amage to the employee-employer relationship. But this will only occur in a minority of situations. The greatest disadvantages of collective bargaining in a capitalist society lie mainly in the financial arena. Collective bargaining in the form of wage rounds leads to both wage and grade drift. Wage drift leads to higher wage costs for employers and higher inflation within the economy, which in turn leads to higher interest rates and lower investment. Lower investment means that fewer jobs are created, unemployment rises, social welfare payments increase and possibly an increase in the national debt. Following these consequences there would be less money in the economy overall in real terms. Grade drift is a problem for employers which is linked to wage drift. Grade drift occurs where secure jobs are one of the trade unions aims in collective bargaining. As jobs become more automated with the advance of technology, employers are forced to keep staff to keep to previous agreements. As companies no longer need as many staff the workforce tends to get older, with rising wage costs and mainly static skill levels. In Ireland over the last 25 years, the focus of collective bargaining has been widened to a nation-wide one from localised and industry level, with various degrees of success. This focus on the nation-wide picture has led to 7 national wage agreements, 2 national understandings, and three other agreements or programmes; the Programme for National Recovery (PNR), The Programme for Economic and Social Progress and the Programme for Competitiveness and Work. It is my opinion that centralised collective bargaining has evolved in much the same manner as collective bargaining itself; focusing on purely economic issues, and then steadily including more social issues. While the national wage agreement secured certain pay increases, the real value of those wages dropped. It was during the era of the National Wage Agreements that inflation ro...
