Why capital hires labor: a bargaining perspective

Article Abstract:

A bargaining model is developed to illustrate capital-managed firms (KMFs), which are more common than labor-managed firms (LMFs). The required use of noncontractible investments in certain physical assets in production results in the creation of KMFs. Niches that require general-purpose physical assets and specialized human capital tend to create LMFs. The bargaining model indicates that KMFs can continue to engage in competitive markets when LMFs produce a greater overall surplus.

Capital assets, Labor economics, Industrial organization

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Compulsory centralization of collective bargaining in South Africa

Article Abstract:

A model of the ergo omnes power of South Africa's industrial councils (ICs) is formed to determine the efficiency of the compulsory centralization of collective bargaining in the country. Ergo omnes rules permit the Labor Ministry to implement IC decisions to all firms in an industry. Results show that the removal of the ergo omnes rule will stimulate the growth of small firms. The model predicts stiff opposition from large firms on the issue of abolishing the rule.

South Africa, Collective bargaining unit

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Taxes, strikes and wages

Article Abstract:

The effects of taxes on strike activity and wage bargaining by labor unions were examined using a two period-screening model. The model assumes that the union demands wage increases and calls a strike if the demand is rejected while the firm reacts to the union's actions. Results showed that a more progressive income tax, lower income taxes and higher payroll taxes reduce wages and strike incidence. Thus, tax policy can be an effective deterrent of strikes.

Public Finance Activities, Wage Administration, Personal Income Taxes, Strikes, Taxation, Compensation management, Wages, Wages and salaries, Personal income tax

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