Bargaining Theory Of Collective Bargaining

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¬¬¬¬Wage Bargaining and Trade Unions Activity.
Introduction to Wages and Collective Bargaining:
Wage Bargaining in simple terms indicates negotiation between representatives of employees and employers in order to agree levels of pay. Collective bargaining constitutes one of the core tools for trade unions. The ILO defines it as "voluntary negotiations between employers or employers' organisations and workers' organisation, with a view to the regulation of terms and conditions of employment by collective agreements" Additionally, collective bargaining refers to the course or means of bargaining through dialogue among the partners involved. The outcome thereby is not necessarily an agreement. Collective bargaining is used as a system to improve
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Smith hinted at such a theory when he noted that employers had greater bargaining strength than employees. Employers were in a better position to unify their opposition to employee demands, and employers were also able to withstand the loss of income for a longer period than could the employees. This idea was developed to a considerable extent by John Davidson, who proposed in The Bargain Theory of Wages (1898) that the determination of wages is an extremely complicated and tiresome process involving several influences that interact to ascertain the relative bargaining strength of the…show more content…
Micro Economics deals with the concept of Demand and Supply, Elasticity and Different Market Conditions. The different Factors of Production contribute in the Production Process , hence Wage Determination is an important aspect of Micro Economics. Wage includes all forms of remuneration for all human productive activities using one's skills. Thus, wage is the combination of salary, bonus and other forms of compensation. Wage is paid for work as various as that of a blue-collar mechanic, as well as that of a lawyer. Most Labour markets are subjected to Imperfections. These may be both on the demand side and the supply side. Improving productivities is one of the most certain ways of increasing wages , although there is little trade unions can do per se. Trade unions may of course be involved in agreements with employers to increase

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