederson, it was discovered that there existed a strong relationship between strike activity and economic performance, But, how and to what extent that relationship existed was unknown., The original belief was that there existed a positive relationship between economic performance and strike activity. That was sufficient from a philosophical point of view, to allow for a more comprehensive study of the relationship. It was quickly learned that it would be an impossible task, given all the econometric limitations, to prove that this relationship existed. However, it was soon discovered that strikes result, in principle, from a breakdown in the collective bargaining process, an impass at the negotiation stage. Since it was also known, that both sides prepare vast amounts of information during the pre-negotiation stage, it was assumed that when labour and management, or labour, management and government, as the case may be, enter into the collective bargaining process they utilize accumulated economic information as a basis for offers and counter-offers. Given the nature of these negotiations, particularly, in Canada, there would eventually be an impasse, and a resulting strike or lockout. Therefore, it was concluded that the economic variables utilized in the pre-negotiation stage of the collective bargaining process would be related, in some way, to the level of industrial conflict. Thus, the development of this study was initiated. The study would explore the relationship between economic performance and strike activity through the use of an econometric model, as well as an analysis of the historical development of industrial relations institutions in each of the eight countries that will be analysed in this study I Australia, Austria, Canada, Japan, Sweden, the United States, the United Kingdom, and West Germany. Later in the study, an entire chapter will be devoted strictly to Canada.