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How can globalization weaken collective bargaining in some industries?
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Labour law
Diorite stela inscribed with the Code of Hammurabi, 18th century bce.
Globalization weakens collective bargaining by increasing market competition and enabling companies to relocate operations to regions with lower labor costs. This dynamic creates several specific challenges for organized labour:12
- Replacement of Workers: In industries where tasks can be performed elsewhere, employers may replace domestic workers with a cheaper labour force in different parts of the world, effectively undermining the bargaining power of local unions.2
- Outsourcing: Companies frequently utilize outsourcing to contract work to nonunion providers. This practice reduces the number of employees within a collective bargaining unit and serves as a common point of conflict, as it directly diminishes the union's scope and influence.3
- Structural Shifts: Increased global competition has contributed to a decline in membership within traditional, highly unionized manufacturing sectors, forcing unions to struggle as jobs shift toward newer, less-organized service industries.1
Ultimately, these pressures force unions to constantly adapt their strategies to remain relevant in an environment where the threat of global relocation or subcontracting limits their ability to secure improvements in pay and working conditions.12