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The effects of changes in labour legislation on strike activity in British Columbia : 1945-75 Fisher, Edward G. 1979

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THE EFFECTS OF CHANGES IN LABOUR LEGISLATION ON STRIKE ACTIVITY IN BRITISH COLUMBIA: 1945-75 by Edward G. FISHER B . A . , U n i v e r s i t y o f C o l o r a d o , 1967 M . A . , I n d i a n a U n i v e r s i t y , 1970 A THESIS SUBMITTED IN PARTIAL FULFILMENT OF THE REQUIREMENT FOR THE DEGREE OF DOCTOR OF PHILOSOPHY i n THE FACULTY OP GRADUATE STUDIES i n t h e Department o f ECONOMICS We a c c e p t t h i s t h e s i s as c o n f o r m i n g t o t h e r e q u i r e d s t a n d a r d THE UNIVERSITY OF BRITISH COLUMBIA C j M a r c h , 1979 © E d w a r d G. F i s h e r , 1979 In p r e s e n t i n g t h i s t h e s i s i n p a r t i a l f u l f i l m e n t o f the r e q u i r e m e n t s f o r an advanced degree a t the U n i v e r s i t y o f B r i t i s h C o l u m b i a , I agree t h a t t h e L i b r a r y s h a l l make i t f r e e l y a v a i l a b l e f o r r e f e r e n c e and s t u d y . I f u r t h e r agree t h a t p e r m i s s i o n f o r e x t e n s i v e c o p y i n g o f t h i s t h e s i s f o r s c h o l a r l y purposes may be g r a n t e d by the Head o f my Department o r by h i s r e p r e s e n t a t i v e s . I t i s u n d e r s t o o d t h a t p u b l i c a t i o n , i n p a r t o r i n w h o l e , o r the c o p y i n g o f t h i s t h e s i s f o r f i n a n c i a l g a i n s h a l l n o t be a l l o w e d w i t h o u t my w r i t t e n p e r m i s s i o n . Department o f Economics The U n i v e r s i t y o f B r i t i s h C o l u m b i a , V a n c o u v e r , Canada V6T 1W5 Date 3Q Mo^CA t ^ 1 (1) ABSTRACT T h i s d i s s e r t a t i o n s t u d i e s t h e e f f e c t s o f changes i n l a b o u r l e g i s l a t i o n on s t r i k e a c t i v i t y i n B r i t i s h Columbia d u r i n g 1945-75. I t d e v e l o p s two t h e o r i e s o f s t r i k e a c t i v i t y and uses r e g r e s s i o n a n a l y s i s where dummary v a r i a b l e s model t h e e f f e c t s o f changes i n l a b o u r l e g i s -l a t i o n on s t r i k e a c t i v i t y . The two t h e o r i e s s u g g e s t e d economic d e t e r -minants o f s t r i k e a c t i v i t y which were used i n t h e r e g r e s s i o n a n a l y s i s . One t h e o r y , a s t r i k e - a s - a n - i n v e s t m e n t t h e o r y o f b a r g a i n i n g under u n c e r t a i n t y , i s a p p l i e d t o f i r s t agreement s t r i k e s and to c o n -t r a c t renewal s t r i k e s . The o t h e r t h e o r y , a " p r e s s u r e - v a l v e t h e o r y " which e n v i s a g e s s t r i k e s as means f o r r e l e a s i n g p e n t - u p f r u s t r a t i o n s , i s a p p l i e d t o s t r i k e s d u r i n g t h e t e r m . Both t h e o r i e s b u i l d upon t h e t h e o r i e s t h a t preceded them but m o d i f y t h e i r p r e d e c e s s o r s . For i n s t a n c e , each t h e o r y y i e l d s an economic d e t e r m i n a n t o f s t r i k e a c t i v i t y t h a t was not d e r i v e d e x p l i c i t l y from t h e t h e o r i e s t h a t preceded i t . M e t h o d o l o g i c a l l y , t h i s r e s e a r c h p r o j e c t d e p a r t s i n a t l e a s t f o u r ways from t h e r e s e a r c h p r o j e c t i t most c l o s e l y r e s e m b l e s : t h e 1969 s t u d y by A s h e n f e l t e r and Johnson o f t h e l a b o u r l a w - s t r i k e r e l a t i o n -s h i p i n t h e U n i t e d S t a t e s . F i r s t , s t r i k e a c t i v i t y i s c l a s s i f i e d by c o n t r a c t s t a t u s : f i r s t a g r e e m e n t , c o n t r a c t renewal and d u r i n g t h e t e r m . S e c o n d , a d i f f e r e n t s e t o f economic d e t e r m i n a n t s i s a p p l i e d t o s t r i k e s d u r i n g t h e t e r m , as opposed t o s t r i k e s t h a t i s s u e from i n t e r e s t d i s p u t e s . That i s , t h e two t h e o r i e s s u g g e s t d i f f e r e n t s e t s o f economic d e t e r m i n a n t s . T h i r d , c o n t r a c t e x p i r y d a t a were g a t h e r e d and used t o c o n s t r u c t i n c i d e n c e measures o f s t r i k e a c t i v i t y , such as t h e r a t i o o f c o n t r a c t renewal s t r i k e s t o e x p i r i e s . ( I n c i d e n c e measures a r e e m p i r i c a l e s t i m a t e s o f ( i i ) t h e p r o b a b i l i t y t h a t s t r i k e s w i l l t a k e p l a c e . ) F o u r t h , not j u s t o n e , but two hypotheses a r e t e s t e d c o n c e r n i n g the e f f e c t s o f changes i n l a b o u r l e g i s l a t i o n on s t r i k e a c t i v i t y . One h y p o t h e s i s , t h e c o n v e n t i o n a l h y p o t h e s i s , t e s t s whether o r not t h e l e v e l o f s t r i k e a c t i v i t y changes w h i l e t h e new s t a t u t e i s i n f o r c e . The o t h e r h y p o t h e s i s t e s t s whether o r not o n e - o r t w o - y e a r changes i n t h e l e v e l o f s t r i k e a c t i v i t y accom-pany s t a t u t o r y c h a n g e . In a d d i t i o n , a c t u a l p r o f i t d a t a were g a t h e r e d and used as an i n d i c a t o r o f f i r m s ' " a b i l i t y t o pay" a n d / o r t h e i r a b i l i t y t o w i t h s t a n d s t r i k e s . I t i s i n f e r r e d from t h e r e g r e s s i o n r e s u l t s t h a t changes i n l a b o u r l e g i s l a t i o n had some e f f e c t on s t r i k e a c t i v i t y . However, s t a t -i s t i c a l l y s i g n i f i c a n t e f f e c t s were not o b t a i n e d f o r t h e t h e o r e t i c a l l y most a p p e a l i n g s t r i k e m e a s u r e s - i n c i d e n c e m e a s u r e s . There i s some e v i d e n c e t h a t r e c e n t l a b o u r a c t s o f B r i t i s h Columbia were a s s o c i a t e d w i t h a r e l a t i v e d e c l i n e i n t h e number o f s t r i k e s — p a r t i c u l a r l y o f s t r i k e s d u r i n g t h e term and c o n t r a c t renewal s t r i k e s . These s t a t u t e s were l e s s i n t e r v e n t i o n i s t , l e s s a d j u d i c a t i v e a n d , i n p r a c t i c e , l e s s p u n i t i v e than f o r m e r a c t s o f B r i t i s h C o l u m b i a . S u b j e c t i v e a s s e s s m e n t s i n d i c a t e , i n p a r t i c u l a r , t h a t t h e r e need not be a c a u s a l r e l a t i o n s h i p between changes i n l a b o u r l e g i s l a t i o n and the p e r c e i v e d d e c l i n e i n w i l d -c a t s t r i k e s . ( i i i ) TABLE OF CONTENTS Page ABSTRACT. ( i ) TABLE OF CONTENTS ( i i i ) LIST OF TABLES ( v i i i ) LIST OF FIGURES ( x i ) NOMENCLATURE ( x i i ) ACKNOWLEDGEMENTS ( x i v ) INTRODUCTION 1 C h a p t e r 1 . A REVIEW OF THE EMPIRICAL LITERATURE CONCERNING STRIKE ACTIVITY AND LABOUR LEGISLATION 7 1.1 S t u d i e s U s i n g R e g r e s s i o n A n a l y s i s 8 1 . 2 S t u d i e s o f R e g i o n a l P a t t e r n s and R e g i o n a l D e t e r m i n a n t s o f S t r i k e A c t i v i t y 10 1 . 3 S t u d i e s U s i n g Measures o f t h e I n c i d e n c e o f S t r i k e and t h e S t r i k e E x p i r y 10 1 . 4 S t u d i e s Where S t r i k e Data were D i s a g g r e g a t e d by C o n t r a c t S t a t u s 13 1 . 5 S t u d i e s o f the R e l a t i v e Impact o f V o l u n t a r y Versus Compulsory Modes o f D i s p u t e R e s o l u t i o n 14 1 . 6 Concl u s i o n 16 ( i v ) C h a p t e r Page 2 . A STRIKE-AS-AN-INVESTMENT THEORY OF BARGAINING UNDER UNCERTAINTY 18 2.1 The B a s i c Framework 19 2 . 2 The F i r m 23 2 . 3 The Union 31 2 . 4 F e a t u r e s o f t h e Two O b j e c t i v e F u n c t i o n s . . . 37 2 . 5 F e a s i b l e S e t s 38 2 . 6 The S u b j e c t i v e J o i n t P r o b a b i l i t y D e n s i t y F u n c t i o n s 41 2 . 7 The B a s i c Shapes o f t h e p . d . f . s 45 2 . 8 O b j e c t i v e F u n c t i o n s and D e c i s i o n R u l e s . . . . 57 2 . 9 The Course o f N e g o t i a t i o n s : C o n c e s s i o n a r y B e h a v i o r , Impasses and S e t t l e m e n t s 61 2 . 1 0 S t r i k e Measures and S t r i k e " D e t e r m i n a n t s " . . 69 2.11 C o n c l u s i o n . . 77 3 . PUBLIC POLICY AND THE RESOLUTION OF INDUSTRIAL DISPUTES THROUGH STRIKE ACTION IN BRITISH COLUMBIA: 1945-75 78 3.1 Changes i n t h e General Labour R e l a t i o n s Laws o f B r i t i s h C o l u m b i a : 1945-75 79 3 . 2 S t r i k e A c t i v i t y i n B r i t i s h C o l u m b i a : 1945-75 88 3 . 3 S t r i k e - R e l a t e d I s s u e s and Data 98 3 . 4 W i l d c a t S t r i k e s i n B r i t i s h C o l u m b i a : 1945-75 106 3 . 5 C o n c l u s i o n 116 (v) C h a p t e r Page 4 . THE EFFECTS OF CHANGES IN LABOUR LEGISLATION STRIKE ACTIVITY IN BRITISH COLUMBIA 118 4.1 The R e g r e s s i o n E q u a t i o n s 120 4 . 2 The Data 129 4 . 3 The Time P e r i o d to be Covered i n t h e R e g r e s s i o n s 137 4 . 4 1945-75 Changes i n B r i t i s h Columbia Labour L e g i s l a t i o n and t h e i r Expected E f f e c t s on S t r i k e A c t i v i t y 143 4 . 5 Hypotheses t o be T e s t e d and Dummy V a r i a b l e C o n f i g u r a t i o n s 150 4 . 6 General E f f e c t s o f Changes i n Labour L e g i s l a t i o n on S t r i k e A c t i v i t y i n B r i t i s h C o l u m b i a : 1950-75 151 4 . 7 S e l e c t e d E f f e c t s o f Changes i n Labour L e g i s l a t i o n on S t r i k e A c t i v i t y i n B r i t i s h C o l u m b i a : 1950-75 . . . 163 4 . 8 Comments and E x t e n s i o n s 171 4 . 9 C o n c l u s i o n s 172 BIBLIOGRAPHY . . . . • 177 Appendix A . A REVIEW OF STRIKE-AS-AN-INVESTMENT BARGAINING THEORIES A . l The A s h e n f e l t e r and Johnson Theory A . 2 The Eaton Theory A . 3 The H e i s e r Theory A-.4 The J o h n s t o n Theory . . . . . . . A . 5 The R a b i n o v i t c h and Swary T h e o r y . A . 6 C o n c l u s i o n 188 189 191 196 211 224 228 ( v i ) Appendix Page B. THE 1945-75 CHANGES IN THE GENERAL LABOUR RELATIONS LAWS OF BRITISH COLUMBIA 230 B . l The F i r s t Post-War Decade o f Labour L e g i s l a t i o n i n B r i t i s h Columbia . . . 231 B . 2 The Labour R e l a t i o n s A c t 237 B . 3 The T r a d e - u n i o n s A c t , 1959 239 B . 4 The Amendments to the Labour R e l a t i o n s A c t 240 B . 5 The M e d i a t i o n Commission A c t 244 B . 6 The Labour Code o f B r i t i s h Columbia. 248 B . 7 Labour Code Amendments, S t a t u t e s C o n c e r n -i n g P r o v i n c i a l Employee B a r g a i n i n g and the C o l l e c t i v e B a r g a i n i n g C o n t i n u a t i o n A c t 252 B. 8 A R e c a p i t u l a t i o n o f the E v o l u t i o n o f Labour R e l a t i o n s P o l i c y i n B r i t i s h Columbia 255 C. THE DATA 256 C. l " B r i t i s h Columbia S t r i k e D a t a , " 1945-75 . . . . 256 C.2 " B r i t i s h Columbia E x p i r y D a t a , " 1945-75 . . . . 257 C . 3 "Number o f New C e r t i f i c a t i o n s i n B r i t i s h C o l u m b i a , " 1945-75 . . . 261 C . 4 " B r i t i s h Columbia Average Weekly Wages and S a l a r i e s , " 1 9 4 8 - 7 5 , S e a s o n a l l y A d j u s t e d . . . . 262 C.5 " B r i t i s h Columbia C o r p o r a t e P r o f i t Data ( B e f o r e T a x e s ) , " 1 9 5 0 - 7 5 , S e a s o n a l l y A d j u s t e d . . . 263 C.6 "Average Age o f the Employed (Non-A g r i c u l t u r a l ) Work Force o f B r i t i s h C o l u m b i a , " 1 9 5 0 - 7 5 , S e a s o n a l l y A d j u s t e d 267 ( v i i ) Appendix Page C.7 "Unemployment Rate f o r . B r i t i s h C o l u m b i a , " 1 9 5 0 - 7 5 , S e a s o n a l l y A d j u s t e d 269.-C . 8 "Vancouver Consumer P r i c e I n d e x , " 1949-75 271 D. INDUSTRIES COVERED BY THE ENTIRE SAMPLE AND BY THE RANDOM SAMPLE OF EXPIRIES 272 E. CLASSIFICATIONS OF REASONS GIVEN FOR WILDCAT STRIKES IN BRITISH COLUMBIA: 1945-75 275 F. THE STRIKE-EXPIRY RELATIONSHIP IN BRITISH COLUMBIA: 1945-75 279 G. TABLES OF QUARTERLY DUMMY VARIABLE SCHEMES FOR CHANGES IN LABOUR LEGISLATION IN BRITISH COLUMBIA: 1950-75 . . . • 282 ( v i i i ) LIST OF TABLES Number T i t l e Page 1 Number and Average D u r a t i o n o f S t r i k e s C l a s s i f i e d by C o n t r a c t S t a t u s and by J u r i s d i c t i o n i n B r i t i s h C o l u m b i a : 1945-75 . . . . • 91 2 The Annual P a t t e r n o f S t r i k e s i n t h e J u r i s d i c t i o n o f B r i t i s h Columbia C l a s s i f i e d by Key C o n t r a c t S t a t u s : 1945-75 . . . . • 94 3 The P e r c e n t a g e o f S t r i k e s w i t h i n t h e J u r i s d i c t i o n o f B r i t i s h Columbia by I n d u s t r y : 1945-75 97 4 The L e g a l i t y o f S t r i k e s C l a s s i f i e d by C o n t r a c t S t a t u s w i t h i n t h e J u r i s d i c t i o n o f B r i t i s h C o l u m b i a : 1945-75 100 5 The L e g a l i t y o f S t r i k e s C l a s s i f i e d by C o n t r a c t S t a t u s w i t h i n t h e F e d e r a l Government's J u r i s d i c t i o n s i n B r i t i s h C o l u m b i a : 1945-75 101 6 Legal Measures Used t o R e s o l v e S t r i k e s C l a s s i f i e d by J u r i s d i c t i o n i n B r i t i s h C o l u m b i a : 1 9 4 5 - 7 5 . . . . 103 7 The Modes o f D i s p u t e R e s o l u t i o n Employed D u r i n g S t r i k e A c t i o n C l a s s i f i e d by C o n t r a c t S t a t u s w i t h i n B r i t i s h C o l u m b i a ' s J u r i s d i c t i o n : 1945-75 105 8 The P a t t e r n o f W i l d c a t S t r i k e s w i t h i n S e l e c t e d I n d u s t r i e s and I n d u s t r i a l Groupings i n the J u r i s d i c t i o n o f B r i t i s h C o l u m b i a : 1960-75 109 9 Reasons f o r W i l d c a t S t r i k e s i n t h e J u r i s d i c t i o n o f B r i t i s h Columbia C l a s s i f i e d by I n d u s t r y : 1 9 4 5 - 7 5 . . 110 10 W i l d c a t S t r i k e s i n t h e F e d e r a l J u r i s d i c t i o n w i t h i n B r i t i s h Columbia C l a s s i f i e d by I n d u s t r y : 1 9 4 5 - 7 5 . . 113 11 The I n t e r v a l Between C o n t r a c t E x p i r i e s and S t r i k e Commencement Dates by C o n t r a c t S t a t u s i n B r i t i s h C o l u m b i a : 1945-75 131 12. The I n t e r v a l Between C o n t r a c t E x p i r i e s and S t r i k e Commencement Dates C l a s s i f i e d by C o n t r a c t S t a t u s and I n d u s t r i e s L i n B r i t i s h - C o l u m b i a : 1945-75 . . . . 133 13 The I n t e r v a l Between C o n t r a c t E x p i r i e s and S t r i k e Commencement Dates C l a s s i f i e d by C o n t r a c t S t a t u s i n t h e J u r i s d i c t i o n o f B r i t i s h Columbia by Y e a r s : 1945-75 134 ( i x ) Number T i t l e Page 14 F - T e s t t h a t E s t i m a t e s U s i n g t h e same R e g r e s s i o n E q u a t i o n but D i f f e r e n t Time P e r i o d s a r e S t a t i s t i c a l l y D i f f e r e n t 140 15 Dummy V a r i a b l e Schema f o r S t r u c t u r a l S h i f t s ; A l l , N e a r l y A l l , Important and Fewest Important Changes i n L e g i s l a t i o n : 1950-75 Annual 152 16 Dummy V a r i a b l e Schema f o r L e a r n i n g New Rules i n One Y e a r ; Important and Fewest Important Changes i n L e g i s l a t i o n : 1950-75 Annual 153 17 Dummy V a r i a b l e Schema f o r L e a r n i n g New Rules i n Two Y e a r s ; Fewest Important Changes i n L e g i s l a t i o n : 1950-75 Annual 154 18 F - T e s t t h a t V a r i o u s Dummy V a r i a b l e C o n f i g u r a t i o n s a r e S t a t i s t i c a l l y D i f f e r e n t from Zero f o r F i r s t Agreement S t r i k e s : 1950-75 Annual \ 156 19 f - T e s t t h a t V a r i o u s Dummy V a r i a b l e C o n f i g u r a t i o n s a r e S t a t i s t i c a l l y D i f f e r e n t from Zero f o r C o n t r a c t Renewal S t r i k e s : 1950-75 Annual 157 20 F - T e s t t h a t V a r i o u s Dummy V a r i a b l e C o n f i g u r a t i o n s a r e S t a t i s t i c a l l y D i f f e r e n t from Zero f o r S t r i k e s d u r i n g t h e Term 1950-75 Annual 158 21 The P e r c e n t a g e D i f f e r e n c e Between F - S t a t i s t i e s and C o r r e s p o n d i n g V a l u e s o f t h e F - D i s t r i b u t i o n f o r V a r i o u s Dummy V a r i a b l e C o n f i g u r a t i o n s and R e g r e s s a n t s 159 22 S e l e c t e d R e g r e s s i o n R e s u l t s I n v o l v i n g Fewest Important Dummies: 1950-75 o r 1953-75 A n n u a l . . . . 164 23 S e l e c t e d R e g r e s s i o n R e s u l t s I n v o l v i n g t h e Dummy V a r i a b l e s f o r L e a r n i n g New Rules i n One Y e a r : 1950-75 Annual o r 1953-75 Annual 165 24 S e l e c t e d R e g r e s s i o n R e s u l t s I n v o l v i n g Dummy V a r i a b l e s f o r L e a r n i n g New R u l e s i n Two Y e a r s : 1950-75 o r 1953-75 Annual 166 25 The Annual Number o f E x p i r i e s and C o n t r a c t s i n F o r c e f o r t h e Random Sample and f o r t h e Combined Sample: 1945-75 259 26 P r e d i c t i o n o f Annual B r i t i s h Columbia C o r p o r a t e P r o f i t s U s i n g Both Gross and I n d i v i d u a l Annual P e r s o n a l Income f o r B r i t i s h C o l u m b i a : 1960-75 . . . 264 (x) Number T i t l e Page 27 The B e s t P r e d i c t i o n o f Annual B r i t i s h Columbia C o r p o r a t e P r o f i t s f o r Each Q u a r t e r , w h i c h Uses Gross Annual P e r s o n a l Income f o r B r i t i s h C o l u m b i a : 1960-75 265 28 I n d u s t r i e s Covered by t h e E n t i r e Sample and by t h e Random Sample o f E x p i r i e s .272 29 The M o n t h l y P a t t e r n o f E x p i r i e s and o f S t r i k e s i n B r i t i s h Columbia . -. 280 30 Dummy V a r i a b l e Schema f o r S t r u c t u r a l S h i f t s ; A l l Changes i n L e g i s l a t i o n ; Both F i r s t C o n t r a c t S t r i k e s and C o n t r a c t Renewal S t r i k e s : 1950-75 Q u a r t e r l y 282 31 Dummy V a r i a b l e Schema f o r S t r u c t u r a l S h i f t s ; Important Changes and Fewest I m p o r t a n t Changes i n L e g i s l a t i o n : 1950-75 Q u a r t e r l y 283 32 Dummy V a r i a b l e Schema f o r L e a r n i n g New Rules i n One Y e a r : Fewest I m p o r t a n t Changes i n L e g i s l a t i o n : 1950-75 Q u a r t e r l y 284 33 Dummy V a r i a b l e Schema f o r L e a r n i n g New Rules i n Two Y e a r s ; Fewest Important Changes i n L e g i s l a t i o n : 1950-75 Q u a r t e r l y . 285 ( x i ) LIST OF FIGURES F i g u r e T i t l e Page F i g u r e 1 Contour Maps o f Union and F i r m N e t - G a i n F u n c t i o n s 28 F i g u r e 2 T h r e e - D i m e n s i o n a l View o f Union and F i r m N e t - G a i n F u n c t i o n s 29 F i g u r e 3 . The A c t u a l F e a s i b l e S e t 39 F i g u r e 4 A Comparison o f True M a r g i n a l p . d . f . s o f S t r i k e f o r t h e D i s c o n t i n u o u s and C o n t i n u o u s J o i n t p . d . f . s . 44 F i g u r e 5 True P r o b a b i l i t i e s o f S e t t l i n g i n t h e S e v e r a n c e Region o f t h e F e a s i b l e S e t 49 F i g u r e 6 Wage C r o s s - S e c t i o n s o f the Union and Firm J o i n t S u b j e c t i v e p . d . f . s 51 F i g u r e 7 S t r i k e C r o s s - S e c t i o n s o f t h e Union and Firm J o i n t S u b j e c t i v e p . d . f . s 54 F i g u r e 8 The Three D i m e n s i o n a l S p a c e , S x W x Z as i t A p p l i e s t o t h e Unionr-and Firm i n J o h n s t o n ' s Theory and i n the Theory o f T h i s D i s s e r t a t i o n . 218 F i g u r e 9 The E m p l o y e r ' s S u b j e c t i v e E s t i m a t e o f t h e S t r i k e P r o b a b i l i t y A s s o c i a t e d w i t h a Given Wage O f f e r and i t s R e l a t i o n s h i p w i t h t h e B i l a t e r a l Framework i n H e i s e r ' s Theory . . . . 221 ( x i i ) NOMENCLATURE OF REGRESSORS AND REGRESSANTS R e g r e s s a n t s PROF Annual B r i t i s h Columbia C o r p o r a t e P r o f i t s B e f o r e Taxes PROF-j Annual B . C . C o r p o r a t e P r o f i t s B e f o r e T a x e s , Q u a r t e r 1 PR0F 2 Annual B . C . C o r p o r a t e P r o f i t s B e f o r e T a x e s , Q u a r t e r 2 PR0F 3 Annual B . C . C o r p o r a t e P r o f i t s B e f o r e T a x e s , Q u a r t e r 3 PR0F 4 Annual B . C . C o r p o r a t e P r o f i t s B e f o r e T a x e s , Q u a r t e r 4 LN( ) N a t u r a l l o g a r i t h m o f t h e v a r i a b l e i n p a r e n t h e s i s R e g r e s s a n t s I I n t e r c e p t IPI B r i t i s h Columbia I n d i v i d u a l P e r s o n a l Income GPI B r i t i s h Columbia Gross P e r s o n a l Income LN( ) N a t u r a l l o g a r i t h m o f t h e v a r i a b l e i n p a r e n t h e s i s ( x i i i ) NOMENCLATURE OF REGRESSORS AND REGRESSANTS R e g r e s s a n t s NS-j Number o f f i r s t agreement s t r i k e s NS2 Number o f c o n t r a c t renewal s t r i k e s NS^ Number o f s t r i k e s d u r i n g t h e term C Number o f new c e r t i f i c a t i o n s X Number o f e x p i r i e s F Number o f c o n t r a c t s i n f o r c e NS-,/C R a t i o o f NS ] t o C NS2/X R a t i o o f NS 2 t o X NS 3 /F R a t i o o f NS3 t o F R e g r e s s o r s A Average age o f t h e employed n o n - a g r i c u l t u r a l work f o r c e P B r i t i s h Columbia B e f o r e - T a x P r o f i t s U Unemployment Rate A C P I / C P I Change i n t h e consumer p r i c e i n d e x * IAWJ.7AWJ._I-1J "Rate o f Change" o f a v e r a g e w e e k l y wages and s a l a r i e s * Same q u a r t e r f o r q u a r t e r l y d a t a ( x i v ) ACKNOWLEDGEMENTS I w i s h t o acknowledge t h o s e p e o p l e , w i t h o u t whose a s s i s -t a n c e and s u p p o r t , I would not have completed my t h e s i s . My t h e s i s s u p e r v i s o r , S t u a r t J a m i e s o n , w i t h o u t whose t u t e l a g e I would not have been a b l e t o u n d e r t a k e t h i s s t u d y , p r o v i d e d u s e f u l i n s i g h t s and g r e a t l y a s s i s t e d me i n u n d e r s t a n d i n g l a b o u r r e l a t i o n s i n B r i t i s h C o l u m b i a . I w i s h t o acknowledge t h e o t h e r members o f my P h . D . c o m m i t t e e : John C r a g g , who made i n c i s i v e s u g g e s t i o n s , who was v e r y s u p p o r t i v e and who a s s i s t e d me t o t h e e n d , and R u s s e l l U h l e r , who p r o v i d e d u s e f u l comments. C u r t Eaton i n s p i r e d me to u n d e r t a k e t h i s s t u d y and p r o v i d e d t h o u g h t f u l encouragement. Marty Puterman s u p p l i e d i n v a l u a b l e a s s i s t a n c e i n h e l p i n g me w i t h t h e e x p o s i t i o n o f my t h e o r y , i n showing me how t o e d i t f i l e s on t h e computer and g e n e r a l l y i n s u p p o r t i n g me i n my endeavour. M r s . Maryse E l l i s , who t y p e d much o f my d i s s e r t a t i o n , d e s e r v e s an e x t r a s p e c i a l thank you not o n l y f o r t h e o u t s t a n d i n g j o b o f t y p i n g she d i d but a l s o f o r her v e r y k i n d f r i e n d s h i p and s u p p o r t . I d e e p l y a p p r e c i a t e t h e work o f t h e o t h e r t y p i s t s who a s s i s t e d me: Audrey M i l l i g a n , L a u r e l M c L a c h l i n and E l l e n Moore. Many p e o p l e d e s e r v e acknowledgement f o r t h e b e h i n d - t h e -scenes s u p p o r t t h e y p r o v i d e d . They i n c l u d e my w i f e ' s p a r e n t s , t h e T . K . Nakagawas;, Bobby Nakagawa and Cathy E l l i o t t . L a r r y B l a i n and L i n d a N u t t e r d e s e r v e an e x t r a s p e c i a l t h a n k - y o u , f o r I doubt t h a t I would have f i n i s h e d , had t h e y not t w i c e extended t h e i r warm h o s p i t a l i t y t o me w h i l e I g a t h e r e d d a t a i n Ottawa. I w i s h t o acknowledge t h e U n i v e r s i t y o f B r i t i s h Columbia and t h e U n i v e r s i t y o f A l b e r t a , both o f whose r e s o u r c e s , f a c u l t y and s t a f f made immense c o n t r i b u t i o n s t o my t h e s i s . In a d d i t i o n , I w i s h t o e x p r e s s (xv) my s i n c e r e s t a p p r e c i a t i o n t o t h e Canada C o u n c i l and t o Labour Canada, who p r o v i d e d p a r t i a l f u n d i n g f o r my r e s e a r c h p r o j e c t as w e l l as c o n s i d e r a b l e a s s i s t a n c e . VEV1CATEV TO: My U0tk2.fi {the. "Wyoming cowgVil") My Dad and EHe.nQ2.ne. Judy, and Suzanne. INTRODUCTION Changes i n governments, mounting p u b l i c c r i t i c i s m about s t r i k e w a v e s , poor d r a f t i n g o f l a b o u r s t a t u t e s , and reforms proposed by e x p e r t s i n l a b o u r r e l a t i o n s o f t e n have l e d t o r e v i s e d , revamped o r newly d r a f t e d g e n e r a l l a b o u r r e l a t i o n s laws i n Canada. Some o f t h e s e changes were i n t e n d e d to m i n i m i z e the p r o b a b i l i t y t h a t i n d u s t r i a l u n r e s t o r i n t e r e s t d i s p u t e s w i l l , d e v e l o p i n t o s t r i k e s and l o c k o u t s , and c e r t a i n changes i n l e g i s l a t i o n presumably e x e r t e d u n a n t i c i p a t e d e f f e c t s on the i n c i d e n c e o f work stoppages i n Canada. U n f o r t u n a t e l y , r e l a t i v e l y l i t t l e i s known about the r e l a t i o n s h i p s between changes i n l a b o u r l e g i s l a t i o n and s t r i k e s and l o c k o u t s i n Canada. A few l a b o u r e c o n o m i s t s , most n o t a b l y Vanderkamp ( 1 9 7 0 ) , Smith (1972) and Walsh ( 1 9 7 5 ) , have i n v e s t i g a t e d e m p i r i c a l l y s t r i k e a c t i v i t y i n Canada. But the scope o f t h e i r s t u d i e s was n a t i o n a l and t h i s p r e c l u d e d them from d i r e c t l y a c c o u n t i n g f o r changes i n l a b o u r l e g i s l a t i o n , f o r the Canadian l e g a l framework o f l a b o u r r e l a t i o n s g e n e r a l l y has been " b a l k a n i z e d " - - p a r t i c u l a r l y s i n c e World War II ended. P r o v i n c i a l l e g i s l a t i o n , f o r e x a m p l e , has r e g u l a t e d o v e r n i n e t y p e r c e n t o f the i n d u s t r i a l d i s p u t e s t h a t o c c u r r e d i n Canada d u r i n g the y e a r s s i n c e a t l e a s t 1950, w h i l e 2 f e d e r a l l e g i s l a t i o n has c o v e r e d the r e m a i n d e r . General l a b o u r r e l a t i o n s laws have d i f f e r e d markedly from one j u r i s d i c t i o n to a n o t h e r J The r e l a t i o n s h i p between changes i n l a b o u r l e g i s l a t i o n and work stoppages i n Canada, t h e r e f o r e , s h o u l d be e x p l o r e d on a j u r i s d i c t i o n a l b a s i s , r a t h e r than on a n a t i o n a l b a s i s . T h i s d i s s e r t a t i o n i s c o n c e i v e d o f as a p i l o t s t u d y o f the r e l a t i o n s h i p between changes i n l a b o u r l e g i s l a t i o n and the i n c i d e n c e o f s t r i k e s and l o c k o u t s i n Canada d u r i n g t h e t h r e e decades s i n c e the end o f World War I I . The 1945-75 p e r i o d i s o f i n t e r e s t , because the Wartime Labour R e l a t i o n s R e g u l a t i o n s o r P . C . 1003, the Canadian e q u i v a l e n t to the Wagner A c t o f the U n i t e d S t a t e s , was e n a c t e d i n 1944 and has s e t the b a s i c p a t t e r n and tone f o r Canadian g e n e r a l l a b o u r r e l a t i o n s laws and amendments o f t h o s e laws s i n c e 1944. T h i s s t u d y w i l l f o c u s e x c l u s i v e l y on one j u r i s d i c t i o n , B r i t i s h C o l u m b i a , d u r i n g the 1945-75 p e r i o d a n d , as s u c h , i t s t a n d s on i t s own. I t i s a p i l o t s t u d y i n the sense t h a t i t s h o u l d g e n e r a t e t h e o r e t i c a l i n s i g h t s , r e s e a r c h methods and t e n t a t i v e c o n c l u s i o n s o r hypotheses which can be a p p l i e d and t e s t e d i n o t h e r j u r i s d i c t i o n s a c r o s s Canada. B r i t i s h Columbia was s e l e c t e d , i n p a r t , because i t i s one o f t h r e e l a b o u r r e l a t i o n s j u r i s d i c t i o n s i n Canada w h i c h t y p i c a l l y See Jamieson ( 1 9 7 3 ) , p a r t i c u l a r l y C h a p t e r 5 , and Woods ( 1 9 7 3 ) , e s p e c i a l l y Chapters I , I I , I I I , and V. 3 have a l s o been t r e a t e d as r e g i o n a l e c o n o m i e s . S i n c e r e g i o n a l economies e x i s t i n Canada and l a b o u r s t a t u e s vary from j u r i s d i c t i o n to j u r i s d i c t i o n , r e l a t i v e l y l i t t l e n a t i o n - w i d e c o l l e c t i v e b a r g a i n i n g t r a n s p i r e s o u t s i d e the f e d e r a l j u r i s d i c t i o n . The r e g i o n a l economy where n e g o t i a t i o n s t a k e p l a c e g e n e r a l l y c o n s t i t u t e s the frame o f r e f e r e n c e f o r n e g o t i a t i n g the v a r i o u s terms o f c o l l e c t i v e agreements 3 o r r e s o l v i n g them through t h i r d p a r t y i n t e r v e n t i o n . For t h e s e reasons I i n t e n d t o - u s e r e g i o n a l economic d e t e r m i n a n t s to 4 s t u d y s t r i k e s and l o c k o u t s i n B r i t i s h C o l u m b i a . B r i t i s h Columbia has r i c h l a b o u r h i s t o r y and e x p e r -i e n c e d c e r t a i n novel l e g i s l a t i v e e x p e r i m e n t s from 1945 t h r o u g h 1 9 7 5 . 5 E s p e c i a l l y noteworthy were t h e T r a d e - u n i o n s A c t o f 1959, the M e d i a t i o n Commission A c t o f 1968 and the Labour Code o f B r i t i s h C o l u m b i a , which was e n a c t e d i n 1973. The T r a d e - u n i o n s A c t was d e s i g n e d to reduce the i n c i d e n c e o f w i l d c a t s t r i k e s by c o n f r o n t i n g t r a d e - u n i o n s w i t h l i a b i l i t y f o r damages e n s u i n g from w i l d c a t s t r i k e s . The M e d i a t i o n Commission A c t e s t a b l i s h e d a permanent t r i b u n a l r e s p o n s i b l e f o r a p p o i n t i n g m e d i a t i o n o f f i c e r s and c a p a b l e o f f u n c t i o n i n g l i k e a c o n c i l i a t i o n board f o l l o w i n g m e d i a t i o n . T h i s See B r e w i s ( 1 9 6 5 ) , e s p e c i a l l y C h a p t e r 1 3 , O s t r y and Z a i d i ( 1 9 7 2 ) , P e i t c h i n i s ( 1 9 7 5 ) , and B l a i n (1977) . 3 S e e Downie (1971) and H.D. Woods, oJt at. ( 1 9 6 8 ) , p p . 6 0 - 6 4 . ^The c r i t i c i s m t h a t n a t i o n a l s t u d i e s were n o t d i s a g g r e g a t e d to s t u d y p a t t e r n s o f work stoppages i n r e l a t i o n s h i p to r e g i o n a l economic d e t e r m i n a n t s o f s t r i k e and l o c k o u t a c t i v i t y a p p l i e s t o A s h e n f e l t e r and J o h n s o n ' s (1969) s t u d y i n the U n i t e d S t a t e s , as w e l l as to those i n Canada by Vanderkamp ( 1 9 7 0 ) , Smith (1972) and Walsh ( 1 9 7 5 ) . 4 A c t was h i g h l y c o n t r o v e r s i a l s i n c e i t p e r m i t t e d the c a b i n e t t o compel the p a r t i e s o f an i n d u s t r i a l d i s p u t e to submit t o b i n d i n g a r b i t r a t i o n by the M e d i a t i o n C o m m i s s i o n , p r o v i d e d the c a b i n e t deemed t h a t the d i s p u t e t h r e a t e n e d the p u b l i c i n t e r e s t o r w e l f a r e . Such a r b i t r a r i o n was c o m p u l s o r y , r e g a r d l e s s o f whether t h e p a r t i c u l a r d i s p u t e took p l a c e i n the p r i v a t e s e c t o r o r the p u b l i c s e c t o r . The Labour Code, by c o n t r a s t , implemented a number o f p r o p o s a l s t h a t the Prime M i n i s t e r ' s Task Force on Labour R e l a t i o n s had s u g g e s t e d i n 1968. A l t h o u g h i t resembled the O n t a r i o Labour R e l a t i o n s A c t o f 1970, the Code c o n t a i n e d i t s own d i s t i n c t i v e f e a t u r e s . For i n s t a n c e , the Labour Code, as i t was i n i t i a l l y d r a f t e d and p a s s e d , c o n f e r e d the de cure r i g h t to s t r i k e on employees i n what i t termed the e s s e n t i a l s e r v i c e s : p o l i c e , f i r e m e n and h o s p i t a l w o r k e r s . The 1945-75 p e r i o d i n B r i t i s h Columbia p r o g r e s s e s from the F e d e r a l government's r e g u l a t i n g l a b o u r r e l a t i o n s i n B . C . (1945-47) t o the Labour Code's r e g u l a t i n g l a b o u r r e l a t i o n s i n B . C . ( 1 9 7 3 - 7 5 ) . T h i s p e r i o d embraces p r o v i n c i a l l a b o u r l e g i s l a t i o n which was d r a f t e d and e n a c t e d by t h r e e d i f f e r e n t governments: the C o a l i t i o n Government ( L i b e r a l - C o n s e r v a t i v e : 1 9 4 7 - 5 0 ) , the S o c i a l C r e d i t Government ( 1 9 5 0 -72) and the New D e m o c r a t i c Government ( 1 9 7 2 - 7 5 ) . ^ S e e , H e r b e r t (1968), ' C a r t e r (197,6). f o r i n s t a n c e , Tsong ( 1 9 7 1 ) , P h i l l i p s ( 1 9 6 7 ) , Jamieson ( 1 9 7 1 ) , A r t h u r s ( 1 9 7 5 ) , M a t k i n ( 1 9 7 5 ) , and 5 T h i s s t u d y w i l l l o o k a t two k i n d s o f s t r i k e s . For o n e , i t w i l l examine " w i l d c a t s t r i k e s " o r s t r i k e s which t y p i c a l l y a r i s e from r i g h t s d i s p u t e s , w h i c h o c c u r d u r i n g the terms o f c o l l e c t i v e a g r e e -ments and w h i c h , t h e r e f o r e , g e n e r a l l y a r e c o n d u c t e d i l l e g a l l y . For a n o t h e r , i t w i l l examine s t r i k e s and l o c k o u t s which are a s s o c i a t e d w i t h c o n t r a c t n e g o t i a t i o n s ; they c o n s t i t u t e i n t e r e s t d i s p u t e s and g e n e r a l l y a r e conducted l e g a l l y . ' ' I c o n c u r w i t h o t h e r r e s e a r c h e r s - -p a r t i c u l a r l y Rees (1952) and Eaton ( 1 9 7 3 ) - - a n d c o n s i d e r t h a t t h e s e two types o f work stoppages d i f f e r i n k i n d a n d , a c c o r d i n g l y , i n the economic d e t e r m i n a n t s t h a t e x p l a i n them. Hence, a t h e o r e t i c a l model w i l l be d e v e l o p e d f o r each o f t h e s e two k i n d s o f work stoppages and a p p l i e d e m p i r i c a l l y . Each model s u g g e s t s a s e t o f economic d e t e r m i n a n t s o f s t r i k e a c t i v i t y . We s h a l l a t t em pt (1) t o " n o r m a l i z e " s t r i k e measures by r e g r e s s i n g them a g a i n s t economic d e t e r m i n a n t s a n d , t h e r e f o r e , (2) to i s o l a t e the e f f e c t s o f changes i n l a b o u r l e g i s l a t i o n i o n the i n c i d e n c e o f s t r i k e s and l o c k o u t s i n B r i t i s h Columbia from 1945 through 1875.' Dummy v a r i a b l e s w i l l , be used to r e p r e s e n t changes i n l a b o u r l e g i s l a t i o n i n the r e g r e s s i o n a n a l y s i s o f t h i s s t u d y . UA11 Canadian j u r i s d i c t i o n s , e x c e p t f o r S a s k a t c h e w a n , p r o s c r i b e s t r i k e s o r l o c k o u t s d u r i n g t h e terms o f c o l l e c t i v e agreements. ^ R i g h t s d i s p u t e s c e n t r e on the terms o f c o l l e c t i v e a g r e e -m e n t s , s i n c e l a b o u r and management have l e g a l l y r e s o l v e d t h e i r i n t e r e s t s by r a t i f y i n g a c o n t r a c t . I n t e r e s t d i s p u t e s o c c u r when t h e i n t e r e s t s o f l a b o u r and management a r e t o be r e s o l v e d . T h i s c l e a r l y o c c u r s d u r i n g c o n t r a c t n e g o t i a t i o n s b u t may o c c u r d u r i n g t h e term o f a c o n t r a c t when a m a t t e r i s a t i s s u e which the c o l l e c t i v e agreement does n o t c o v e r . F a m i l i a r examples o f t h e l a t t e r i n c l u d e d i s p u t e s o v e r t e c h n o l o g i c a l change o r c o n t r a c t i n g o u t . 6 T h i s s t u d y w i l l be o r g a n i z e d as f o l l o w s . C h a p t e r 1 c o n s i s t s o f a r e v i e w o f the e m p i r i c a l l i t e r a t u r e c o n c e r n i n g s t r i k e a c t i v i t y and l a b o u r l e g i s l a t i o n . C h a p t e r 1 c o n t a i n s an e x p l a n a t i o n o f the c o n t r i b u t i o n s t h a t t h i s s t u d y w i l l make t o both o f t h o s e b o d i e s o f l i t e r a t u r e . C h a p t e r 2 c o n s i s t s o f a p r e s e n t a t i o n o f the b a r g a i n i n g t h e o r y t h a t w i l l be used to g e n e r a t e t h e economic d e t e r m i n a n t s t h a t w i l l be used i n r e g r e s s i o n a n a l y s i s o f s t r i k e s t h a t i s s u e from i n t e r e s t d i s p u t e s . The b a r g a i n i n g t h e o r y i s a s t r i k e - a s - a n - i n v e s t m e n t t h e o r y o f b a r g a i n i n g under u n c e r t a i n t y . The f o c u s o f C h a p t e r 3 i s on p u b l i c p o l i c y and t h e r e s o l u -t i o n o f i n d u s t r i a l d i s p u t e s through s t r i k e a c t i o n i n B r i t i s h Columbia from 1945 through 1975.. I t f o c u s s e s on (1) the d i f f e r e n c e s among s t r i k e s c l a s s i f i e d by c o n t r a c t s t a t u s , (2) the l e g a l i t y o f s t r i k e a c t i v i t y , (3) the e x t e n t to which governments o f B r i t i s h . Columbia i n t e r v e n e d to end s t r i k e s , and (4) the n a t u r e o f w i l d c a t s t r i k e s and p o s s i b l e e x p l a n a t i o n s o f w i l d c a t s t r i k e s . C h a p t e r 3 i n c l u d e s a p r e s e n t a t i o n o f the t h e o r y o f s t r i k e s d u r i n g the term t h a t w i l l be used i n our e m p i r i c a l s t u d y o f s t r i k e s d u r i n g the term i n B r i t i s h C o l u m b i a . The e m p i r i c a l r e s u l t s o f t h e c u r r e n t s t u d y a r e p r e s e n t e d i n C h a p t e r 4 . In o t h e r w o r d s , C h a p t e r 4 f o c u s s e s on the e f f e c t s o f changes i n l a b o u r l e g i s l a t i o n on s t r i k e a c t i v i t y i n B r i t i s h Columbia from 1945 through 1975. i 7 CHAPTER 1 A REVIEW OF.THE EMPIRICAL LITERATURE CONCERNING STRIKE ACTIVITY AND LABOUR LEGISLATION T h i s c h a p t e r r e v i e w s the e m p i r i c a l l i t e r a t u r e t h a t p e r t a i n s t o t h i s s t u d y . Our e m p i r i c a l work w i l l draw upon and t i e t o g e t h e r elements from a t l e a s t f i v e s t r a n d s o f the l i t e r a t u r e t h a t d e a l s w i t h s t r i k e s a n d / o r l a b o u r l e g i s l a t i o n . The f i v e s t r a n d s f o c u s on the f o l l o w i n g t o p i c s : ( i ) the use o f economic d e t e r m i n a n t s i n r e g r e s s i o n a n a l y s i s t o a n a l y z e the impact o f changes i n l a b o u r l e g i s l a t i o n on t h e i n c i d e n c e o f s t r i k e a c t i v i t y ; ( i i ) r e g i o n a l p a t t e r n s and r e g i o n a l d e t e r m i n a n t s o f s t r i k e a c t i v i t y i n Canada; ( i i i ) measures o f the i n c i d e n c e o f s t r i k e s w i t h a p a r t i c u l a r f o c u s on the r e l a t i o n s h i p , between the " s t r i k e c y c l e " and the " c o n t r a c t e x p i r y c i r c l e " ; ( i v ) p a t t e r n s o f s t r i k e a c t i v i t y where s t r i k e s have been d i s a g g r e g a t e d a c c o r d i n g to c o n t r a c t s t a t u s ; ^ and ' C o n t r a c t s t a t u s r e f e r s t o s t r i k e s t h a t o c c u r d u r i n g the n e g o t i a t i o n o f a f i r s t agreement, , d u r i n g the r e n e g o t i a t i o n o r renewal o f a p r e v i o u s l y e x i s t i n g agreement o r d u r i n g the term o f an agreement. The l a t t e r a l s o are termed " w i l d c a t " o r " i l l e g a l " s t r i k e s , b u t the t e r m , " i l l e g a l " s t r i k e , i s something o f a misnomer, s i n c e l a b o u r laws may be c o n t r a v e n e d d u r i n g s t r i k e s w h i c h i n v o l v e e i t h e r the n e g o t i a t i o n o f a f i r s t agreement o r the r e n e g o t i a t i o n o f a p r e v i o u s l y e x i s t i n g a g r e e m e n t . . 8 (v) the r e l a t i v e impact o f v o l u n t a r y v e r s u s compulsory modes o f d i s p u t e r e s o l u t i o n upon s t r i k e a c t i v i t y . We s h a l l deal w i t h t h e s e t o p i c s i n t h e i r o r d e r o f p r e s e n t a t i o n above. The r e v i e w o f the l i t e r a t u r e w i l l r e v e a l t h a t none o f the p r e v i o u s r e s e a r c h p r o j e c t s drew upon o r combined elements from the f i v e s t r a n d s o f l i t e r a t u r e to a n a l y z e the r e l a t i o n -s h i p between changes i n l a b o u r l e g i s l a t i o n and s t r i k e a c t i v i t y . 1.1 S t u d i e s U s i n g R e g r e s s i o n A n a l y s i s The one s t u d y t h a t e x p l i c i t l y used r e g r e s s i o n a n a l y s i s t o a s s e s s the impact o f a change i n l a b o u r l e g i s l a t i o n upon the i n c i d e n c e o f s t r i k e a c t i v i t y was by A s h e n f e l t e r and Johnson (1969) [denoted A - J h e r e i n a f t e r ] . A - J a p p l i e d r e g r e s s i o n a n a l y s i s t o n a t i o n a l d a t a on s t r i k e s i n t h e U n i t e d S t a t e s d u r i n g the p e r i o d from 1952 through 1967. A - J used the customary s e t o f economic d e t e r m i n a n t s o f s t r i k e s : an i n d i c a t o r o f the p r o f i t a b i l i t y o f the f i r m ( p r o f i t s i n the case o f A - J ) , the unemployment r a t e , a p r i c e i n d e x , and a wage v a r i a b l e . The h y p o t h e s i s t h a t A-rJ t e s t e d , and f a i l e d t o r e j e c t , was t h a t t h e enactment o f the L a n d r u m - G r i f f i t h A c t , which promoted union democracy, had l e d to an i n c r e a s e i n the i n c i d e n c e o f s t r i k e a c t i v i t y , measured as t h e number o f s t r i k e s , s i n c e i t s enactment i n 1959. An i n t e r c e p t dummy v a r i a b l e 9 r e p r e s e n t e d the change i n l e g i s l a t i o n i n t h e r e g r e s s i o n a n a l y s i s . A - J d i d not c o n c e r n themselves w i t h t h e debate about v o l u n t a r y v e r s u s compulsory forms o f d i s p u t e r e s o l u t i o n because the n a t i o n a l l a b o u r p o l i c y o f the U n i t e d S t a t e s t r a d i t i o n a l l y has been r o o t e d o n , and promoted, v o l u n t a r i s m . The A - J s t u d y had a t l e a s t t h r e e s h o r t c o m i n g s . F i r s t , the s t r i k e data were not c l a s s i f i e d a c c o r d i n g to c o n t r a c t s t a t u s . Because s t r i k e s which are c l a s s i f i e d by c o n t r a c t s t a t u s o c c u r under d i f f e r e n t c i r c u m s t a n c e s , they are i n e f f e c t d i f f e r e n t k i n d s o f s t r i k e s and the economic d e t e r m i n a n t s o f t h e s e s t r i k e s d i f f e r . S e c o n d , A s h e n f e l t e r and Johnson d i d n o t c o l l e c t d a t a c o n c e r n i n g c o n t r a c t e x p i r a t i o n s o r e x p i r i e s . They s i m u l a t e d t h e e f f e c t o f e x p i r y d a t a through the use o f dummy v a r i a b l e s . T h i r d , because the A - J s t u d y was n a t i o n a l i n s c o p e , i t g l o s s e d o v e r the r e g i o n a l b a r g a i n i n g p a t t e r n s i n the U n i t e d S t a t e s a n d , t h e r e f o r e , o m i t t e d r e g i o n a l d e t e r m i n a n t s o f s t r i k e a c t i v i t y . U s i n g Canadian d a t a c o v e r i n g the p e r i o d o f time from 1901 through 1966, Vanderkamp (1970) c o n d u c t e d an e m p i r i c a l i n v e s t i g a t i o n o f s t r i k e a c t i v i t y on a n a t i o n a l b a s i s . A l t h o u g h Vanderkamp d i s -c u s s e d the i n f l u e n c e o f l a b o u r l e g i s l a t i o n on the i n c i d e n c e o f s t r i k e a c t i v i t y , he d i d not e x p l i c i t l y t e s t f o r the e f f e c t o f l a b o u r l e g i s l a t i o n . O t h e r r e c e n t s t u d i e s o f s t r i k e a c t i v i t y i n Canada, such as t h o s e by Smith (,1972), Walsh (1972) and S w i d i n s k i ( 1 9 7 6 ) , l i k e w i s e , were n a t i o n a l i n a p p l i c a t i o n and f a i l e d to t e s t t h e h y p o t h e s i s c o n c e r n i n g the l a b o u r l e g i s l a t i o n - s t r i k e r e l a t i o n s h i p . 10 1 .2 S t u d i e s o f R e g i o n a l P a t t e r n s and R e g i o n a l  D e t e r m i n a n t s o f S t r i k e A c t i v i t y P e r h a p s , the most cogent argument i n f a v o u r o f f o c u s s i n g on the r e g i o n a l p a t t e r n s and on t h e r e g i o n a l economic d e t e r m i n a n t s o f s t r i k e s was put f o r w a r d by J a m i e s o n , who a r g u e d , among o t h e r t h i n g s , t h a t " . . . t h e r e a r e such pronounced r e g i o n a l d i v i s i o n s and d i f f e r e n c e s 2 as t o m a k e . . . ' n a t i o n a l p a t t e r n s ' a l m o s t m e a n i n g l e s s . " S e v e r a l r e -s e a r c h e r s , i n c l u d i n g Jamieson ( 1 9 7 7 b ) , Eaton (1973) and Garner ( 1 9 7 7 ) , have c o n c l u d e d t h a t t h e p a t t e r n s o f s t r i k e a c t i v i t y have v a r i e d w i d e l y a c r o s s C a n a d a ' s r e g i o n s a n d / o r p r o v i n c e s , r e g a r d l e s s o f t h e measure o f s t r i k e a c t i v i t y ( d u r a t i o n , w o r k i n g days l o s t per employee o r man days l o s t ) . Two o f the r e a s o n s r e s e a r c h e r s c i t e v e r y o f t e n i n a r r i v -i n g a t t h i s c o n c l u s i o n a r e t h a t t h e i n d u s t r i a l mix v a r i e s from r e g i o n t o r e g i o n a n d , t o a l e s s e r e x t e n t , from p r o v i n c e t o p r o v i n c e , and t h a t the performances o f r e g i o n a l economies v a r y m a r k e d l y a c r o s s Canada. 1 . 3 S t u d i e s U s i n g Measures o f t h e I n c i d e n c e o f  S t r i k e s and t h e S t r i k e - E x p i r y V a r i o u s r e s e a r c h e r s , i n c l u d i n g S k e e l s ( 1 9 7 1 ) , Eaton ( 1 9 7 3 ) , Walsh ( 1 9 7 5 ) , and K e l l y ( 1 9 7 6 ) , have examined and weighed t h e u s e -See Jamieson ( 1 9 6 8 , 4 2 ) . See a l s o Jamieson ( 1 9 6 2 , 405) where he compares t h e 1949-59 s t r i k e e x p e r i e n c e i n B r i t i s h Columbia w i t h the c o r r e s p o n d i n g e x p e r i e n c e i n the r e s t o f Canada. 11 f u l n e s s o f a c t i v i t y m e a s u r e s , as opposed t o i n c i d e n c e measures o f s t r i k e s . The f o r m e r are a b s o l u t e measures d u r i n g a g i v e n time p e r i o d : number o f s t r i k e s , number o f w o r k e r s i n v o l v e d i n s t r i k e s and man-days l o s t d u r i n g s t r i k e s . The l a t t e r a l s o are measured o v e r a s t i p u l a t e d p e r i o d o f t i m e , but they are p r o p o r t i o n a t e m e a s u r e s : (1) number o f s t r i k e s r e l a t i v e to the number o f e x p i r i e s ; (2) the number o f w o r k e r s i n v o l v e d i n s t r i k e s r e l a t i v e to the number o f w o r k e r s whose c o l l e c t i v e agreements e x p i r e d ; and (3) the man-days l o s t due to s t r i k e a c t i v i t y r e l a t i v e t o the e s t i m a t e d w o r k i n g time i f no s t r i k e s took p l a c e d u r i n g the s t i p u l a t e d p e r i o d o f t i m e . K e l l y c a l l s (1) " i n c i d e n c e , " (2) " w e i g h t e d i n c i d e n c e " and (3) " c o m p o s i t e i n c i d e n c e , " s i n c e (3) i n v o l v e d i n c i d e n c e , w e i g h t e d i n c i d e n c e and average d u r a t i o n . The g e n e r a l consensus i s t h a t i n c i d e n c e measures are b e t t e r - s u i t e d t o e m p i r i c a l a n a l y s i s than a c t i v i t y m e a s u r e s , s i n c e i n c i d e n c e measures a r e viewed as e m p i r i c a l e s t i m a t e s o f the p r o b a b i l i t y t h a t a c e r t a i n number o f s t r i k e s w i l l i s s u e from a g i v e n number o f e x p i r i e s . M o r e o v e r , i n the l e v e l o f b a r g a i n i n g a c t i v i t y , they p r o v i d e t r u e r i n d i c a t i o n s o f the p r o p e n -s i t y t o s t r i k e than do a c t i v i t y measures. K e l l y i s t h e o n l y member o f the r e s e a r c h e r s l i s t e d above who has a c t u a l l y g a t h e r e d c o n t r a c t e x p i r y d a t a and a n a l y z e d the r e l a t i o n s h i p between c o n t r a c t . e x p i r a t i o n s and s t r i k e a c t i v i t y . K e l l y ' s s t u d y c o v e r e d s t r i k e s and e x p i r i e s i n O n t a r i o from 1968 through 1975. H i s a n a l y s i s was c o n f i n e d (a) to d e t e r m i n i n g the e l a s t i c i t y o f s t r i k e s w i t h r e s p e c t to e x p i r i e s f o r s e a s o n a l l y a d j u s t e d s t r i k e and e x p i r y s e r i e s , (b) to e x a m i n i n g i n t e r - i n d u s t r y d i f f e r e n c e s i n the measures o f s t r i k e a c t i v i t y and i n c i d e n c e and ( c ) t o a s s e s s i n g the r e l a t i v e u s e f u l n e s s o f a c t i v i t y v e r s u s i n c i d e n c e measures. S i g n i f i c a n t l y , K e l l y d i d not r e g r e s s i n c i d e n c e measures a g a i n s t economic d e t e r m i n a n t s o f s t r i k e s . To the b e s t o f my knowledge, the p r e s e n t s t u d y i s the f i r s t s t u d y where the r e g r e s s a n t s i n c l u d e the i n c i d e n c e (1) measure—the r a t i o o f c o n t r a c t renewal s t r i k e s to "open agreements"—and where the r e g r e s s o r s i n c l u d e economic d e t e r m i n a n t s l i k e the economic d e t e r m i n a n t s i n the A - J s t u d y . 3 One o f s e v e r a l i m p o r t a n t c o n t r i b u t i o n s t h a t K e l l y made to the l i t e r a t u r e on the s t r i k e - e x p i r y r e l a t i o n s h i p was t h a t he proposed c o n s t r u c t i n g an i n c i d e n c e measure f o r s t r i k e s d u r i n g the term o f c o l l e c t i v e agreements. K e l l y ' s p r o p o s e d i n c i d e n c e measure was the r a t i o o f u n a u t h o r i z e d s t r i k e s to c o n t r a c t s i n f o r c e . That measure w i l l be used i n t h i s s t u d y . M o r e o v e r , we s h a l l p r o p o s e , and use an analogous i n c i d e n c e measure f o r f i r s t agreement s t r i k e s : the r a t i o o f f i r s t agreement s t r i k e s to new c e r t i f i c a t e s . For our p u r p o s e s , a c o l l e c t i v e agreement w i l l be deemed " o p e n , " i f the s p e c i f i e d e x p i r a t i o n date has been s u r p a s s e d . O t h e r -w i s e , i t w i l l be c o n s i d e r e d " c l o s e d . " T h u s , even i f a c o n t i n u a t i o n c l a u s e has taken e f f e c t , the c o n t r a c t w i l l be termed " o p e n . " R e l a t i v e l y few c o n t r a c t s c o n t a i n , c o n t i n u a t i o n c l a u s e s , so t h a t o n l y r a r e l y are s t r i k e s which o c c u r a f t e r c o n t r a c t s have come o p e n , s t r i c t l y s p e a k i n g , s t r i k e s d u r i n g the t e r m . 13 C l a c k (1975) s t u d i e d " w i l d c a t " s t r i k e a c t i v i t y i n Canada's e l e v e n j u r i s d i c t i o n s and the U n i t e d S t a t e s d u r i n g 1946-72. He found s i m i l a r w i l d c a t s t r i k e e x p e r i e n c e s i n both c o u n t r i e s . . I n d e e d , w i l d c a t s t r i k e s made up r o u g h l y t h i r t y p e r c e n t o f a l l s t r i k e s i n both c o u n t r i e s . B r i t i s h Columbia t r a d i t i o n a l l y had an i n c i d e n c e o f w i l d c u t s t r i k e s i n e x c e s s o f t h i r t y p e r c e n t , b u t i t i s n o t the most w i l d c a t - p r o n e p r o v i n c e . Nova S c o t i a i s . C l a c k a l s o i n v e s t i g a t e d the reasons employees s t a t e d f o r w i l d c a t t i n g and found t h a t wage i s s u e s f r e q u e n t l y were c i t e d . T h i s s t u d y w i l l f o c u s on 1945-75 w i l d c a t s t r i k e a c t i v i t y i n B r i t i s h Columbia and examine the reasons g i v e n f o r s t r i k e s d u r i n g the t e r m . 1 . 4 S t u d i e s Where S t r i k e Data Were D i s a g g r e g a t e d by C o n t r a c t S t a t u s At l e a s t t h r e e Canadian r e s e a r c h e r s p r e v i o u s l y d i s a g g r e g a t e d s t r i k e s t a t i s t i c s by c o n t r a c t s t a t u s . The C a r r o t h e r s - P a l m e r (1966) s t u d y o f the l a b o u r i n j u n c t i o n i n O n t a r i o c l a s s i f i e d O n t a r i o s t r i k e d a t a i n t o f o u r c a t e g o r i e s o f c o n t r a c t s t a t u s : (1) f i r s t agreement s t r i k e s , (2) c o n t r a c t renewal s t r i k e s , (3) s t r i k e s / % 4 d u r i n g the t e r m , and (4) o t h e r s t r i k e s . Mr. J u s t i c e C a r r o t h e r s and Palmer l a b e l l e d t h e i r c a t e g o r i e s as (1) d u r i n g n e g o t i a t i o n o f f i r s t agreement o r union r e c o g n i t i o n , (2) d u r i n g r e n e g o t i a t i o n o f agreement (3) d u r i n g term o f agreement, and (4) i n o t h e r c i r c u m s t a n c e s . The l a t t e r c a t e g o r y i n c l u d e d " i n s t a n c e s where t h e r e was no c o l l e c t i v e agreement p r i o r to the work stoppage and the c o n c l u s i o n o f a f o r m a l agreement was n o t a b a s i c i s s u e . " See C a r r o t h e r s and P a l m e r , 1966, T a b l e 4 0 , 234 n. 14 Rand's ( 1 9 6 8 ) i n q u i r y i n t o l a b o u r d i s p u t e s i n O n t a r i o , d i f f e r e n t i a t e d between s t r i k e s d u r i n g the term and s t r i k e s t h a t i s s u e from i n t e r e s t d i s p u t e s , but h i s main c o n c e r n was the l e g a l i t y o r i l l e g a l i t y o f s t r i k e s . Jamieson (1971) a l s o d i s t i n g u i s h e d between s t r i k e s d u r i n g the term and s t r i k e s t h a t i s s u e from i n t e r e s t d i s p u t e s , but he o n l y f o c u s s e d on s t r i k e a c t i v i t y w i t h i n t h e f o r e s t p r o d u c t s i n d u s t r i e s o f B r i t i s h Columbia from 1949 through 1969.. S i g n i f i c a n t l y , none o f the t h r e e r e s e a r c h e r s used h i s d i s a g g r e g a t e d s t r i k e d a t a i n r e g r e s s i o n a n a l y s i s . T h u s , o u r s t u d y seems t o be a t l e a s t the f i r s t Canadian s t u d y ( i f n o t the f i r s t North American s t u d y ) to use s t r i k e d a t a c l a s s i f i e d by c o n t r a c t s t a t u s i n r e g r e s s i o n a n a l y s i s . 1 . 5 S t u d i e s o f the R e l a t i v e Impact o f V o l u n t a r y Versus Compulsory  Modes o f D i s p u t e R e s o l u t i o n I t seems t h a t the key f i e l d s t u d i e s o f c o m p u l s i o n v e r s u s v o l u n t a r i s m have c o n c e r n e d the s o - c a l l e d e s s e n t i a l s e r v i c e s . P r o b a b l y , the most i m p o r t a n t s t u d i e s were t h e s t u d y by A r t h u r s (1968) i n Canada and C u l l e n ' s (1968) s t u d y o f n a t i o n a l emergency s t r i k e s i n the U n i t e d S t a t e s . A r t h u r s argues i n f a v o u r o f the See Rand, 1968, Appendix D, 157-261. Rand's s t r i k e d a t a c o v e r s the 1958-67 time p e r i o d i n O n t a r i o . See J a m i e s o n , 1971, T a b l e I , 151. 15 American " a r s e n a l o f weapons" c o n c e p t where such weapons as ad hoc l e g i s l a t i o n a r e t o be used as u l t i m a t e t h r e a t s to i n d u c e l a b o u r and management t o a g r e e . C u l l e n found t h a t a v e r y s m a l l p r o p o r t i o n o f s o - c a l l e d n a t i o n a l emergency d i s p u t e s , m a i n l y i n the c o a l i n d u s t r y , i n d e e d c o n s t i t u t e d a n a t i o n a l economic emergency. Though e x t r e m e l y i n t e r e s t i n g , n e i t h e r s t u d y " n o r m a l i z e d " s t r i k e measures w i t h economic d e t e r m i n a n t s nor u s e d . r e g r e s s i o n a n a l y s i s . By c o n t r a s t , the c u r r e n t s t u d y w i l l a ttemp t to combine both t e c h n i q u e s . Cunningham (1970) i n v e s t i g a t e d the e f f i c a c y o f compulsory t w o - s t a g e c o n c i l i a t i o n p r o c e d u r e s when they were b e i n g d e - e m p h a s i z e d i n Nova S c o t i a , New B r u n s w i c k and O n t a r i o . ^ He found t h a t " t h e b e n e f i t s t o . c o l l e c t i v e b a r g a i n i n g have been d e s i r a b l e , and t h a t the i n c i d e n c e and/or magnitude o f s t r i k e s have n o t i n c r e a s e d (1970, 6 2 ) . " The i m p o r t a n c e o f Cunningham's s t u d y and f i n d i n g s a r e t h a t they came a t a time when the " g r e a t Canadian p r e o c c u p a t i o n " w i t h compulsory t h i r d - p a r t y i n t e r v e n t i o n was f a d i n g . Canadian governments had s t i p u l a t e d t h a t d i s p u t e r e s o l u t i o n p r o c e d u r e s be mandatory p r e c o n d i t i o n s to l a w f u l i n t e r e s t d i s p u t e s t r i k e s s i n c e as e a r l y as t h e t u r n o f t h e T w e n t i e t h C e n t u r y . I t was d u r i n g m i d - 1 9 5 0 s t h a t the Government o f B r i t i s h Columbia began to d e -In t w o - s t a g e c o n c i l i a t i o n , the f i r s t s t a g e i n v o l v e s a c o n c i l i a t i o n o f f i c e r who attempts to m e d i a t e a s e t t l e m e n t , w h i l e the s e c o n d - s t a g e i s . composed o f a t r i p a r t i t e c o n c i l i a t i o n b o a r d which w i l l propose a n o n - b i n d i n g s e t t l e m e n t f o l l o w i n g f a c t - f i n d i n g h e a r i n g s w i t h l a b o u r and management. I t i s t r i p a r t i t e because t h e r e i s one l a b o u r r e p r e s e n t a t i v e , one management r e p r e s e n t a t i v e and a chairman whom they s e l e c t o r who i s a p p o i n t e d s h o u l d they f a i l to a g r e e . 16 emphasize compulsory t w o - s t a g e c o n c i l i a t i o n p r o c e d u r e s , which had been mandatory i n B r i t i s h Columbia s i n c e the end o f W o r l d War I I . L i k e the s t u d i e s by A r t h u r s and C u l l e n , the s t u d y by Cunningham was l a r g e l y d e s c r i p t i v e - a n a l y t i c a l and i t d i d n o t use r e g r e s s i o n a n a l y s i s . 1 . 6 C o n c l u s i o n I t i s hoped t h a t t h i s d i s s e r t a t i o n w i l l make s e v e r a l c o n t r i b u t i o n s to the l i t e r a t u r e on s t r i k e a c t i v i t y and l a b o u r l e g i s l a t i o n . Key c o n t r i b u t i o n s s h o u l d i n c l u d e the c l a s s i f i c a t i o n o f s t r i k e data by s t a t u s ; the use o f e x p i r y data to form a measure o f the i n c i d e n c e o f s t r i k e a c t i v i t y i n B r i t i s h C o l u m b i a ; the use o f r e g i o n a l , r a t h e r than n a t i o n a l economic d e t e r m i n a n t s to s t u d y s t r i k e a c t i v i t y ; and the use o f dummy v a r i a b l e s i n a r e g r e s s i o n a n a l y s i s to s t u d y the impact o f changes i n l a b o u r l e g i s l a t i o n on the i n c i d e n c e o f s t r i k e a c t i v i t y i n B r i t i s h Columbia a n d , i n f a c t , i n Canada. Because the l e g i s l a t i v e changes t h a t w i l l be s t u d i e d i n c o r p o r a t e d the p o s t - W o r l d War I I s h i f t i n B r i t i s h Columbia and the r e s t o f Canada from compulsory to v o l u n t a r y forms o f t h i r d p a r t y i n t e r v e n t i o n i n t o i n t e r e s t d i s p u t e s , I s h o u l d be a b l e to a t l e a s t i n d i r e c t l y a s s e s s the p r a c t i c a l consequences o f the v o l u n t a r i s m v e r s u s c o m p u l s i o n . 17 Study o f t h e s e m a t t e r s r e q u i r e s a b a r g a i n i n g t h e o r y which y i e l d s the economic d e t e r m i n a n t s o f s t r i k e a c t i v i t y . Our s t r i k e - a s -a n - i n v e s t m e n t t h e o r y o f b a r g a i n i n g under u n c e r t a i n t y w i l l be p r e -s e n t e d i n the next c h a p t e r . 18 "CHAPTER 2 *A STRIKE AS AN INVESTMENT THEORY OF BARGAINING UNDER UNCERTAINTY The s t r i k e i s s a i d t o be the " g r e a t s o f t e n i n g d e v i c e " o f c o l l e c t i v e b a r g a i n i n g . I t imposes c o s t s on both l a b o u r and manage-ment, and t h e i m p o s i t i o n o f t h e s e c o s t s , or the t h r e a t t h e r e o f , s h o u l d cause l a b o u r and management t o make wage c o n c e s s i o n s J In o t h e r w o r d s , t h e s t r i k e presumably " s o f t e n s " the (wage o f f e r ) p o s i -t i o n s o f l a b o u r and management. The f i r m o r u n i o n i n a s t r i k e - a s - a n -i n v e s t m e n t t h e o r y o f b a r g a i n i n g t r e a t s the s t r i k e as a means f o r i n d u c i n g a wage s e t t l e m e n t , the b e n e f i t s o f w h i c h w i l l e q u a l , i f not e x c e e d , t h e c o s t s i t i n c u r s through s t r i k e a c t i o n . A n a l o g o u s l y , i t c o n s i d e r s t h e s t r i k e t h r e a t a means f o r g e n e r a t i n g wage c o n c e s s i o n s . S t r i k e - a s - a n - i n v e s t m e n t b a r g a i n i n g t h e o r i e s date a t l e a s t t o 1932 when H i c k s f o r m u l a t e d h i s s e m i n a l t h e o r y o f l a b o u r n e g o t i a -2 t i o n s . A p r o l i f e r a t i o n o f such t h e o r i e s o c c u r r e d d u r i n g the p a s t ^ S e e , f o r example, Dunlop ( 1 9 6 7 ) . The t e r m , " s t r i k e " i s used g e n e r i c a l l y here t o i n c l u d e both u n i o n - i n i t i a t e d work stoppages ( s t r i c t l y s p e a k i n g , s t r i k e s ) and e m p l o y e r - i n i t i a t e d work stoppages ( l o c k o u t s ) . 2 Some s t u d e n t s o f i n d u s t r i a l r e l a t i o n s argue t h a t what we have termed a " b a r g a i n i n g t h e o r y " i s i n f a c t o n l y a t h e o r y o f n e g o t i a -t i o n s . In t h e i r v i e w , a b a r g a i n i n g t h e o r y i s more embracing and i n -c l u d e s , f o r i n s t a n c e , c o n t r a c t a d m i n i s t r a t i o n and the h i s t o r y o f u n i o n i -z a t i o n . S e e , f o r e x a m p l e , Hameed (1969) and T r i p p ( 1 9 6 3 ) . 19 d e c a d e . P r o b a b l y the most r e a l i s t i c s t r i k e - a s - a n - i n v e s t m e n t models o f l a b o u r n e g o t i a t i o n s are t h o s e o f J o h n s t o n (1972a) and R a b i n o v i t c h and Swary ( 1 9 7 6 ) , s i n c e J o h n s t o n and R a b i n o v i t c h and Swary m o d e l l e d c o l l e c -t i v e b a r g a i n i n g under u n c e r t a i n t y and s i n c e t h e i r t h e o r i e s were two-s i d e d . " T w o - s i d e d n e s s " means t h a t both l a b o u r and management not o n l y c o n s i d e r but a l s o a c t u a l l y may i n v o k e t h e s t r i k e weapon and t h a t both l a b o u r and management pursue g a i n - m a x i m i z i n g s t r a t e g i e s a t t h e b a r g a i n -i n g t a b l e . There a r e t h r e e b a s i c and i n t e r r e l a t e d g o a l s which o u r t h e o r y s t r i v e s t o s a t i s f y . (1) I t t r i e s to p o r t r a y c o l l e c t i v e b a r g a i n i n g more r e a l i s t i c a l l y than e x i s t i n g t h e o r i e s , e s p e c i a l l y by p r e d i c t i n g t h a t s t r i k e s a c t u a l l y m i g h t o c c u r . (2) I t a t t e m p t s t o i n c o r p o r a t e the l e g i s l a t i v e framework t h a t governs c o l l e c t i v e b a r g a i n i n g . (3) I t i s i n t e n d e d t o g e n e r a t e t h e economic d e t e r m i n a n t s o f s t r i k e a c t i v i t y t o be used i n t h e e m p i r i c a l a n a l y s i s o f t h e r e l a t i o n s h i p between changes i n l a b o u r l e g i s l a t i o n and s t r i k e a c t i v i t y i n B r i t i s h Columbia from 1945 through 1975. 2.1 The B a s i c Framework The b a s i c framework o f a n a l y s i s i s t h e b i l a t e r a l monopoly framework. The economy i s d i v i d e d i n t o two s e c t o r s : a u n i o n i z e d s e c t o r whose f i r m s engage i n i m p e r f e c t c o m p e t i t i o n and a lower-wage 4 n o n - u n i o n i z e d s e c t o r whose f i r m s engage i n pure c o m p e t i t i o n . Wage S e e , f o r i n s t a n c e , A s h e n f e l t e r and Johnson ( 1 9 6 9 ) , Eaton ( 1 9 7 2 ) , H e i s e r ( 1 9 7 0 ) , J o h n s t o n ( 1 9 7 2 a ) , Kraus and M e l n i c k ( 1 9 7 2 ) , T r i f i n and Landau ( 1 9 7 4 ) , and R a b i n o v i t c h and Swary ( 1 9 7 6 ) . 4 In " p u r e c o m p e t i t i o n " f i r m s a r e p r i c e - t a k e r s b u t d e c i s i o n makers do not possess p e r f e c t i n f o r m a t i o n , as they would i n " p e r f e c t c o m p e t i t i o n . " 20 d i s p e r s i o n e x i s t s i n the o r g a n i z e d s e c t o r ; i t o c c u r s because o f d i f -f e r e n c e s i n u n i o n b a r g a i n i n g power v i s - a - v i s employers and o b v e r s e l y and because c o l l e c t i v e agreements e x p i r e on d i f f e r e n t d a t e s . I t i s assumed t h a t f i r m s i n the c o m p e t i t i v e s e c t o r a r e " i n e q u i l i b r i u m , " e a r n i n g a "normal r a t e o f r e t u r n " b u t t h a t the i m p e r f e c t l y c o m p e t i t i v e 5 f i r m s e a r n supernormal r a t e s o f r e t u r n on t h e i r c a p i t a l . In o t h e r w o r d s , the u n i o n i z e d f i r m , a m o n o p o l i s t o r o l i g o p o l i s t , e a r n s " e c o -nomic r e n t s . " (The l a t t e r term i s used l o o s e l y h e r e . ) The o r g a n i z e d f i r m and i t s u n i o n can engage i n c o l l e c t i v e b a r g a i n i n g because they a r e b e t t e r o f f where they a r e than e l s e w h e r e i n the economy. The f i r m i s r e l u c t a n t t o m i g r a t e w i t h i n t h e economy, s i n c e i t would e a r n a l o w e r r a t e o f r e t u r n i n the p u r e l y c o m p e t i t i v e s e c t o r and s i n c e r e n t s would be c a p i t a l i z e d i n t o the s a l e p r i c e of a f i r m i n the i m p e r f e c t l y c o m p e t i t i v e s e c t o r , r e d u c i n g t h e r e t u r n S e e , f o r e x a m p l e , Dunlop (1948) i n Rowan, (1976, 70) c o n -c e r n i n g market s t r u c t u r e and u n i o n i z a t i o n . A r c h i b a l d and N o r t h ( 1 9 7 2 ) , f o r i n s t a n c e , have a n a l y s e d u n i o n i z a t i o n w i t h i n p u r e l y c o m p e t i t i v e i n d u s t r i e s i n p a r t i c u l a r . T h e i r a n a l y s i s f o c u s e s on f i r m s ' m a r g i n a l c o s t c u r v e s , s i n c e by d e f i n i t i o n f i r m s a r e p r i c e - t a k e r s i n p u r e l y c o m p e t i t i v e i n d u s t r i e s . E v e r y t h i n g e l s e t h e same, n o n - u n i o n i z e d f i r m s e n j o y l o w e r m a r g i n a l c o s t s than u n i o n i z e d f i r m s i n t h e i n d u s t r y , i f t h e u n i o n wage r a t e exceeds t h e n o n - u n i o n wage r a t e . S i g n i f i c a n t l y , the e x i s t e n c e o f t h i s c o s t d i f f e r e n t i a l c r e a t e s an i n c e n t i v e not o n l y f o r u n i o n s , but a l s o f o r employers t o seek to o r g a n i z e t h e n o n - u n i o n p l a n t s i n the i n d u s t r y . M o r e o v e r , n o n - u n i o n i z e d f i r m s w i l l a t t e m p t t o e n t e r the i n d u s t r y t o c a p t u r e t h e i n f r a - m a r g i n a l p r o f i t s t h a t r e s u l t f r o m t h e u n i o n / n o n - u n i o n wage d i f f e r e n t i a l . U n i o n i z e d f i r m s c l e a r l y w i l l a t t e m p t t o r e p e l n o n - u n i o n i z e d f i r m s from e n t e r i n g t h e i n d u s t r y and from r e a l i z i n g such i n f r a - m a r g i n a l p r o f i t s . Economic r e n t s a r e , of c o u r s e , r e t u r n s t h a t a c c r u e due to demand o r s u p p l y r i g i d i t i e s . They a c c r u e , f o r i n s t a n c e , t o f a c t o r s o f p r o d u c t i o n t h a t a r e f i x e d or " q u a s i - f i x e d . " ( S e e , f o r example, L i p s e y (1970) and Oi ( 1 9 6 2 ) . ) 21 t h a t t h e f i r m would d e r i v e from such a p u r c h a s e . 7 The u n i o n members c l e a r l y a r e r e l u c t a n t t o m i g r a t e t o t h e lower-wage n o n - u n i o n l a b o u r s e c t o r . Assuming t h a t i n f o r m a t i o n i s i m p e r f e c t , t h e o r g a n i z e d f i r m ' s employees presumably p e r c e i v e t h a t t h e y would r e c e i v e a l o w e r l i f e t i m e income stream i f t h e y d e c i d e d t o q u i t ^ t h e f i r m , become unemployed and s e a r c h f o r employment i n t h e u n i o n i z e d s e c t o r . The d i f f e r e n t i a l i n r a t e s o f r e t u r n and wages i n t h e two s e c t o r s means t h a t t h e f i r m ' s r e s e r v a t i o n wage ( t h e wage r a t e a t which i t would l e a v e t h e i n d u s t r y ) exceeds t h e u n i o n ' s r e s e r v a t i o n wage ( t h e wage r a t e a t w h i c h employees would l e a v e t h e f i r m ) , t h e r e b y making wage n e g o t i a -t i o n s p o s s i b l e . I t a l s o means t h a t t h e o r g a n i z e d f i r m and i t s employees can i n c u r some o f t h e c o s t s o f s t r i k e a c t i o n i n an a t t e m p t a t i n d u c i n g c o n c e s s i o n a r y wage b e h a v i o u r a t t h e b a r g a i n i n g . t a b l e . Both l a b o u r and management a r e g a i n - m a x i m i z e r s . The u n i o n i n p a r t i c u l a r a t t e m p t s t o u s u r p as much as i t can o f f i r m ' s r e n t s t h r o u g h c o l l e c t i v e b a r g a i n i n g . O p e r a t i n g under u n c e r t a i n t y , t h e f i m r , i n t u r n , " b u r i e s i t s r e n t s , " i n o r d e r t o make t h e f i r m ' s " a b i l i t y t o pay" seem l e s s a t t r a c t i v e t o t h e u n i o n - - a s w e l l as t o d e t e r c o m p e t i t o r s from e n t e r i n g t h e i n d u s t r y and f o r t a x p u r p o s e s . Labour and management n e g o t i a t e under u n c e r t a i n t y . D u r i n g n e g o t i a t i o n s t h e y a r e u n c e r t a i n as to (1) t h e f i n a l wage s e t t l e m e n t s i n c e t h e l a t t e r r e q u i r e s matual c o n s e n t , and (2) whether o r not a s t r i k e w i l l o c c u r o r , i f one i s t a k i n g p l a c e , how l o n g i t w i l l c o n t i n u e . S e e , f o r e x a m p l e , Smith (1971, 2 7 - 2 8 ) . 22 The ( " c o n t r o l " ) v a r i a b l e s through which l a b o u r and management seek t o i n f l u e n c e the f i n a l wage s e t t l e m e n t a r e , o f c o u r s e , the wage o f f e r s they make and the d e c i s i o n whether o r not t o s t r i k e . U n c e r t a i n t y causes l a b o u r and management t o c o n s i d e r the s e t o f p o s s i b l e outcomes to n e g o t i a t i o n s and t o a t t a c h p r o b a b i l i t i e s t o them, as e x p l a i n e d below. D e c i s i o n - m a k e r s a r e assumed to be r i s k - n e u t r a l . B e i n g r i s k -n e u t r a l , d e c i s i o n - m a k e r s seek to maximize e x p e c t e d g a i n s . The d e c i -s i o n r u l e s t h a t they u s e , c o n s e q u e n t l y , i n v o l v e e x p e c t e d g a i n s . F o l l o w i n g J o h n s t o n (1972a, 8 4 8 ) , i t i s assumed t h a t d e c i s i o n - m a k e r s know t h e n a t u r e b u t not n e c e s s a r i l y the form ( i . e . , the p a r a m e t e r s ) o f t h e i r a d v e r s a r i e s ' d e c i s i o n - f r a m e w o r k . General l a b o u r r e l a t i o n s laws r e g u l a t e the c o l l e c t i v e b a r -g a i n i n g p r o c e s s . Labour s t a t u t e s s e t o u t c e r t i f i c a t i o n and d e c e r t i f i -c a t i o n p r o c e s s e s whereby unions o r e m p l o y e r s ' a s s o c i a t i o n s can a t t a i n l e g a l s a n c t i o n i n g to b a r g a i n c o l l e c t i v e l y as e x c l u s i v e b a r g a i n i n g agents on b e h a l f o f a p p r o p r i a t e b a r g a i n i n g u n i t s . They a l s o p r o v i d e f o r t h i r d - p a r t y i n t e r v e n t i o n i n t o n e g o t i a t i o n s and s t i p u l a t e t h a t l a b o u r and management have a " d u t y t o b a r g a i n " a n d , m o r e o v e r , a " d u t y t o b a r g a i n i n ' g o o d f a i t h . ' " Two d e a d l i n e p r o c e d u r e s i n t h e s e a c t s a p p l y t o c o l l e c t i v e b a r g a i n i n g . One r e q u i r e s the commencement o f ne-g o t i a t i o n s by a s t i p u l a t e d d a t e ; t h e o t h e r i s the d e a d l i n e f o r l a w f u l s t r i k e a c t i o n , w h i c h t h e s e s t a t u t e s s a n c t i o n . These s t a t u t e s r e g u l a t e s t r i k e a c t i o n , t y p i c a l l y p e r m i t t i n g s t r i k e r s t o resume employment a f t e r the s t r i k e has ended. M o r e o v e r , t h e y s t i p u l a t e t h a t new p u r c h a s e r s o f e x i s t i n g , o p e r a t i n g f i r m s ( s o - c a l l e d s u c c e s s o r s ) a r e o b l i g e d to 23 honour p r e v i o u s l y e x i s t i n g b a r g a i n i n g r e l a t i o n s h i p s and c o l l e c t i v e a g r e e m e n t s . (That i s , t h e s e laws s t i p u l a t e " s u c c e s s o r r i g h t s and o b -l i g a t i o n s . " , ) General l a b o u r r e l a t i o n s l a w s , t h e r e f o r e , r e i n f o r c e the s y m b i o t i c r e l a t i o n s h i p between l a b o u r and c a p i t a l , making i t d i f f i c u l t ( b u t by no means i m p o s s i b l e ) f o r e i t h e r l a b o u r o r management t o s e v e r 8a t h e i r b a r g a i n i n g r e l a t i o n s h i p . 8 " R u i n a t i o n " c o n s t r a i n s the b a r g a i n e r s . " R u i n a t i o n " o c c u r s whenever the c o l l e c t i v e b a r g a i n i n g r e l a t i o n s h i p between l a b o u r and management i s p e r m a n e n t l y s e v e r e d — t h a t i s , whenever the f i r m s h u t s down, s e e k i n g t o m i g r a t e , or whenever t h e u n i o n m i g r a t e s o r l o s e s i t s members ( i . e . , i s b r o k e n ) . 2 . 2 The F i r m The f i r m ' s g a i n f u n c t i o n , i t s net worth f u n c t i o n , w i l l be d e f i n e d as f o l l o w s : l ( s , w ) = 00 (pQ - wL - H ) e " r t d t rs H e " r t d t J 0 F C f - F ( s ) + SI -RP . . . . (1) 8 The term and n o t i o n o f r u i n a t i o n i n b a r g a i n i n g t h e o r i e s d a t e s a t l e a s t t o the 1930s. See H i c k s (1966) and Zeuthen ( 1 9 6 8 ) , both o f which o r i g i n a l l y were p u b l i s h e d i n the 1930s. 8a A n o t h e r f a c t o r w h i c h w i l l t e n d to cement t h e s y m b i o t i c r e -l a t i o n s h i p between l a b o u r e r and c a p i t a l i s f i r m - s p e c i f i c human c a p i t a l . Union members who p o s s e s s f i r m - s p e c i f i c human c a p i t a l g e n e r a l l y w i l l seek t o remain employed by t h e f i r m i n the e v e n t o f a s t r i k e . F u r t h e r m o r e , they w i l l a t t e m p t t h r o u g h c o l l e c t i v e b a r g a i n i n g t o c a p t u r e some, i f not a l l , o f t h e r e n t s t h a t stem f r o m t h e human c a p i t a l they embody. The f i r m o b v i o u s l y would p r e f e r t o r e t a i n t h o s e employees who p o s s e s s f i r m -s p e c i f i c human c a p i t a l , r a t h e r than i n c u r the c o s t s o f t r a i n i n g employ-ees who l a c k i t . ( S e e , f o r e x a m p l e , Walton and M c K e r s i e , 1965, 2 1 - 2 3 . ) 24 where F C f = F ( s ) = SI = a e " r t d t ; a > 0 and a ' = 0 0 ' s - r t be r t d t ; b > 0 and b' = 0 ° - r t ce d t ; c > 0 , c ' = 0 but SI = c s f o f o r s > s Q where s Q > 0 and s ' 0 = 0 RP = v ; v - 0 and v ' = 0 The two i n t e g r a l terms d e r i v e from A s h e n f e l t e r and J o h n s o n . The l e f t -hand i n t e g r a l r e p r e s e n t s t h e f i r m ' s f u t u r e p r o f i t s t r e a m , d i s c o u n t e d a t r a t e r and c a l c u l a t e d from t h e d a t e t h e s t r i k e e n d e d , s . I n t h e e x p r e s s i o n f o r - p r o f i t s , (pQ - wL - H ) , p , Q, w , L, and H r e s p e c t i v e l y s t a n d f o r p r i c e , q u a n t i t y , wage r a t e , l a b o u r s e r v i c e s and t h e o p p o r t u n i t y c o s t s o f the f i r m s c a p i t a l . The r i g h t - h a n d i n t e g r a l r e p r e s e n t s t h e c a p i t a l c o s t s t h a t the f i r m w i l l i n c u r u n t i l the s t r i k e e n d s . The u n -c o v e r e d f i x e d c o s t s are a pfujonl f i x e d c o s t s and do not i n c l u d e a poAt&Uotu. f i x e d c o s t s , s i n c e " b y - g o n e s a r e b y - g o n e s . " ^ The d i f f e r e n c e between the two i n t e g r a l s s i m p l y means t h a t the f i r m w i l l f o r e g o p r o f i t s d u r i n g t h e s t r i k e and t h a t i t w i l l i n c u r f i x e d c o s t s d u r i n g t h e s t r i k e . F o l l o w -i n g A s h e n f e l t e r and Johnson ( 1 9 6 9 , 3 7 - 3 9 ) , we s h a l l a b s t r a c t from t e c h -n o l o g i c a l change and i g n o r e t h e wage-employment t r a d e - o f f . ^ 9 T h u s , whenever the e x p r e s s i o n , (pQ - wL - H) e " r t d t J . 0 t a k e s on a z e r o v a l u e , t h e f i r m i s c o v e r i n g i t s c a p i t a l c o s t s ( i . e . , e a r n i n g a normal r a t e o f r e t u r n ) . 1 0 S e e , f o r e x a m p l e , H i c k s , 1966, 145. 1 h o w e v e r , the wage-employment t r a d e - o f f c o u l d be appended t o t h e c u r r e n t t h e o r y by f o l l o w i n g H e i s e r , as e x p l a i n e d b e l o w . 25 The t e r m , FC^, r e p r e s e n t s t h e f i x e d c o s t s (FC) to the f i r m ( f ) o f s t r i k e a c t i v i t y . These f i x e d c o s t s a r e m o d e l l e d as a p o s i t i v e c o n s t a n t , a , w h i c h i s d i s c o u n t e d a t the r a t e r . FC^ i s i n c l u d e d i n e q u a t i o n (1) to add r e a l i s m t o t h e c u r r e n t b a r g a i n i n g t h e o r y . In p a r -t i c u l a r , FC^ c r e a t e s a d i s i n c e n t i v e f o r the f i r m to a t t e m p t t o engage i n s t r i k e s o f v e r y s h o r t d u r a t i o n . FC^ c l e a r l y has a g r e a t e r impact on NW ( s , w ) f o r s h o r t s t r i k e s as opposed to l o n g s t r i k e s , e v e r y t h i n g e l s e t h e same. There a r e both t h e o r e t i c a l and e m p i r i c a l r e a s o n s f o r e x p e c t -i n g t h a t once a c o n t r a c t n e g o t i o n s s t r i k e t a k e s p l a c e , i t w i l l l a s t f o r a minimum o f , s a y , s e v e r a l d a y s . The t h e o r e t i c a l r e a s o n i s t h a t the s i d e a g a i n s t whom s t r i k e ( o r l o c k o u t ) a c t i o n i s t a k e n presumably w i l l p r o l o n g the s t r i k e , t h e r e b y i m p o s i n g g r e a t e r c o s t s on t h e a d v e r s a r y , (1) i n o r d e r t o p u n i s h the a d v e r s a r y and (2) i n an a t t em pt a t g e n e r a t -i n g c o n c e s s i o n a r y b e h a v i o u r a t t h e b a r g a i n i n g t a b l e . That i s , a few d a y s ' s t r i k e p r o b a b l y w i l l not g e n e r a t e much i n t h e way o f c o n c e s s i o n a r y b e h a v i o u r . The e m p i r i c a l r e a s o n i s t h a t the average d u r a t i o n o f f i r s t agreement s t r i k e s and c o n t r a c t renewal s t r i k e s was s e v e r a l weeks i n B r i t i s h Columbia d u r i n g 1945-75. (See T a b l e 1 b e l o w . ) F ( s ) i s a H e i s e r i a n s u p p l e m e n t a r y f u n c t i o n (1970, 6 5 ) . I t models the f i n a n c i a l s t r i n g e n c y and the l o s s o f "good w i l l " ( e . g . , the l o s s o f market s h a r e s ) t h a t the employer may e x p e r i e n c e d u r i n g a s t r i k e . " F i n a n c i a l s t r i n g e n c y " means t h a t the f i r m l a c k s s u f f i c i e n t r e c e i p t s t o c o v e r e x p e n d i t u r e s d u r i n g the s t r i k e . A c o n s t a n t , b , i s u s e d , f o r the sake o f c o n v e n i e n c e , t o model f i n a n c i a l s t r i n g e n c y and t h e l o s s o f "good w i l l . " 26 SI and RP come from E a t o n ' s m o d e l . S t r i k e i n s u r a n c e , S I , i n c r e a s e s t h e f i r m ' s net w o r t h and makes i t e a s i e r f o r the f i r m t o w i t h -s t a n d a s t r i k e w h i l e r e t r o a c t i v e payments, RP, c l e a r l y d e c r e a s e t h e f i r m ' s n e t w o r t h . SI t y p i c a l l y i s p a i d a t a c o n s t a n t r a t e d u r i n g a s t r i k e and i s so m o d e l l e d a b o v e . The v a r i a b l e , s ^ , measures the l e n g t h o f t i m e , a t the end o f w h i c h s t r i k e i n s u r a n c e i s no l o n g e r p a i d . For the sake o f s i m p l i c i t y and f o l l o w i n g Eaton (1972, 6 7 6 ) , RP w i l l be t r e a t e d as a lump-sum payment a n d , t h e r e f o r e , be c o n s t a n t i n v a l u e . The p r o p e r t i e s o f t h e f i r m ' s n e t worth f u n c t i o n p r o b a b l y can be b e s t u n d e r s t o o d by c o n s t r u c t i n g " i s o - n e t w o r t h f u n c t i o n s " i n t h e f i r s t q u a d r a n t o f the s t r i k e - w a g e p l a n . I n t e g r a t i o n and s i m p l i f i c a -t i o n o f e q u a t i o n (1) y i e l d s : NW(s,w) = (1/r) (pQ - wL + b - c ) e " r s - ( 1 / r ) (H + a + B - C) - v . . . . (2) L e t us t a k e the t o t a l d i f f e r e n t i a l o f e q u a t i o n (2) and s e t i t equal t o z e r o . The r e s u l t i s dNW = (9NW/9s)ds + (9NW/ w)dw = 0 . . . . (3) where (3'NW/ars) = -(pQ - wL + b - c ) e " r s . . . . (4) and where (9NW/9w) = - ( 1 / r ) L e " r s . . . . (5) The s l o p e o f t h e i s o - n e t w o r t h f u n c t i o n i s (aNW/as) dW = - -, r-d ? (9NW/9W) dNW=0 = - ( r / L ) [(pQ - wL) + (b - c ) ] . . . . (6) 27 I t i s g e n e r a l l y e x p e c t e d t h a t e q u a t i o n (6) w i l l be n e g a t i v e . I t c l e a r l y i s n e g a t i v e whenever the term i n b r a c k e t s i s p o s i t i v e . Economic r e a l i s m r e q u i r e s t h a t (pQ-wL) be p o s i t i v e . I f no s t r i k e i n s u r a n c e were p a i d ( i . e . , c = 0 ) , as o f t e n i s the c a s e , t h e s l o p e o f the NW f u n c t i o n u n -ambiguously w i l l be n e g a t i v e . Only i f the a b s o l u t e v a l u e o f c exceeds t h e a b s o l u t e v a l u e o f (pQ - wL + b) w i l l NW have a p o s i t i v e s l o p e . B u t , the l i k e l i h o o d t h a t t h i s w i l l o c c u r i s e x c e e d i n g l y s m a l l , s i n c e s t r i k e i n s u r a n c e payments ( c ) must exceed f o r e g o n e p r o f i t s , (pQ - w L ) , pliu> t h e l o s s e s due t o f i n a n c i a l s t r i n g e n c y and t o t h e l o s s o f "good w i l l " ( b ) . The second d e r i v a t i v e o f t h e i s o - n e t worth f u n c t i o n i s 2 dfw d s 2 dNW = 0 . . . . (7) dNW = 0 T h u s , each i s o - N W f u n c t i o n g e n e r a l l y w i l l be a n e g a t i v e l y s l o p e d c u r v e w h i c h i s c o n c a v e t o t h e o r i g i n . F i g u r e 1 d e p i c t s a c o n t o u r map o f the net w o r t h f u n c t i o n i n t h e t y p i c a l case (where i t has a n e g a t i v e s l o p e ) . F i g u r e 2 d e p i c t s the n e t w o r t h f u n c t i o n i n t h r e e d i m e n s i o n s . The c o n s t r a i n t o f r u i n a t i o n i s d e p i c t e d i n F i g u r e s 1 and 2 by t h e " r u i n a t i o n c u r v e , " N W Q C . N W Q C i s the f i r m ' s l o n g run s h u t down c u r v e , t h e c u r v e a t which t h e f i r m j u s t f a i l s t o c o v e r i t s o p p o r -t u n i t y c o s t s . NWQ c w i l l be d e f i n e d as N W 0 c ( s , w ) = (pQ - wL - H ) e " r t d t = 0 0 The p r o p e r t i e s o f t h e NW f u n c t i o n t h a t were p r e s e n t e d h e r e -t o f o r e a p p l y t o p r e - s t r i k e n e g o t i a t i o n s . The n e t w o r t h f u n c t i o n t h a t a p p l i e s t o p o s t - s t r i k e n e g o t i a t i o n s w i l l d i f f e r from i t s p r e - s t r i k e c o u n t e r p a r t i n two s e e m i n g l y s m a l l b u t , n o n e t h e l e s s , s i g n i f i c a n t ways. w Union's Net-Gain Function L e g e n d : w = wage offer (or potential wage settlement) s = duration of work stoppage Wf = firm's latest wage offer m = date on which union's strike pay expires N E B = iso-net e c o n o m i c benefit function NEBQC = union's ruination curve w 0 s 0 Firm's Net-Gain Function w u = union's latest wage offer So = date on which firm's strike NW = iso-net worth function NWQC = firm's ruination curve Figure 1 Contour Maps of Union and Firm Net-Gain Functions Union's Net-Gain Function Firm's Net-Gain Function L e g e n d : w s N E B N E B 0 C N W N W 0 C w a g e offer (or potential settlement) duration of work stoppage net e c o n o m i c benefits union's ruination curve net worth firm's ruination curve Figure 2 Three-Dimensional View of Union and Firm Net-Gain Functions 30 L e t us assume t h a t the s t r i k e d u r a t i o n t o date i s s . One d i f f e r e n c e i s t h a t the p o s t - s t r i k e s u p p l e m e n t a r y f u n c t i o n , F ( s ) , w i l l be F ( s ) = b e " r t d t + b e ~ r t d t ; b > 0 and b' = 0 , as opposed t o F ( s ) = - r t be d t f o r p r e - s t r i k e n e g o t i a t i o n s . Forms o f f i n a n c i a l s t r e s s - - s u c h as l o s t market s h a r e s , l o a n s t h a t were t a k e n o u t d u r i n g the s t r i k e and the i n t e r e s t on t h o s e l o a n s — a r e n o t by-gones. I n s t e a d , they cumulate, o v e r time and they c o n s t i t u t e nonZ. economic c o s t s . The r e a l c o s t s t h a t a c c u m u l a t e d u r i n g a s t r i k e a r e s r e p r e s e n t e d by b e " r t d t i n the p o s t - s t r i k e f o r m u l a t i o n o f F ( s ) , I t s h o u l d be noted t h a t t h e z e r o i n t h e p o s t - s t r i k e s u p p l e m e n t a r y f u n c -t i o n r e p r e s e n t s the c u r r e n t p o i n t i n t i m e ; w h e r e a s , i t r e p r e s e n t s t h e date on which t h e s t r i k e w i l l commence i n t h e p r e - s t r i k e s u p p l e m e n t a r y f u n c t i o n . The o t h e r d i f f e r e n c e i s t h a t p o s t - s t r i k e i n s u r a n c e payments, S I , w i l l be SI ( s - i ) - r t > ce d t ; c — 0 and c 1 0 f o r s < S r and SI = 0 f o r s . > s Q - s . What d i s t i n g u i s h e s t h i s SI from p r e - s t r i k e SI i s t h a t s t r i k e payments w i l l c e a s e a f t e r a t i m e p e r i o d o f ( s Q - s) d u r i n g p o s t - s t r i k e n e g o t i a t i o n s , as opposed t o a f t e r a t i m e p e r i o d o f S q d u r i n g p r e - s t r i k e n e g o t i a t i o n s . 31 These d i f f e r e n c e s mean t h a t t h e p r e - s t r i k e shape o f NW w i l l d i f f e r from i t s p o s t - s t r i k e s h a p e — p r o v i d e d t h a t e i t h e r the f i r m e x -p e r i e n c e s f i n a n c i a l s t r e s s d u r i n g the s t r i k e ( i . e . , b > 0) o r s t r i k e i n s u r a n c e i s p a i d ( i . e . , c > 0 ) . I f t h e f o r m e r c o n d i t i o n o b t a i n s , t h e NW f u n c t i o n — i n c l u d i n g the f i r m ' s r u i n a t i o n c u r v e w i l l s h i f t towards t h e wage a x i s , as the s t r i k e o c c u r s . I f the l a t t e r c o n d i t i o n h o l d s , the p o r t i o n o f the NW f u n c t i o n t h a t i s k i n k e d a t the d a t e when d e f e n c e funds run o u t , a l s o w i l l s h i f t towards the wage a x i s as s i n c r e a s e s . A l t e r n a t i v e l y , the wage a x i s w i l l s h i f t eastwards i n F i g u r e 1 above. 2 . 3 The Union The u n i o n ' s g a i n f u n c t i o n , i t s n e t economic b e n e f i t s f u n c t i o n , NEB, w i l l be d e f i n e d as f o l l o w s : NEB ( s , w ) = } (w - w ) L e _ 1 t d t w f L e _ l t d t where F C u = G(s) SP = - FC u - G(s) + SP + RP + AI f e ~ l t d t ; f > 0 and f ' = 0 g e - l t d t ; g > 0 and g ' = 0 h e _ l t ; h > 0 and h ' = 0 (8) f o r s < m where m > 0 f m - i t he f o r s > m, and AI = d e - 1 t d t ; d > 0 and d ' = 0 . 32 The two i n t e g r a l terms i n e q u a t i o n (8) d e r i v e d from H e i s e r (1970) and Eaton ( 1 9 7 2 ) . The l e f t - h a n d i n t e g r a l i n e q u a t i o n (8) r e p r e s e n t s t h e p r e s e n t v a l u e o f t h e s t r i k e - i n d u c e d d i f f e r e n t i a l i n t h e w o r k e r ' s wage b i l l , ( w - w r ) L , c a l c u l a t e d from the day the s t r i k e e n d s , s , u n t i l the w o r k e r s ' e x p e c t e d r e t i r e m e n t d a t e , I, and d i s c o u n t e d a t the r a t e i . The s t r i k e -i n d u c e d wage s e t t l e m e n t , w, i s measured r e l a t i v e to t h e w o r k e r s ' r e s e r v a -t i o n wage, w r - The r e s e r v a t i o n wage i s i n c l u d e d here because t h e worker has t h e a l t e r n a t i v e of m i g r a t i n g . I t s i n c l u s i o n means t h a t the u n i o n r u i n a t i o n c u r v e makes s e n s e , as e x p l a i n e d b e l o w . The r e s e r v a t i o n wage i s t h e average maximum wage r a t e a t which the f i r m ' s employees would l e a v e t o seek employment e l s e w h e r e . Con-f r o n t e d w i t h wage d i s p e r s i o n and g i v e n a p r o b a b i l i t y d i s t r i b u t i o n c o r -r e s p o n d i n g t o t h o s e wages, the i n d i v i d u a l employee c a l c u l a t e s t h e wage r a t e he e x p e c t s t o r e a l i z e t h r o u g h q u i t t i n g t h e f i r m , becoming unemployed and s e e k i n g employment e l s e w h e r e . T h i s wage r a t e i s t h e r e s e r v a t i o n wage. I t i s w e l l known from t h e j o b s e a r c h l i t e r a t u r e t h a t w r w i l l i n -c r e a s e i f the mean o f the wage d i s p e r s i o n i n c r e a s e s o r i f t h e unemploy-12 ment r a t e d e c r e a s e s , and o b v e r s e l y . The r i g h t - h a n d i n t e g r a l i n e q u a t i o n (8) r e p r e s e n t s t h e o p p o r -t u n i t y c o s t s to t h e employees o f t h e work s t o p p a g e ; i t i s c o s t e d a t t h e e m p l o y e r ' s l a t e s t wage o f f e r , w f . I f t h e employer has made no wage o f f e r , t h e l a t e s t c o n t r a c t u a l wage r a t e , w c , i s s u b s t i t u t e d f o r w^. The net r e t u r n o f s t r i k e a c t i o n t o t h e u n i o n ' s members i s c a l -c u l a t e d by s u b t r a c t i n g the o p p o r t u n i t y c o s t s o f s t r i k e a c t i o n from the 1 2 S e e f o r i n s t a n c e , M c C a l l (1970) o r Whipple ( 1 9 7 3 ) . 33 s t r i k e - i n d u c e d b e n e f i t s . H e i s e r and Eaton o r i g i n a l l y f o r m u l a t e d t h i s 13 c a l c u l a t i o n . B u t , d e c i s i o n - m a k e r s i n t h e i r models used a framework i n v o l v i n g summations o v e r d i s c r e t e t i m e p e r i o d s as opposed t o t h e i n -14 t e g r a l framework used h e r e . 1 3 D e c i s i o n - m a k e r s i n t h e H e i s e r and Eaton f o r m u l a t i o n s a l s o took t h e wage-employment t r a d e - o f f i n t o a c c o u n t . H e i s e r 1 s t r e a t m e n t o f t h e wage-employment t r a d e - o f f i s more a p p r o p r i a t e than E a t o n ' s f o r the c u r r e n t m o d e l . ( S e e , f o r e x a m p l e , Appendix A , 180-182 and 1 8 6 - 1 9 6 . ) U s i n g H e i s e r ' s a s s u m p t i o n s , our f i r m ' s n e t w o r t h f u n c t i o n would become NW(s,w) = J [Qw/( e - 1) - H] e " r t d t -I H e " r t d t s J o - Q : F ( s , w ) + SI - RP where e i s the e l a s t i c i t y o f t h e m o n o p o l i s t ' s demand c u r v e a t w. Our u n i o n ' s n e t economic b e n e f i t f u n c t i o n would become NEB(s,w) = 1 - i t f s - i t QW(1 - .n>e 1  z6t - Qwe L d t s ' o - FC u + SP + RP + AI where n i s t h e a r c e l a s t i c i t y o f t h e f i r m ' s demand f o r l a b o u r c u r v e a t (w-w ) . (See Appendix A , 187-191 o r H e i s e r , .1970, 63 and 6 5 . ) 14 The i n t e g r a l framework was s e l e c t e d because f u n c t i o n s which use i t can be d i f f e r e n t i a t e d w i t h r e s p e c t t o the s t r i k e l e n g t h s . U n f o r -t u n a t e l y , the summations o v e r d i s c r e t e t i m e p e r i o d s w h i c h a r e e q u i v a l e n t to the l e f t - h a n d i n t e g r a l s i n (1) and (6) do not change i n v a l u e when s c h a n g e s . T h i s means, f o r e x a m p l e , t h a t t h e u n i o n and f i r m i n d i f f e r e n c e c u r v e s i n H e i s e r ' s t h e o r y have shapes w h i c h are much d i f f e r e n t from t h e shapes o f t h e i s o - N E B and iso-NW c u r v e s i n t h i s t h e o r y . (See H e i s e r , 1970, 6 1 - 6 7 . ) I t a l s o means t h a t , i f t h e s u p p l e m e n t a r y f u n c t i o n s t a k e on a z e r o v a l u e i n t h e H e i s e r model (as w e l l as t h o s e o f J o h n s t o n and R-S) t h a t a c o r n e r s o l u t i o n i s r e a c h e d . [See Appendix A , 191-195; H e i s e r , 1970, 6 6 ; J o h n s t o n 1972a, 8 4 5 - 4 6 ; and R - S , 1976, 674 ( s u b s t i t u t i n g 0 f o r F ( s ) i n e q u a t i o n ( l ) ) a n d 676.] I n d e e d , H e i s e r i n e f f e c t g r a f t e d the s u p p l e m e n t a r y f u n c t i o n s onto h i s m o d e l , i n o r d e r t o a v o i d t h e s e c o r n e r s o l u t i o n s . 34 FC U r e p r e s e n t s the f i x e d c o s t s (FC) t o the u n i o n (u) o f s t r i k e a c t i v i t y . I t i s the u n i o n c o u n t e r p a r t t o the f i r m ' s FC^ f u n c t i o n . FC u ( l i k e FC^) c r e a t e s a d i s i n c e n t i v e f o r l a b o u r (management) t o e x p e c t t h a t c o n t r a c t n e g o t i a t i o n s s t r i k e s w i l l be r e l a t i v e l y s h o r t i n d u r a t i o n ( i . e . , a few d a y s ) . The two terms—SP and AI—come from E a t o n ' s t h e o r y . They r e -s p e c t i v e l y s t a n d f o r s t r i k e p a y , and a l t e r n a t i v e income. S t r i k e pay t y p i c a l l y i s p a i d a t a c o n s t a n t r a t e (h) d u r i n g t h e s t r i k e and i s so m o d e l l e d a b o v e . The t i m e p e r i o d , m, i s the t i m e p e r i o d d u r i n g which s t r i k e pay i s p a i d . The a l t e r n a t i v e income t h a t employees e a r n d u r i n g a s t r i k e w i l l be m o d e l l e d as though i t were p a i d a t a c o n s t a n t r a t e (d) t o a group o f " r e p r e s e n t a t i v e s t r i k e r s . " In p a r t i c u l a r the a l t e r n a t i v e income f o r m u l a t i o n o p e r a t e s cu> 1^ some s t r i k e r s found a l t e r n a t i v e em-ployment i m m e d i a t e l y a f t e r the s t r i k e began and remained employed u n t i l t h e s t r i k e ended. As s u c h , i t evens o u t t h e customary phenomenon, t h a t s t r i k e r s spend p o r t i o n s o f t h e s t r i k e d u r a t i o n unemployed and/OK employed. G(s) i s a H e i s e r i a n s u p p l e m e n t a r y f u n c t i o n . I t models t h e f i n a n c i a l s t r e s s t h a t employees e x p e r i e n c e d u r i n g a s t r i k e . Union f i n a n c i a l s t r e s s , l i k e f i r m f i n a n c i a l s t r e s s , w i l l be m o d e l l e d l i n e a r l y as though i t were i n c u r r e d a t a c o n s t a n t r a t e ( g ) . I s o - n e t economic b e n e f i t f u n c t i o n s w i l l be c o n s t r u c t e d i n o r d e r t o p r e s e n t the p r o p e r t i e s o f the u n i o n ' s net economic b e n e f i t f u n c t i o n . I n t e g r a t i o n and s i m p l i f i c a t i o n o f (6) y i e l d s NEB(s,w) = ( l / i ) ' { ( w - w r ) L ( e - i s - e - i ^ + I w f L + ( g - h - d ) j ( e * l s - l ) + f ( e " i ^ - 1 ) 1 + V . . . . (9) 35 D i f f e r e n t i a t i n g (7) t o t a l l y and s e t t i n g dNEB equal t o z e r o , we f i n d t h a t t h e s l o p e o f the i n d i f f e r e n c e c u r v e i s dw ds = - (3 NEB/3 s) / (3 NEB/9 w) dNEB = 0 where and where (3NEB/9s) = - [(w - w + w f ) L + ( g - h - d ) l e ' (3NEB/9W) = ( l / i ) L [ e 1 s - e " l £ ] > 0 • i s (10) (11) f o r r e a l i s t i c s t r i k e l e n g t h s (s< 1). G e n e r a l l y s p e a k i n g , each i s o - n e t economic b e n e f i t f u n c t i o n s h o u l d have a p o s i t i v e s l o p e , s i n c e the s i g n o f (3NEB/3s) n o r m a l l y s h o u l d be n e g a t i v e f o r r e a l i s t i c wage s e t t l e m e n t s (w > w r ) . The l a t t e r w i l l o c c u r , f o r i n s t a n c e , i f the employees r e c e i v e d no a l t e r n a t i v e i n -come (d) and i f the f i n a n c i a l s t r e s s they e x p e r i e n c e d (g) outweighed t h e s t r i k e pay they r e c e i v e d ( h ) . I n d e e d , t h i s may be t h e t y p i c a l c a s e . The second d e r i v a t i v e i s ( s e e A l l e n , 1 9 6 5 , 337-8) d2w d s ' _/dw dNEB=0 dNEB=0 i f z i D / f i - e ' - ' 1 ' ^ ) ) ] - , -(12) whose s i g n i s ambiguous because the s i g n o f t h e f i r s t d e r i v a t i v e i s am-b i g u o u s . I f t h e f i r s t d e r i v a t i v e i s p o s i t i v e , the second d e r i v a t i v e w i l l be p o s i t i v e f o r r e a l i s t i c s t r i k e l e n g t h s (s< I ) , and b b v e r s e l y . I s o - n e t economic b e n e f i t f u n c t i o n s a r e d e p i c t e d i n F i g u r e s 1 and 2 as h a v i n g a p o s i t i v e s l o p e and as b e i n g convex from b e l o w . How-e v e r , t h e y c o u l d be concave from below and i t would not a f f e c t our 36 a n a l y s i s . F o r our a n a l y s i s , t h e most i m p o r t a n t f e a t u r e o f the i s o -net economic b e n e f i t f u n c t i o n s i s t h a t they a r e e x p e c t e d to have a p o s i t i v e s l o p e . The union " r u i n a t i o n c u r v e , " N E B Q c , c o n s t r a i n s t h e u n i o n d u r i n g n e g o t i a t i o n s . N E B Q C i s the i s o - n e t economic b e n e f i t c u r v e NEBn Oc I (w-w ) = 0 0 r N E B Q c , as w e l l as, the r e s t o f the N E B f u n c t i o n , w i l l r o t a t e c o u n t e r -c l o c k w i s e about the wage a x i s as time p a s s e s , because o f the f i x e d r e t i r e m e n t d a t e , I. (See e q u a t i o n s ( 8 ) , ( 9 ) , ( 1 0 ) , and (11) a b o v e . ) However, t h i s r o t a t i o n w i l l be i g n o r e d b e l o w , s i n c e i t i s an i n f e s t i s -s i m a l r o t a t i o n . I t i s noteworthy t h a t t h e NEB f u n c t i o n , i n c l u d i n g t h e u n i o n ' s r u i n a t i o n c u r v e , w i l l s h i f t i n r e s p o n s e t o changes i n t h e f i r m ' s l a t e s t wage o f f e r , w^. Each time t h e f i r m i n c r e a s e s ( d e c r e a s e s ) i t s wage o f f e r , w^r, the o p p o r t u n i t y c o s t s o f t h e s t r i k e t o the u n i o n , w . e " r t d t , J 0 T w i l l i n c r e a s e ( d e c r e a s e ) fan any positive. &&Uke. dutoution. . NEB ( i n -c l u d i n g N E B Q c ) , c o n s e q u e n t l y , w i l l d e c r e a s e ( i n c r e a s e ) i n v a l u e a t each s t r i k e - w a g e c o m b i n a t i o n , ( s , w ) , where the s t r i k e l e n g t h i s p o s i t i v e ( i . e . , s > 0 ) . S i m p l y p u t , a h i g h e r wage r a t e w i l l be r e q u i r e d a t any g i v e n s t r i k e l e n g t h , i n o r d e r t o o f f s e t the i n c r e a s e i n o p p o r t u n i t y c o s t s t h a t i s a s s o c i a t e d w i t h t h e i n c r e a s e i n w^, and o b v e r s e l y . By c o n t r a s t , t h e f i r m ' s NW f u n c t i o n ( a n d , i n t u r n , NWQ c ) i s i n v a r i a n t w i t h r e s p e c t t o changes i n the u n i o n ' s l a t e s t wage o f f e r ; w u . (Compare 37 e q u a t i o n s (1) and (8) a b o v e . ) 1 5 The p o s t - s t r i k e f i n a n c i a l s t r e s s and s t r i k e pay f u n c t i o n s w i l l d i f f e r from t h e i r p r e - s t r i k e c o u n t e r p a r t s . The reasons f o r t h i s a r e t h e same as t h o s e f o r t h e NW f u n c t i o n , as e x p l a i n e d above. The p o s t - s t r i k e u n i o n f i n a n c i a l s t r e s s and s t r i k e pay f u n c t i o n s w i l l be t s .._ f s 0 G ( s ) = g e _ 1 t d t + g e J l t d t ; g > 0 and g ' = 0 0 r ( m " S ) . _ i t SP = I he 1 T ; d t ; h > 0 and h' = 0 J 0 f o r s > ( m - i ) where m > 0 = 0 f o r s > ( m - i ) where m > 0 , \ and where s i s the s t r i k e d u r a t i o n to d a t e . I f f (h) i s p o s i t i v e , then NEB ( t h e k i n k s i n NEB a t ( m - s ) ) w i l l s h i f t l e f t w a r d s d u r i n g p o s t -s t r i k e n e g o t i a t i o n s w h i l e t h e s t r i k e t a k e s p l a c e ( i . e . , as s i n c r e a s e s ) . A l t e r n a t i v e l y , t h e wage a x i s w i l l move eastwards i n F i g u r e 1 as s • i n c r e a s e s . 2 . 4 F e a t u r e s o f the Two O b j e c t i v e F u n c t i o n s The p a r t i e s ' o b j e c t i v e f u n c t i o n s r e f l e c t s e v e r a l o f the f e a t u r e s o f a c t u a l " d i s t r i b u t i v e b a r g a i n i n g , " as Walton and M c K e r s i e term i t (1964, 4 ) . F i r s t , t h e wage o b j e c t i v e s o f l a b o u r and management do c o n f l i c t . The u n i o n d e r i v e s i n c r e a s e d b e n e f i t s from h i g h e r wage o f f e r s , czn£ejva> paA^LbuA , and o b v e r s e l y f o r the employer (see (5) and ( 1 1 ) ) . S e c o n d , both the u n i o n and t h e employer w i l l i n c u r h i g h e r 15 The u n i o n ' s l a t e s t wage o f f e r , w , i f c o s t e d i n ( 1 ) , washes o u t . (See Appendix A , 198 , E q u a t i o n (12) and s u b s t i t u t e wu f o r w m -) 38 a pfvlohsl c o s t s the l o n g e r t h e work stoppage l a s t s , e v e r y t h i n g e l s e the same. T h i r d , the o p p o r t u n i t y c o s t o f a work stoppage t o t h e f i r m need n o t - - a n d p r o b a b l y w i l l n o t — e q u a l t h e o p p o r t u n i t y c o s t o f a work stoppage t o the u n i o n (compare e q u a t i o n s (1) and ( 8 ) ) . F o u r t h , b a r -g a i n e r s a r e c o n f r o n t e d w i t h the p o s s i b i l i t y o f r u i n a t i o n d u r i n g n e -g o t i a t i o n s . 2 . 5 F e a s i b l e S e t s There a r e two k i n d s o f p o s s i b l e outcomes t o n e g o t i a t i o n s : (1) a c o l l e c t i v e agreement i s n e g o t i a t e d (and the b a r g a i n i n g r e l a t i o n -s h i p i s not s e v e r e d ) o r (2) e i t h e r l a b o u r o r l a b o u r and management end up i n r u i n a t i o n (and the b a r g a i n i n g r e l a t i o n s h i p i s s e v e r e d ) . The n e g o t i a t i o n o f a c o l l e c t i v e agreement may o r may not be accompanied by s t r i k e a c t i o n . I f the f i r m f e l l i n t o r u i n a t i o n i t c l e a r l y would drag the u n i o n a l o n g w i t h i t . However, s h o u l d t h e u n i o n abandon a s t r i k e , t h e r e b y a t t a i n i n g r u i n a t i o n , the f i r m need not j o i n i t i n r u i n a t i o n . The f i r m c o u l d h i r e r e p l a c e m e n t s f o r the employees who s t r u c k . The s e t o f s t r i k e - w a g e c o m b i n a t i o n s which c o r r e s p o n d t o the two k i n d s o f p o s s i b l e outcomes w i l l be termed the " f e a s i b l e s e t . " The p r o b a b i l i t y t h a t n e g o t i a t i o n s w i l l r e s u l t i n s t r i k e - w a g e c o m b i n a -t i o n s w h i c h a r e not i n c l u d e d i n t h e f e a s i b l e s e t c l e a r l y i s z e r o . The bounds o f the u n i o n and f i r m f e a s i b l e s e t s i n c l u d e segments o f the wage a x i s and t h e f i r m r u i n a t i o n c u r v e , f o r o b v i o u s r e a s o n s . (See F i g u r e 3 . ) They a l s o i n c l u d e segments o f two r a y s , c a l l e d S and W c s > The r a y , S , p a r a l l e l s t h e wage a x i s a t a d i s t a n c e s m from i t . The s t r i k e l e n g t h , s , i s the maximum l e n g t h o f s t r i k e ; i t o c c u r s where the u n i o n and f i r m r u i n a t i o n c u r v e s i n t e r j e c t . (See F i g u r e 3 . ) S t r i k e l e n g t h s g r e a t e r \\\\\ = non-severance region = severance region w wage offer (or proposed wage settlement) s = strike length s m = maximum strike length w r f = firm's reservation wage w r = union's reservation wage w c s = wage rate prevailing in competitive sector of the economy N W 0 c = union's ruination curve NVVQC = firm's ruination curve Figure 3 The Actual Feasible Set 40 than s a r e not f e a s i b l e , f o r t h e u n i o n (but not n e c e s s a r i l y t h e f i r m ) m w i l l have m i g r a t e d . The ray W c s , p a r a l l e l s the s t r i k e a x i s and i t c o r r e s p o n d s t o t h e wage r a t e , w c s , which i s the wage r a t e t h a t p r e v a i l s i n t h e c o m p e t i t i v e s e c t o r o f the economy. (See F i g u r e 3 . ) Wage s e t t l e -ments l e s s than w „ a r e not f e a s i b l e , s i n c e the f i r m would l o s e i t s work c s f o r c e a t such a wage r a t e . The u n i o n ' s r u i n a t i o n c u r v e c u t s t h e f e a s i b l e s e t i n t o two s e t s . E x c l u d i n g t h e f i r m ' s r u i n a t i o n c u r v e , the s u b s e t o f the f e a s i b l e s e t t h a t l i e s above (below) t h e u n i o n ' s r u i n a t i o n c u r v e c o n s i s t s o f " n o n -s e v e r a n c e " ( " s e v e r a n c e " ) outcomes t o c o l l e c t i v e b a r g a i n i n g . (See F i g u r e 3 . ) " N o n - s e v e r a n c e " outcomes a r e , o f c o u r s e , t h o s e outcomes where a l a b o u r c o n t r a c t i s n e g o t i a t e d ; w h e r e a s , the " s e v e r a n c e " outcomes a r e t h o s e outcomes (1) where both t h e u n i o n and f i r m a t t a i n r u i n a t i o n o r (2) where t h e u n i o n i s broken and r e p l a c e d by u n o r g a n i z e d e m p l o y e e s . The s e v e r a n c e r e g i o n i n c l u d e s the segment o f the f i r m ' s r u i n a t i o n c u r v e t h a t bounds the f e a s i b l e s e t . I t a l s o i n c l u d e s t h e r e g i o n t h a t i s c r o s s -hatched i n F i g u r e 3 . C o n f r o n t e d w i t h u n c e r t a i n t y , each b a r g a i n e r w i l l e s t i m a t e the f e a s i b l e s e t and the n o n - s e v e r a n c e and s e v e r a n c e s u b s e t s t h e r e o f . That i s , each b a r g a i n e r w i l l e s t i m a t e h i s own, as w e l l as h i s a d v e r -s a r y ' s r u i n a t i o n c u r v e . The own and the a d v e r s a r y ' s e s t i m a t e s c l e a r l y need not c o i n c i d e . F u r t h e r m o r e , i t i s assumed t h a t each b a r g a i n e r w i l l o v e r e s t i m a t e the f e a s i b l e s e t , i n o r d e r t h a t h i s ^ e s t i m a t e o f the f e a s i b l e s e t i n c l u d e s a l l p o s s i b l e outcomes t o n e g o t i a t i o n s . T h u s , each b a r g a i n e r ' s e s t i m a t e o f t h e f e a s i b l e s e t w i l l c o n t a i n the a c t u a l f e a s i b l e 41 s e t (which i s d e p i c t e d i n F i g u r e 3 ) . B a r g a i n e r s i n t h e c u r r e n t t h e o r y w i l l pursue s t r a t e g i e s which a r e aimed a t a l t e r i n g t h e i r o p p o n e n t s ' p e r c e p t i o n s o f t h e i r r u i n a t i o n c u r v e s . For i n s t a n c e , the f i r m w i l l " b u r y i t s r e n t s , " as assumed a b o v e , and d i s g u i s e i t s t r u e p r o f i t p o s i t i o n d u r i n g n e g o t i a t i o n s . I t w i l l pursue t h i s s t r a t e g y i n an a t t em pt a t c o n v i n c i n g t h e u n i o n t h a t i t s r u i n a t i o n c u r v e l i e s t o the l e f t o f the u n i o n ' s e s t i m a t e . S i m p l y p u t , i t w i l l pursue t h i s s t r a t e g y so t h a t t h e u n i o n w i l l u n d e r e s t i m a t e t h e f i r m ' s " a b i l i t y t o p a y . " (The f i r m ' s " a b i l i t y t o pay" i s the v a l u e o f t h e f i r m ' s net worth f u n c t i o n e v a l u a t e d a t a s t r i k e o f z e r o d u r a -17 t i o n and t h e u n i o n ' s r e s e r v a t i o n wage ( i . e . , a t ( 0 , w r ) . ) 2 . 6 The S u b j e c t i v e J o i n t P r o b a b i l i t y D e n s i t y F u n c t i o n s D e c i s i o n - m a k e r s i n the c u r r e n t t h e o r y w i l l a s s i g n non-n e g a t i v e s u b j e c t i v e p r o b a b i l i t i e s t o t h o s e v a l u e s o f the two random v a r i a b l e s , s and w, t h a t l i e i n the f e a s i b l e s e t s they e s t i m a t e d . The s u b j e c t i v e j o i n t p r o b a b i l i t y d e n s i t y f u n c t i o n s w i l l be c a l l e d P n u ( s , w w and P n f ( s , w , | w , , ) , where u s t a n d s f o r the u n i o n and f f o r t h e f i r m and u where u i s a c o u n t e r v a r i a b l e as e x p l a i n e d b e l o w . The u n i o n and the f i r m p . d . f . s r e s p e c t i v e l y a r e c o n d i t i o n a l upon the f i r m ' s l a t e s t wage o f f e r (w^) and t h e u n i o n ' s l a t e s t wage o f f e r ( w u ) . One s i d e ' s wage o f f e r r e f l e c t s i t s b a r g a i n i n g s t r a t e g y a n d , t h e r e f o r e , s h o u l d cause the o t h e r s i d e to r e v i s e i t s p . d . f . The c h i e f n e g o t i a t o r s f o r the u n i o n 17 In o t h e r w o r d s , the f i r m ' s " a b i l i t y t o pay" i s the d i f -f e r e n c e i n net worth between the b e s t p o s s i b l e outcome f o r t h e f i r m , t h a t i t pay union members t h e i r r e s e r v a t i o n wages, and the w o r s t p o s -s i b l e outcome f o r the f i r m , r u i n a t i o n . But the net worth f u n c t i o n t a k e s on a z e r o v a l u e a t r u i n a t i o n . 42 and f i r m e s t i m a t e P n u ( s , w , | w ^ ) and P n ^ ( s , w | w u ) (as w e l l as NW(s,w) and N E B ( s , w ) ) . The p . d . f . s a r e the c h i e f n e g o t i a t o r s ' e s t i m a t e s o f the p r o b a b i l i t y t h a t the f i n a l outcomes o f n e g o t i a t i o n s w i l l be any g i v e n s t r i k e - w a g e c o m b i n a t i o n ( s , w ) ? ^ The v a r i a b l e , n , i s i n t e n d e d t o c a p t u r e the s e q u e n t i a l n a t u r e o f c o l l e c t i v e b a r g a i n i n g , i n a d d i t i o n t o t h e f a c t t h a t t h e c h i e f n e g o t i a t o r s p r o b a b l y w i l l r e v i s e t h e i r Mibjzctivz. p . d . f . s i n the c o u r s e o f n e g o t i a t i o n s . They w i l l r e v i s e t h e i r p . d . f . s i n t h e l i g h t o f new i n f o r m a t i o n t h a t i s exchanged a t the b a r g a i n i n g t a b l e a n d , p a r t i c u l a r l y , i n response t o the o t h e r s i d e ' s l a t e s t wage o f f e r , as noted above. The v a r i a b l e n c o u n t s t h e s e s i t u a t i o n s as " d e c i s i o n p o i n t s " - - t h a t i s , p o i n t s i n time a t which t h e c h i e f n e g o t i a t o r f o r the f i r m o r u n i o n makes an o f f e r o r r e v i s e s h i s p . d . f . The c o u n t e r , n , i s s e t a t z e r o when n e -g o t i a t i o n s commence and i n c r e a s e s by a v a l u e o f one f o r each s u c c e s s i v e d e c i s i o n p o i n t . I t i s e x p e c t e d t h a t t h e r e w i l l be a d i s c o n t i n u i t y i n t h e u n i o n and f i r m p . d . f . s and t h a t t h i s d i s c o n t i n u i t y w i l l o c c u r a l o n g 18 t h e wage a x i s f o r both p . d . f . s ^ , as e x p l a i n e d b e l o w . In p a r t i c u l a r , 1 7 The j o i n t p . d . f . s can be r e g a r d e d as t h e c h i e f n e g o t i a t o r s ' e s t i m a t e s o f t h e " t r u e " p . d . f . , P n ( s , w ) , w h i c h g i v e s t h e t r u e p r o b a b i l i t y t h a t ( s , w ) w i l l be the f i n a l outcome t o n e g o t i a t i o n s . The two s u b j e c t i v e p . d . f . s , d i f f e r from the t r u e p . d . f . because t h e i n v o l v e t h e c h i e f n e g o t i -a t o r s ' p e r c e p t i o n s o f t h e t r u e p . d . f . 18 In o t h e r w o r d s , Lim p , , ( s , w , w J t P n , , ( 0 , w . w J s+0 nu T » t and Lim p n f ( s , w ) w u ) f P n f ( 0 > w w,,) s + 0 " f U 43 t h e p r o b a b i l i t y t h a t t h e r e w i l l be n o - s t r i k e s e t t l e m e n t s ( i . e . , s e t t l e -ments a l o n g the wage a x i s ) s h o u l d be q u i t e h i g h ( e . g . , 8 0 % ) ; w h e r e a s , t h e p r o b a b i l i t y t h a t t h e r e w i l l be s t r i k e s o f v e r y , v e r y s h o r t d u r a t i o n , s h o u l d be v i r t u a l l y z e r o . (See F i g u r e 4 . ) A s p e c i a l k i n d o f p . d . f . i s r e q u i r e d i n o r d e r to c a p t u r e r e a l i s t i c a l l y the e x p e c t e d d i s c o n t i n u -i t y . The u n i o n and f i r m p . d . f . s w i l l be composed o f two p a r t s . One i s a " s i n g u l a r " p . d . f . ; the o t h e r i s c o n t i n u o u s . The s i n g u l a r p . d . f . l i e s a l o n g the wage a x i s , w h i l e the c o n t i n u o u s p . d . f . l i e s w i t h i n t h e f e a s i b l e s e t a n d , more i m p o r t a n t l y , o v e r the r e g i o n o f the f i r s t q u a d -r a n t o f S x W where s t r i k e l e n g t h s a r e po-ittlve.. The s i n g u l a r p . d . f . i s s i n g u l a r i n t h a t poiUUvo. p r o b a b i l i t y i s c o n c e n t r a t e d a l o n g t h e wage a x i s . (See F i g u r e 4 . ) A l t e r n a t i v e l y , t h e s i n g u l a r p . d . f . c o r r e s -ponds t o t h e "atom o f p r o b a b i l i t y " which i s a t z e r o o f t h e m a r g i n a l 19 p . d . f . .of s t r i k e . (See F i g u r e 4 . ) As compared w i t h t h e s i n g u l a r - c o n t i n u o u s p . d . f . , a p . d . f . t h a t i s c o n t i n u o u s everywhere y i e l d s l e s s r e a l i s t i c r e s u l t s . For i n -s t a n c e , the p r o b a b i l i t y o f s e t t l i n g w i t h o u t a s t r i k e i s , 19 20, S e e , f o r e x a m p l e , F e l l e r , 1966, 136-140. The u n i o n and f i r m p . d . f . s w i l l be denoted as f o l l o w s o v e r t h e p o s i t i v e s t r i k e l e n g t h r e g i o n o f the f e a s i b l e s e t : P n u ( w , s s > 0) and P n f ( w , s s > 0) Pn (s, w) 1.0 atom of probability Discontinuous True Marginal p.d.f. of Strike L e g e n d : p n (s, w) = true probability density function p n (s, w) = true marginal probability density function of strike = concentration of probability of p n ( s , w) on the wage axis Pn (s. w) Continuous True Marginal p.d.f. of Strike s m = maximum length of strike s = strike length IT = a very, very small positive number Figure 4 A Comparison of True Marginal p.d.f.s. of Strike for the Discontinuous and Continuous Joint p.d.f.s. 45 s t r i c t l y s p e a k i n g , z e r o . ' 1 1 However, i t i s p o s s i b l e t o r e d e f i n e the p r o -b a b i l i t y o f s e t t l i n g w i t h o u t a s t r i k e , so t h a t i t was c a l c u l a t e d o v e r an a r e a o f e w i d t h from t h e wage a x i s (where e i s a v e r y , v e r y s m a l l p o s i t i v e number). But t h i s , i n t u r n , would mean t h a t the p r o b a b i l i t y t h a t s t r i k e s w i l l have v e r y , v e r y s h o r t d u r a t i o n w i l l be much h i g h e r than seems p l a u s i b l e . (See F i g u r e 4 . ) 2 . 7 The B a s i c Shapes o f t h e p . d . f . s The b a s i c shapes o f the p . d . f . s depend upon e n v i r o n m e n t a l f a c t o r s , such as the l e g i s l a t i v e framework which governs c o l l e c t i v e b a r -g a i n i n g and c e r t a i n economic o r s o c i o - e c o n o m i c v a r i a b l e s which i n f l u e n c e the c o l l e c t i v e b a r g a i n i n g p r o c e s s . However, s i n c e t h e s e exogenous f a c -t o r s g e n e r a l l y a r e c o n s t a n t d u r i n g any g i v e n round o f n e g o t i a t i o n s , they w i l l be h e l d c o n s t a n t f o r now. The economic and s o c i o - e c o n o m i c v a r i a b l e s , i n p a r t i c u l a r , w i l l be v a r i e d , however, when the " d e t e r m i -n a n t s " o f s t r i k e a c t i v i t y a r e e x p l a i n e d b e l o w . Casual e m p i r i c i s m s u g g e s t s t h a t much o f the f i r m and u n i o n p r o b a b i l i t y d i s t r i b u t i o n s ( e . g . , 70-90%) w i l l be a s s o c i a t e d w i t h t h e s i n g u l a r d i s t r i b u t i o n ( i . e . , w i l l l i e above the wage a x i s ) . T y p i c a l l y , some 90 p e r c e n t o f a l l c o n t r a c t s e t t l e m e n t s d i d not i n v o l v e s t r i k e 22 a c t i o n . However, the p e r c e n t a g e o f each p r o b a b i l i t y d i s t r i b u t i o n 21 Each p o i n t i n a c o n t i n u o u s p . d . f . has a z e r o v a l u e . P r o -b a b i l i t i e s a r e c a l c u l a t e d o v e r a r e a s , be they l a r g e o r s m a l l , o f the S x W p l a n e , i f t h e p . d . f . i s c o n t i n u o u s . The p r o b a b i l i t y t h a t t h e r e w i l l be a s t r i k e o f z e r o d u r a t i o n i s c a l c u l a t e d as the l i n e i n t e g r a l t h a t f o l l o w s : p n u < s - ° > P « u < ° ' « > d w and w f P n f ( S = 0 ) = / r t p n f ( 0 , w ) dw. 22 S e e , f o r e x a m p l e , Woods eX cut., 1968, 122. 46 t h a t i s a s s i g n e d t o the wage a x i s p r o b a b l y w i l l change d u r i n g n e g o t i a -t i o n s . F o r i n s t a n c e , the c h i e f n e g o t i a t o r s f o r t h e u n i o n and f i r m might a s s i g n r e l a t i v e l y more p r o b a b i l i t y t o the wage a x i s when n e g o t i -a t i o n s commence than l a t e r on d u r i n g n e g o t i a t i o n s , because t h e y b e -come l e s s c o n f i d e n t o f s e t t l i n g w i t h o u t a s t r i k e as t h e s t r i k e d e a d -l i n e becomes more i m m i n e n t . Casual e m p i r i c i s m a l s o s u g g e s t s (1) t h a t r e l a t i v e l y l i t t l e p r o b a b i l i t y ( e . g . , l e s s than 15%) w i l l be a s s i g n e d t o s e v e r a n c e , as opposed t o n o n - s e v e r a n c e , outcomes t o n e g o t i a t i o n s and (2) t h a t r e l a t i v e -l y more p r o b a b i l i t y w i l l be a s s o c i a t e d w i t h s e v e r a n c e outcomes when n e g o t i a t i o n s a r e f i r s t agreement, as opposed t o c o n t r a c t r e n e w a l , n e -g o t i a t i o n s . For o n e , l a b o u r and management a r e b e t t e r o f f i n t h e n o n -s e v e r a n c e r e g i o n than i f they both i n c u r r e d r u i n a t i o n . F o r a n o t h e r , g e n e r a l l a b o u r r e l a t i o n s laws t e n d t o impede l a b o u r and management from s e t t l i n g w i t h i n t h e s e v e r a n c e r e g i o n o f the f e a s i b l e s e t , t o the e x t e n t t h a t they s a n c t i o n , r e g u l a t e and promote c o l l e c t i v e b a r g a i n i n g , as e x -p l a i n e d a b o v e . M o r e o v e r , t h e s e l a b o u r s t a t u t e s p r o v i d e f o r d e c e r t i f i c a -t i o n , which i s a means whereby a u n i o n can s e v e r a b a r g a i n i n g r e l a t i o n -23 s h i p i n l i e u , o f s t r i k e a c t i o n . N e v e r t h e l e s s , r u i n a t i o n does o c c u r . S t r i k e d a t a f o r B r i t i s h Columbia i n d i c a t e , f o r e x a m p l e , t h a t l e s s than t e n p e r c e n t o f a l l i n t e r e s t d i s p u t e s from 1945 through 1975 c o n c l u d e d A u n i o n w i l l be d e c e r t i f i e d i f a m a j o r i t y o f the employees i n t h e a p p r o p r i a t e b a r g a i n i n g u n i t v o t e a g a i n s t f u r t h e r u n i o n r e p r e -s e n t a t i o n d u r i n g a r e p r e s e n t a t i o n v o t e t h a t they p e t i t i o n e d the a p p r o -p r i a t e l a b o u r r e l a t i o n s board t o h o l d . 47 24 i n r u i n a t i o n . (See T a b l e 8 b e l o w . ) The 1945-75 B . C . s t r i k e d a t a a l s o r e v e a l t h a t about n i n e p e r c e n t o f a l l f i r s t agreement s t r i k e s , c o n c l u d e d i n r u i n a t o n (see T a b l e 8 ) . A m i t i g a t i n g f a c t o r here i s the p r o v i s i o n f o r f i r s t ! a g r e e m e n t a r b i t r a t i o n , ' w h i c h a few Canadian j u r i s -25 d i c t i o n s adopted d u r i n g t h e m i d - 1 9 7 0 s . G i v e n such an a l l o c a t i o n o f c u m u l a t i v e p r o b a b i l i t i e s , we s h a l l m o t i v a t e t h e shapes o f the u n i o n and f i r m p . d . f . s . t h r o u g h a p a r t i a l a n a l y s i s which f o c u s s e s on two s e t s o f c r o s s - s e c t i o n s o f t h e p . d . f . s . One s e t o f c r o s s - s e c t i o n s p a r a l l e l s o r c u t s t h r o u g h t h e wage a x i s and c o n s i s t s o f the u n i o n and f i r m c o n d i t i o n a l p . d . f . s , { P n u ( w j s ; w f ) } - - a n d ' ( P f ( w s ;w , ) } » r e s p e c t i v e l y . I t w i l l be used t o a n a l y z e f a c t o r s t h a t i n f l u e n c e wage d e t e r m i n a t i o n . The o t h e r s e t o f c r o s s - s e c t i o n s p a r a l l e l s t h e s t r i k e a x i s and i s c o m p r i s e d o f t h e c o n d i t i o n a l p . , d . f . s , { P n L | ( s | w , w f ) } and { P n f ( s w ; w y ) } . I t w i l l be used t o a n a l y z e f a c t o r s t h a t i n f l u e n c e the l e n g t h . o f s t r i k e s . 24 " R u i n a t i o n " i n c l u d e s t h e f o l l o w i n g t y p e s o f d i s p u t e r e s o -l u t i o n : "Union abandoned s t r i k e , " "employment c o n d i t i o n s s t a t e d no . l o n g e r a f f e c t e d ( s t r i k e r s r e p l a c e d ) " and " o p e r a t i o n s r e p o r t e d c l o s e d . " The f i g u r e s p r e s e n t e d above u n d e r e s t i m a t e t h e p r o b a b i l i t y t h a t f i r s t agreement and c o n t r a c t renewal s t r i k e s w i l l t e r m i n a t e i n r u i n a t i o n , s i n c e many modes o f s e t t l e m e n t were " n o t r e p o r t e d . " I t i s my b e l i e f t h a t t h e d a t a c o n c e r n i n g the i n c i d e n c e o f r u i n a t i o n a r e f a i r l y a c c u r a t e , s i n c e r u i n a t i o n i s such a r a r e and d r a m a t i c e v e n t . Newspapers which c o n s t i t u t e d an i m p o r t a n t s o u r c e o f i n f o r m a t i o n c o n c e r n i n g modes o f s e t t l e m e n t , u n d o u b t e d l y c o v e r e d such s e n s a t i o n a l i s t i c e v e n t s . 25 F i r s t agreement a r b i t r a t i o n i s a r e m e d i a l a c t i o n which some Canadian l a b o u r r e l a t i o n s boards can t a k e a g a i n s t b a r g a i n i n g i n "bad f a i t h . " I t c l e a r l y reduces e m p l o y e r s ' a b i l i t y t o d r i v e a newly c e r t i f i e d u n i o n i n t o r u i n a t i o n d u r i n g f i r s t agreement n e g o t i a t i o n s , but i s not u n i v e r s a l l y a p p l i e d t o f i r s t agreement d i s p u t e s . I n c i d e n t a l l y , B r i t i s h Columbia was t h e f i r s t j u r i s d i c t i o n i n North A m e r i c a t o p r o v i d e f o r f i r s t agreement a r b i t r a t i o n (see Appendix B , 2 3 8 - 2 3 9 . ) 48 The two s e t s o f c r o s s - s e c t i o n s w i l l be combined t o g e n e r a t e the shapes o f t h e u n i o n and f i r m p . d . f . s . S i g n i f i c a n t l y , t h e r e a r e d i f f e r e n c e s as t o the f a c t o r s t h a t i n f l u e n c e wage s e t t l e m e n t s and s t r i k e l e n g t h s w i t h -i n the s e v e r a n c e r e g i o n s , as opposed t o t h e n o n - s e v e r a n c e r e g i o n s , o f the f e a s i b l e s e t s . Two f a c t o r s p r i m a r i l y a r e e x p e c t e d t o d e t e r m i n e the shapes o f t h e u n i o n and f i r m p . d . f . s . o v e r the invznan.cz r e g i o n o f t h e u n i o n and f i r m f e a s i b l e s e t s . One f a c t o r i s t h a t the l o n g e r the s t r i k e l a s t s , t h e g r e a t e r w i l l be t h e (a phloni) c o s t s t o l a b o u r and mangement a n d , i n t u r n , t h e s m a l l e r w i l l be t h e n e t g a i n s t h a t the f i r m and u n i o n can 26 a c h i e v e from r e s i s t i n g r u i n a t i o n (by a l l o w i n g t h e s t r i k e t o c o n t i n u e ) . T h i s f a c t o r s h o u l d mean t h a t , in tnacJjiQ along the union• on. .^ihm nz-&ti>tanc<i CUJWZA, P „ , , ( s , w , |w^) and P n ^ ( s , w | w u ) w i l l r i s e as s i n c r e a s e s . nu (See F i g u r e 5 . ) F u r t h e r m o r e , the c o n d i t i o n a l p . d . f . s , ' {P ( s , w j w ^ ) } and {P n ^.(s,w | w u ) } , s h o u l d be m o n o t o n i c a l l y i n c r e a s i n g f u n c t i o n s , and they s h o u l d be u n i m o d a l , h a v i n g a mode near the maximum s t r i k e l e n g t h , 27 s m . (See F i g u r e 5;.;) The o t h e r f a c t o r i s t h a t i f the f i r m succeeded i n b r e a k i n g t h e u n i o n and sought t o h i r e a n o n - u n i o n i z e d w o r k f o r c e , i t would have t o pay wages i n e x c e s s o f t h o s e p a i d i n the c o m p e t i t i v e s e c t o r o f t h e economy. T h i s i s i n t e r p r e t e d t o i m p l y t h a t each P n u ( w s;w^) and P n f ( w s ; w u ) w i l l be u n i m o d a l , h a v i n g a mode a t t h e wage r a t e t h a t t h e N o n e t h e l e s s , both t h e u n i o n and f i r m would a c h i e v e a p o s i -t i v e net g a i n , as compared w i t h r u i n a t i o n , i f the f i n a l outcome t o n e g o t i -a t i o n s were i n the n o n - s e v e r a n c e r e g i o n s o f the u n i o n and f i r m f e a s i b l e s e t s . 27 The mode i s nzax s m , s i n c e the u n i o n and f i r m o v e r - e s t i m a t e the bounds o f the f e a s i b l e s e t , as e x p l a i n e d a b o v e . 0 L e g e n d : w = wage Wrf = firm's reservation wage w r = union's reservation wage w a = w a g e rate for attracting a non-union workforce w c s = w a g e rate that prevails in the competitive s e c t o r of the labour market Pn (s, w) N W 0 C NEBQC strike length maximum strike length true probability of settlement of (s, w) firm's ruination curve union's ruination curve Figure 5 True Probabilities of Settling in the Severance Region of the Feasible Set V 50 f i r m c o n s i d e r s n e c e s s a r y t o a t t r a c t a n o n - u n i o n i z e d w o r k f o r c e , w . a (See F i g u r e 5 . ) Combining t h e s e f a c t o r s (and the c o r r e s p o n d i n g c r o s s -s e c t i o n s ) r e s u l t s i n the shape o f t h e u n i o n o r f i r m p . d . f . d e p i c t e d i n F i g u r e 4 . I t r e s u l t s , i n p a r t i c u l a r , i n a " r i d g e o f wage modes" which i s a s s o c i a t e d w i t h w . which runs from West t o E a s t and w h i c h a t t a i n s a a peak near ( s m , w j . (See F i g u r e 5 . ) in a The u n i o n and f i r m p . d . f . s a r e e x p e c t e d t o have a s o -c a l l e d r i d g e o f wage modes o v e r the nori-AzveJiancd r e g i o n s o f t h e u n i o n and f i r m f e a s i b l e s e t s , as w e l l . T h e i r modes a r e e x p e c t e d t o l i e some-where o v e r t h e range o f r e c e n t l y n e g o t i a t e d comparable wage s e t t l e m e n t s (RNCWS) and t o extend b a s i c a l l y from West t o E a s t o v e r the n o n - s e v e r a n c e 28 I r e g i o n . (See F i g u r e 6.) The modes o f { P n u ( w . s ; w f ) } and' {P ^ ( w | s ; w , , ) } u w i l l be a s s o c i a t e d w i t h t h e range o f RNCWS f o r s e v e r a l r e a s o n s . F i r s t , the f i r m and u n i o n w i l l t a k e n o t i c e o f RNCWS due t o l a b o u r market compe-t i t i o n . The f i r m w i l l seek t o r e v i s e i t s wage s t r u c t u r e i n a c c o r d a n c e w i t h RNCWS, i f i t seeks (1) t o r e c r u i t o r r e t a i n a r e l i a b l e w o r k f o r c e and (2) t o a v o i d e n g e n d e r i n g poor employee m o r a l e , t h e r e b y i n c u r r i n g a d e c l i n e i n p r o d u c t i v i t y . Union members w i l l pay heed t o RNCWS as a p a r t o f t h e i r j o b s e a r c h . a c t i v i t i e s . M o r e o v e r , RNCWS e s t a b l i s h a t a r g e t range o f s e t t l e m e n t s w h i c h u n i o n members w i l l s t r i v e t o a c h i e v e , i f 28 RNCWS a r e comparable i n the sense t h a t t h e y i n v o l v e " j o b c o n t e n t s " s i m i l a r t o the f i r m ' s o r t h a t they c o v e r employees i n t h e same l a b o u r market as the f i r m ' s e m p l o y e e s . RNCWS.also a r e termed " i n d u s t r y s t a n d a r d s , " even though they do not n e c e s s a r i l y e s t a b l i s h c l e a r - c u t s t a n d a r d s . That t h e r e w i l l be a d i s p e r s i o n o f RNCWS was e x p l a i n e d above. Firm's Joint Subjective p.d.f. L e g e n d : w = wage offer (or potential settlement) Wrf = firm's reservation wage w r = union's reservation wage w m : n u = mode of wage c r o s s - s e c t i o n s of union's joint p.d.f. w m:nf = mode of wage c r o s s - s e c t i o n s of firm's joint p.d.f. s = strike length Union's Joint Subjective p.d.f. NEBQC = union's ruination curve NWQC = firm's ruination curve pnf (s, w) = firm's joint subjective p.d.f. p n u (s, w) = union's joint subjective p.d.f. R N C W S = recently negotiated comparable wage settlements Figure 6 Wage Cross-Sections of the Union and Firm Joint Subjective p.d.f.s. 52 29 n o t improve u p o n , t h r o u g h c o l l e c t i v e b a r g a i n i n g . A b s t r a c t i n g from i n f l u e n c e s o t h e r than l a b o u r market c o m p e t i t i o n and g o a l - s e t t i n g b e -h a v i o u r , RNCWS, t h e r e f o r e , seem t o be more l i k e l y wage s e t t l e m e n t s than do o t h e r f e a s i b l e wage s e t t l e m e n t s . B a r r i n g e x t r a o r d i n a r y c i r c u m s t a n c e s , such as t h e f i r m ' s b e i n g on the b r i n k o f r u i n a t i o n , r e l a t i v e l y low p r o b a b i l i t i e s s h o u l d be a s s o c i a t e d w i t h t h o s e outcomes t h a t i n v o l v e r u i n a t i o n o r near r u i n a t i o n . B a r g a i n e r s presumably w i l l s t r o n g l y r e s i s t r u i n a t i o n o r n e a r - r u i n a t i o n wage s e t t l e m e n t s , p r e f e r r i n g , f o r e x a m p l e , t o i n c u r ( o r t o c o n t i n u e t o i n c u r ) s t r i k e a c t i o n . S t r i k e a c t i o n ( o r the c o n -t i n u a n c e t h e r e o f ) p r e s e n t s the p r o s p e c t o f n o n - s e v e r a n c e s e t t l e m e n t s w h i c h would c o n f e r on t h e b a r g a i n e r t h r e a t e n e d w i t h r u i n a t i o n n e t -r e t u r n s which exceed t h e n e t - r e t u r n s o f r u i n a t i o n . (See F i g u r e 3 a b o v e . ) F o r the sake o f s i m p l i c i t y , i t w i l l be assumed t h a t each c o n d i t i o n a l p . d . f . , P n L j (w s ; w f ) [ P ^ w s ; w u ) ] has the same mode, which w i l l be denoted as \ : m ( \ : n f ) - In o t h e r w o r d s , * m ; n u ( w m . n f ) . i s a wage s e t t l e m e n t towards which t h e c h i e f n e g o t i a t o r f o r t h e u n i o n ( f i r m ) p e r c e i v e s t h a t n e g o t i a t i o n s w i l l c o n v e r g e , r e g a r d l e s s o f s t r i k e l e n g t h . I t s h o u l d be noted t h a t t h r e e a d d i t i o n a l f a c t o r s s h o u l d a f f e c t the shapes o f each c o n d i t i o n a l p . d . f . , P n u ( w s;w^) o r P n ^(w s ; w u ) These f a c t o r s a r e (1) t h e p e r c e n t a g e i n c r e a s e i n t h e consumer p r i c e 29 In o t h e r w o r d s , employees w i l l make " t h o s e i n v i d i o u s com-p a r i s o n s " w i t h o t h e r employees' wage r a t e s . B u t , t h e i r c o m p a r i s o n s a r e not n e c e s s a r i l y " c o e r c i v e " c o m p a r i s o n s , as A r t h u r Ross would have us b e l i e v e . 53 i n d e x , (2) t h e r a t e o f change o f the change i n average comparable wage s e t t l e m e n t s and (3) each b a r g a i n e r ' s s u b j e c t i v e e s t i m a t e o f h i s b a r g a i n i n g s k i l l s , as opposed t o t h o s e o f h i s opponent. T h e i r i n -f l u e n c e s on p n u ( w | s ; w ^ ) and p n ^ ( w | s ; w u ) w i l l be e x p l a i n e d b e l o w . There s h o u l d be a " r i d g e o f s t r i k e modes" which l i e s be tween the wage a x i s and the f i r m o r u n i o n r u i n a t i o n c u r v e s , depending upon w h i c h e v e r i s c l o s e r t o the wage a x i s . I t i s d e p i c t e d i n F i g u r e 7 . A t l e a s t two f a c t o r s w i l l be i n f l u e n c i n g t h e p a r t i e s ' b e h a v i o u r d u r i n g the s t r i k e . On t h e one h a n d , t h e p a r t i e s w i l l be w a i t i n g each o t h e r o u t . They w i l l be p a r t i c u l a r l y r e l u c t a n t t o s e t t l e t o o q u i c k l y , s i n c e , f o r i n s t a n c e , a q u i c k s e t t l e m e n t might be c o n s t r u e d as a s i g n o f weakness a n d , t h e r e f o r e , become an u n d e s i r a b l e p r e c e d e n t f o r f u t u r e rounds o f n e g o t i a t i o n s . Hence each p n u ( s | w ; w ^ . ) [ p n ^ ( s | w ; w u ) ] w i l l t a k e on r e l a t i v e l y s m a l l v a l u e s f o r s h o r t s t r i k e d u r a t i o n s . On the o t h e r h a n d , the l o n g e r the s t r i k e l a s t s , t h e g r e a t e r w i l l be the [a pnion.1) c o s t s t h a t t h e s t r i k e imposes on both s i d e s a n d , c o n s e q u e n t l y , the g r e a t e r w i l l be the inducement f o r both s i d e s t o s e t t l e . S i n c e t h e c o s t s t h a t t h e p a r t i e s i n c u r s h o u l d i n d u c e them to s e t t l e b e f o r e they a t t a i n r u i n a t i o n , each p n L | ( s | w ; w ^ ) [ p n f . ( s | w ; w u ) ] w i l l t a k e on p r o g r e s s i v e l y s m a l l e r v a l u e s , f o r i n c r e a s i n g s t r i k e l e n g t h s which a r e a p p r o a c h i n g the maximum s t r i k e l e n g t h , s^. The s t r i k e modes o f each p n u ( s , w | w ^ ) and each P u f ( s > w l w u ) a r e t h o s e s t r i k e l e n g t h s f o r which t h e f i r m and u n i o n have w a i t e d l o n g enough and i n c u r r e d s u f f i c i e n t c o s t s t h a t the time i s p r o p i t i o u s t o s e t t l e . The modes o f the p n u ( s , w | w ^ ) and p n ^ ( s , w | w u ) w i l l be denoted as s (w) and s . f ( w ) r e s p e c t i v e l y . I t i s noteworthy t h a t t h e y Pnf (s, w) Pnu (s- w ) w Firm's Joint Subjective p.d.f. Union's Joint Subjective p.d.f. L e g e n d : w w r f W m:nu w m:uf = wage offer (or potential wage settlement) = firm's reservation wage = union's reservation w a g e — mode of wage c r o s s - s e c t i o n s of union's joint p.d.f. = mode of wage c r o s s - s e c t i o n of firm's joint p.d.f. s = strike length NEBQC = union's ruination curve NWQC = firm's ruination curve pnf (s, w)= firm's joint subjective p.d.f. Pnu (s> w ) = union's joint subjective p.d.f. Figure 7 Strike Cross-Sections of Union and Firm Joint Subjective p.d.f.s. 55 s h o u l d change i n v a l u e as the wage r a t e w, c h a n g e s . (See F i g u r e 7 . ) The modes, s , ,(w) and s m . . ( w ) , may be c r u d e l y e s t i m a t e d by r e f e r -m:nu m:nf J J J r i n g to d a t a c o n c e r n i n g r e c e n t s t r i k e l e n g t h s and t h e c o r r e s p o n d i n g wage s e t t l e m e n t s . However, due a l l o w a n c e must be made f o r d i f f e r e n c e s i n f i r m s ' a b i l i t i e s t o pay and u n i o n members' r e s e r v a t i o n wages. In a d d i t i o n , the l e n g t h s o f p a s t s t r i k e s i n v o l v i n g l a b o u r and management s h o u l d i n f l u e n c e the l o c a t i o n o f s ; (w) and s f ( w ) . R e l a t i v e l y l o n g ( s h o r t ) s t r i k e s i n the p a s t s h o u l d cause s (w) and s r ( w ) a * m:nu m:nf t o move away from (toward) t h e wage a x i s , cut. pat. M o r e o v e r , t h e r e s h o u l d be s e c o n d a r y r i d g e s o f s t r i k e modes which c o r r e s p o n d t o the d a t e s on which t h e f i r m ' s s t r i k e i n s u r a n c e fund and t h e u n i o n ' s s t r i k e fund e x p i r e . However, i f the a d v e r s a r y does not know (and c a n n o t e s t i m a t e ) t h e date on which t h e g i v e n s i d e ' s d e f e n c e fund w i l l e x p i r e , the a d v e r s a r y ' s p . d . f . w i l l not i n c l u d e t h e s t r i k e modes t h a t c o r r e s p o n d t o t h i s d a t e . The p . d . f . s t h a t r e s u l t from c o m b i n i n g the two p r e c e d i n g s e t s o f c r o s s - s e c t i o n s w i l l be b i m o d a l . Both modes s h o u l d l i e a l o n g t h e r i d g e o f wage modes. One mode w i l l l i e o v e r the wage a x i s and s h o u l d be much h i g h e r than the o t h e r mode. The o t h e r mode presumably w i l l be a t the ( s a d d l e ) p o i n t where t h e r i d g e o f wage modes i n t e r s e c t s w i t h the r i d g e o f s t r i k e modes. (Combine F i g u r e s 6 and 7 . ) The l a t e s t wage o f f e r s by t h e f i r m and u n i o n , w^ and wu r e s p e c t i v e l y , a l s o d e t e r m i n e the b a s i c shape o f the u n i o n and f i r m p . d . f . s . The u n i o n and f i r m p . d . f . s , - - p n u ( w , s | w f ) and p f ( w , s | w u ) - -r e s p e c t i v e l y a r e c o n d i t i o n a l upon w^ and w . T h i s i s b e c a u s e , i n t h e f a c e o f i m p e r f e c t i n f o r m a t i o n , w f ( w N ) p r o v i d e s some i n f o r m a t i o n t o t h e 56 u n i o n ( f i r m ) o f , f o r e x a m p l e , the a d v e r s a r y ' s n e g o t i a t i n g s t r a t e g y . • F u r t h e r m o r e , the f i r m and u n i o n wage o f f e r s , i n e f f e c t , w i l l cause t h e u n i o n and f i r m p . d . f . s t o become t r u n c a t e d d u r i n g n e g o t i a t i o n s . I t i s assumed t h a t b a r g a i n e r s adhere t o an u n w r i t t e n c o n v e n t i o n which t y p i c a l l y i s a p a r t o f p r a c t i c a l n e g o t i a t i o n s and 30 which i s termed the " R e t a l i a t i o n C o n v e n t i o n " h e r e . Retaliation Convention:- Genenally bpeaklng, nelXhen. ban-galnen will r e n e g e on an unconditional wage. off en. (A wage, of fen lb "unconditional" If the. panty that made. IX doeb not btipulate that It may be. wlthdnawn laten on dusting ne-gotiaXlonb.) The union [flnm] lb bald to nenege on an unconditional latent wage offen If IX bubbequently makeb an "Infenlon wage offen": a wage, offen which ti> gneaten than [lebb than) 1X6 latent wage, offen. If the union on flnm make* an Infenlon wage. offen the. advenbany will ne-tallate. Retaliation will conbti,t of a btnlke on. lock-out. Moneoven, the panty that netallateb will be Intent upon dnXvlng the othen bide Into nalnatlon nathen than accept a wage offen that lb Infenlon to the unqualified wage of fen that the othen bide neneged on. T h u s , t h e r e presumably i s a r a t h e r s m a l l ( c u m u l a t i v e ) p r o b a b i l i t y ( e . g . , 2%) t h a t b a r g a i n e r s w i l l renege on t h e i r l a t e s t u n q u a l i f i e d wage o f f e r s . The e f f e c t o f t h i s c o n v e n t i o n i s t h a t each t i m e t h e u n i o n o r f i r m makes a wage o f f e r t h a t i s not i n f e r i o r t o i t s l a t e s t wage o f f e r , both t h e u n i o n and f i r m s h o u l d r e a s s i g n most o f the c u m u l a t i v e p r o b a b i l i t y t h a t l i e s a t o r above (below) t h e u n i o n ' s ( f i r m ' s ) l a t e s t wage o f f e r and a t o r below (above) t h e u n i o n ' s ( f i r m ' s ) next l a t e s t wage o f f e r f o r a l l s t r i k e l e n g t h s . They s h o u l d r e a s s i g n most o f t h i s c u m u l a t i v e S e e , f o r i n s t a n c e , A t k i n s o n , 1977, 4 5 - 4 7 , e s p e c i a l l y 4 6 - 4 7 , where A t k i n s o n s p e l l s out t h e f o l l o w i n g element o f f a i r p l a y i n n e g o t i -a t i o n s : " A n , o f f e r once made s h o u l d not be withdrawn u n l e s s i t was c l e a r l y coiYdi^onaT" 1 a t the time o f m a k i n g , o r t h e c i r c u m s t a n c e s s u r r o u n d -i n g i t have changed s i g n i f i c a n t l y . " 57 p r o b a b i l i t y t o t h e r e g i o n o f t h e f e a s i b l e s e t t h a t l i e s between t h e f i r m ' s l a t e s t wage o f f e r ( w f ) and t h e u n i o n ' s l a t e s t wage o f f e r (wu) f o r a l l f e a s i b l e s t r i k e l e n g t h s ( i . e . , f o r . a l l s such t h a t 0 <_ s <_ s m ) . I t i s i n t h i s sense t h a t w^ and wu t r u n c a t e the u n i o n and f i r m p . d . f . s . Some p o s i t i v e c u m u l a t i v e p r o b a b i l i t y s h o u l d remain between t h e u n i o n ' s ( f i r m ' s ) l a t e s t wage o f f e r and i t s n e x t l a t e s t wage o f f e r f o r a l l s t r i k e l e n g t h s , s i n c e i t may renege on i t s most r e c e n t wage o f f e r l a t e r on d u r i n g n e g o t i a t i o n s . 2 . 8 O b j e c t i v e F u n c t i o n s and D e c i s i o n R u l e s The u n i o n and f i r m seek t o maximize the o b j e c t i v e f u n c t i o n s t h a t f o l l o w : U n i o n : P . NEB ( 0 , w ) p n u ( 0 , w | w f ) dw + Jn 1 im 6->0 f°° NEB ( s , w ) p n u ( s , w | w f ) dw ds > 0 JO + 6 (13) F i r m : (0,w) p n f (0 ,w |wu) dw + 1 im 6+0 0 + 6 0 NW ( s , w ) p n f ( s , w | w f ) dw ds 1 0 . . . (14) where d e l t a (<$) i s a v e r y s m a l l p o s i t i v e number. The l e f t h a n d ( r i g h t -hand) i n t e g r a l s i n e q u a t i o n s (13) and (14) i n v o l v e t h e s i n g u l a r ( c o n -t i n u o u s ) p o r t i o n s o f the u n i o n and f i r m p . d . f . s . The r e q u i r e m e n t t h a t e q u a t i o n s (13) and (14) must e i t h e r equal o r exceed z e r o i n v a l u e r e -f l e c t s the f a c t t h a t the f i r m and u n i o n a r e c o n s t r a i n e d by r u i n a t i o n . 58 The u n i o n and f i r m d e c i s i o n r u l e s d e r i v e f r o m , and i n v o l v e v a r i a n t s o f , t h e i r r e s p e c t i v e o b j e c t i v e f u n c t i o n s . A t t h e commencement o f n e g o t i a t i o n s , t h e f i r m and u n i o n w i l l d e t e r m i n e t h e i r i n i t i a l wage o f f e r s , wu and w .^ r e s p e c t i v e l y . The f i r m ( u n i o n ) w i l l c a l c u l a t e i t s o p t i m a l wage o f f e r , w^* ( w u * ) , and then d e f l a t e w^* ( i n f l a t e w u * ) i n o r d e r t o d e t e r m i n e w^ ( w u ) . The o p -t i m a l wage o f f e r s , w^* and w u * , a r e t h e wage o f f e r s , w^ and w-j r e -s p e c t i v e l y , t h a t ma.xjjmiz<i t h e f o l l o w i n g e x p r e s s i o n s : ER f .(:wk) = NW ( 0 , w k ) p _ f ( w k | s = 0 ; w u ) + l i m r NW ( s , w . ) p n f (w. | s ; w ) ds . . . (13) JO + 6 ERu (Wj) = NEB ( 0 , w v ) p n u (w-, js = 0 ; w f ) l i m J100 NEB ( s , w p p n u ( w ^ s ; w f ) ds . . . (14.) (-  0 + 6 where ER .^ (w^) and ERu (w-j) r e s p e c t i v e l y r e p r e s e n t the e x p e c t e d r e t u r n s (ER) t o t h e f i r m ( f ) and u n i o n (u) from w k and w-j. The f i r m and u n i o n w i l l d e t e r m i n e t h e i r i n i t i a l ( o r subsequent) wage o f f e r s as f o l l o w s w.p = w f * - a;oT> 0 and a 1 = 0 . . . (15) w u = w u * + 3 ; 3 > 0 and 3 ' - 0 . . . (16) The p o s i t i v e c o n s t a n t s , a and 3 , a r e i n c l u d e d i n e q u a t i o n s (15) and (16) f o r two r e a s o n s . F i r s t , a and 3 p r o v i d e t h e f i r m and u n i o n room t o manoeuyer d u r i n g n e g o t i a t i o n s . S e c o n d , t h e f i r m ( u n i o n ) may agree towage s e t t l e m e n t t h a t . e x c e e d s ( i s l e s s than) w u * . ( w f * ) . I t i s assumed t h a t w u and 59 w i l l not i n c r e a s e i n v a l u e and t h a t t h e y most l i k e l y w i l l d e c r e a s e i n v a l u e d u r i n g n e g o t i a t i o n s . T h i s a s s u m p t i o n c l e a r l y i s c o n s i s t e n t w i t h the R e t a l i a t i o n C o n v e n t i o n i f w u * (w^*) remain c o n s t a n t . E q u a t i o n s (13') - (16) g r e a t l y o v e r s i m p l i f y t h e d e t e r m i n a -t i o n of w * , w f * , w and w f , because they i g n o r e t h e f a c t t h a t p (s,w|!w^) and p ^ ( s , w j w u ) . are c o n d i t i o n a l upon w^ and w u r e s p e c t i v e l y . I d e a l l y , the f i r m ' s ( u n i o n ' s ) c h i e f n e g o t i a t o r , i n c a l c u l a t i n g h i s o p -t i m a l wage o f f e r , s h o u l d t a k e i n t o c o n s i d e r a t i o n t h a t h i s wage o f f e r w i l l i n f l u e n c e t h e a d v e r s a r y ' s c o u n t e r o f f e r t h r o u g h the a d v e r s a r y ' s p . d . f . (See e q u a t i o n s (13) [ ( 1 4 ) ] a b o v e . ) The a d v e r s a r y ' s c o u n t e r -o f f e r , i n t u r n , w i l l a f f e c t t h e f i r m ' s ( u n i o n ' s ) c o u n t e r o f f e r t h r o u g h 31 t h e f i r m ' s ( u n i o n ' s ) p . d . f . , and so f o r t h . U n f o r t u n a t e l y , i t i s v i r -t u a l l y i m p o s s i b l e t o model the e f f e c t s on w ^ * , w u * , w^., and wu t h a t a r e a s s o c i a t e d w i t h such i n t e r d e p e n d e n c i e s between one s i d e ' s wage o f f e r and t h e o t h e r s i d e ' s c o u n t e r - o f f e r . E q u a t i o n s (13) - (16) a b s t r a c t e d from such i n t e r d e p e n d e n c i e s f o r t h i s r e a s o n . I t s h o u l d be noted t h a t t h e o p t i m a l wage o f f e r s , w u * and w ^ * , s h o u l d t a k e on v a l u e s which a r e c l o s e t o t h e v a l u e s o f t h e wage r a t e s t h a t c o r r e s p o n d t o t h e modes o f p n u (w |s = 0 ; w ^ ) , p n u (w|s >. 0 ; w f ) , p n f (w|s = 0 ; w u ) , and p . f (w|s > 0 ; w j ; and w m : n f r e -s p e c t i v e l y . I n d e e d , i f NW ( 0 , w k ) and NW ( s , w k ) [NEB(0,w-,) and NEB (s,w-| remained c o n s t a n t , w f * (w * ) would o c c u r a t w and w s f r e s p e c t i v e l y (See e q u a t i o n s (13) and ( 1 4 ) . ) However, s i n c e NW (NEB) i n c r e a s e s as t h e 31 Such i n t e r d e p e n d e n c i e s between one p a r t y ' s wage o f f e r and t h e a d v e r s a r y ' s c o u n t e r o f f e r i n v o l v e what C o d d i n g t o n terms " h i g h e r l e v e l o f d e c i s i o n - m a k i n g ( 1 9 6 8 , 6 4 ) . 60 wage r a t e d e c r e a s e s ( i n c r e a s e s ) , w^* ( w u * ) s h o u l d be l<m than, [gtieatzsi than) w m > „ f ( w m ' n u ^ * M o r e o v e r > the l e s s w i d e l y p f (w|s = 0 ; w f ) and p n f (w|s > 0 ; w f ) [ p n u (w|s = 0 ; w u ) and p n u (w|s > 0 ; w u ) ] a r e d i s p e r s e d about w m . n f ( w m . n u ) t h e g r e a t e r w i l l be w . f ( w • ) , and o b v e r s e l y , (see e q u a t i o n s (13) and ( 1 4 ) ) . L e t us assume t h a t the u n i o n ( f i r m ) w i l l s e l e c t one o f t h r e e p o s s i b l e c o u r s e s o f a c t i o n : (1) t o a c c e p t the u n i o n 1 s ( f i r m ' s ) l a t e s t wage o f f e r , (2) t o make a c o u n t e r o f f e r and (3) t o l o c k o u t o r f o r c e a u n i o n - i n i t i a t e d s t r i k e ( t o s t r i k e ) . The l a s t o p t i o n i s whether o r not t o c o n t i n u e t o l o c k o u t o r t a k e a s t r i k e ( t o s t r i k e ) d u r i n g - p o s t - s t r i k e n e g o t i a t i o n s . The f i r m ' s ( u n i o n ' s ) c h i e f n e g o t i a t o r w i l l c a l c u l a t e the e x p e c t e d r e t u r n s t h a t are a s s o c i a t e d w i t h each o f the t h r e e o p t i o n s he f a c e s when c o n f r o n t e d w i t h t h e u n i o n ' s ( f i r m ' s ) wage o f f e r . The r e t u r n s t h a t a r e e x p e c t e d t o a c c r u e t o t h e u n i o n o r f i r m from a c c e p t i n g the o t h e r s i d e ' s l a t e s t wage o f f e r w i l l be termed " c e r t a i n r e t u r n s " (CR) and c a l c u l a t e d as f o l l o w s : CRu = NEB ( 0 , w f ) . . . (17) C R f = NW ( 0 , • W ( J ) . . . (18) where u and f r e s p e c t i v e l y s t a n d f o r u n i o n and f i r m . The e x p e c t e d r e -t u r n s t h a t a r e a s s o c i a t e d w i t h making a c o u n t e r o f f e r a r e ERu (w ) f o r t h e u n i o n and ER^ (w^) f o r t h e f i r m , as c a l c u l a t e d i n e q u a t i o n s (13) and (14) r e s p e c t i v e l y . 61 The e x p e c t e d r e t u r n s t o the u n i o n (u) and f i r m ( f ) from s t r i k i n g a r e ER = l i m 0 +6 NEB ( s , w ) p n u ( s , w | s > 0 ; w f ) dwds (19) E R c , = l i m '°° S T 6->0 0 + 6 NW ( s , w ) p n f ( s , w | s > 0 ; w u ) dwds . . . (20) where the s u b s c r i p t s i n E R s u and E R ^ r e p r e s e n t s s t r i k i n g . The c h i e f n e g o t i a t o r f o r the f i r m ( u n i o n ) w i l l a p p l y D e c i -s i o n Rule 1 (DR1) each time the u n i o n ( f i r m ) has j u s t made a wage o f f e r : decision Rule. 7: The chief negotiator, fan. the union oh. flnm will select the option which yield* the greatest return*, whether expected on. certain. If the flnm'A [union'*) chief negotiator decide* to make a counter-offer, the counteroffer will be determined according to equationlilS.), (U.) ]/32 An i m p o r t a n t f e a t u r e o f D e c i s i o n Rule 1 i s t h a t i t can g i v e r i s e not o n l y t o n o n - s t r i k e s e t t l e m e n t s but a l s o t o s t r i k e - a c c o m p a n i e d s e t t l e -ments. 2 . 9 The Course o f N e g o t i a t i o n s : C o n c e s s i o n a r y B e h a v i o u r , Impasses and S e t t l e m e n t s In a p p l y i n g D e c i s i o n R u l e 1 , t h e c h i e f n e g o t i a t o r s f o r the u n i o n and f i r m may engage i n c o n c e s s i o n a r y b e h a v i o u r , a t t a i n impasses o r b o t h . S e v e r a l f e a t u r e s o f t h e c u r r e n t b a r g a i n i n g t h e o r y w i l l shape 32 I f w f * e q u a l s w * - - w h i c h i s v e r y u n l i k e l y — a " p o i n t c o n -t r a c t zone" i s s a i d t o e x i s t . u Our t e r m i n o l o g y f o l l o w s the t e r m i n o l o g y o f Walton and M c K e r s i e ( 1 9 6 5 ) . 62 t h e c o u r s e o f n e g o t i a t i o n s d u r i n g p r e - o r p o s t - s t r i k e n e g o t i a t i o n s . One c o n c e s s i o n - g e n e r a t i n g o r i m p a s s e - g e n e r a t i n g f e a t u r e o f t h e c u r r e n t t h e o r y i s t h e r e l a t i o n s h i p between t h e f i r m ' s o p t i m a l wage o f f e r , w ^ * , and t h e u n i o n ' s o p t i m a l wage o f f e r , w u * . I f w^* i s g r e a t e r ( l e s s ) than w u * , a " p o s i t i v e ( n e g a t i v e ) c o n t r a c t zone" i s s a i d to exist .32 A p o s i t i v e ( n e g a t i v e ) c o n t r a c t zone w i l l e x i s t i f t h e u n i o n and f i r m n e g o t i a t o r s each e s t i m a t e t h a t t h e i r own b a r g a i n i n g s k i l l s a r e i n f e r i o r ( s u p e r i o r ) t o t h e o t h e r ' s b a r g a i n i n g s k i l l s . T h i s r e s u l t o b t a i n s because t h e u n i o n ' s ( f i r m ' s ) c h i e f n e g o t i a t o r w i l l s h i f t h i s r i d g e o f wage modes downwards (upwards) t o t h e e x t e n t t h a t he p e r c e i v e s t h a t h i s b a r g a i n i n g s k i l l s a r e i n f e r i o r t o t h o s e o f h i s c o u n t e r p a r t , and o b v e r s e l y . 3 3 The p a r t i e s ' wage modes l a r g e l y d e t e r m i n e t h e i r o p t i m a l wage o f f e r s a s e x p l a i n e d a b o v e . The e x i s t e n c e o f a p o s i t i v e ( n e g a t i v e ) c o n t r a c t zone i s a n e c e s s a r y c o n d i t i o n f o r a n o n - s t r i k e ( s t r i k e - a c c o m p a n i e d ) s e t t l e m e n t . T h i s i s because t h e f i r m and u n i o n n e g o t i a t o r s use w^* and w u * r e s p e c -t i v e l y i n d e t e r m i n i n g t h e i r wage o f f e r s , w^ and w u , and because t h e p o s i t i v e a d d i t i v e f a c t o r s t h a t t h e y a p p l y t o w f * and w u * t o d e t e r m i n e w^ and wu presumably w i l l d i m i n i s h i n v a l u e as n e g o t i a t i o n s t a k e p l a c e . (See e q u a t i o n s (15) and (16) a b o v e . ) F u r t h e r m o r e , t h e g r e a t e r ( l o w e r ) i s t h e a b s o l u t e v a l u e o f ( w ^ * - w u * ) , t h e g r e a t e r i s t h e p r o b a b i l i t y o f a n o n - s t r i k e ( s t r i k e - a c c o m p a n i e d ) s e t t l e m e n t , e v e r y t h i n g e l s e t h e same. ° ^ I f t h e p a r t i e s were n e g o t i a t i n g t o renew a p a s t a g r e e m e n t , r a t h e r t h a n f o r a f i r s t a g r e e m e n t , t h e u n i o n ' s ( f i r m ' s ) c h i e f n e g o t i a t o r undoubtedly would use t h e p a r t i e s ' p a s t h i s t o r y o f n e g o t i a t i o n s t o a s s e s s t h e p r o b a b i l i t y o f h i s e x a c t i n g v a r i o u s wage s e t t l e m e n t s from t h e f i r m . In p a r t i c u l a r , he would compare t h e p a r t i e s ' p a s t wage s e t t l e -ments w i t h contemporary wage s e t t l e m e n t s t h a t were n e g o t i a t e d f o r com-p a r a b l e j o b s e l s e w h e r e . 63 Given t h a t t h e r e i s a n e g a t i v e o r p o s i t i v e c o n t r a c t z o n e , the f a c t o r s t h a t a l t e r e i t h e r t h e u n i o n o r f i r m n e t - g a i n f u n c t i o n s o r t h e i r s u b j e c t i v e j o i n t p . d . f . s w i l l i n f l u e n c e the c o u r s e o f n e g o t i a -t i o n s . Changes i n NW, NEB, p ^ u , and p ^ c l e a r l y change t h e e x p e c t e d ( o r c e r t a i n ) r e t u r n s f o r each o f t h e t h r e e o p t i o n s t h a t b a r g a i n e r s c o n -s i d e r i n a p p l y i n g D e c i s i o n R u l e 1 . Changes i n c e r t a i n f a c t o r s w i l l cause NW and NEB t o s h i f t ; w h e r e a s , changes i n c e r t a i n o t h e r f a c t o r s w i l l cause t h e b o u n d a r i e s o f t h e j o i n t p . d . f . s t o c h a n g e , t h e r e b y n e c e s s i t a t i n g t h a t b a r g a i n e r s r e s i g n t h e i r r e s p e c t i v e p . d . f . s . I n -c l u d e d among the " b o u n d a r i e s o f the j o i n t p . d . f . s " a r e t h e u n i o n and f i r m ' s r u i n a t i o n c u r v e s , the minimum wage ray and t h e h o r i z o n t a l r a y s t h a t c o r r e s p o n d t o t h e u n i o n and f i r m ' s l a t e s t wage o f f e r s , p r o v i d e d t h a t the l a t t e r a r e u n c o n d i t i o n a l wage o f f e r s so t h a t t h e R e t a l i a t i o n C o n v e n t i o n a p p l i e s . The u n i o n and f i r m p . d . f . s w i l l be h e l d c o n s t a n t , so t h a t we can f o c u s on s h i f t s o f NEB and NW i n t h e a n a l y s i s t h a t f o l l o w s . S t r i k e c o s t s a r e one o f the p r i n c i p a l f a c t o r s t h a t b r i n g about s h i f t s o f NW and NEB d u r i n g n e g o t i a t i o n s . S t r i k e c o s t - i n d u c e d s h i f t s o f NW and NEB t a k e p l a c e d u r i n g p o s t - s t r i k e n e g o t i a t i o n s but not d u r i n g p r e - s t r i k e n e g o t i a t i o n s . There a r e two r e a s o n s t h a t s t r i k e c o s t s w i l l not cause NW o r NEB t o s h i f t d u r i n g p r e - s t r i k e n e g o t i a t i o n s . F i r s t , the p r e - s t r i k e f o r m u l a t i o n s o f NW and NEB i n c l u d e a pfviofvi c o s t s but no a poAteAiosu. c o s t s . In o t h e r w o r d s , s i n c e no s t r i k e has commenced, no r e a l economic c o s t s o f p a s t s t r i k e a c t i o n ( i . e . , a pohtzKloKl s t r i k e c o s t s ) a r e added t o the c o s t s o f f u t u r e s t r i k e a c t i o n ( i . e . , a ptvlotuL s t r i k e c o s t s ) . 64 T h i s means, i n t u r n , t h a t t h e a pfvicvi c o s t s f o r a s t r i k e o f any g i v e n l e n g t h w i l l remain c o n s t a n t d u r i n g p r e - s t r i k e n e g o t i a t o n s . S e c o n d , NW and NEB i n v o l v e l o n g t i m e h o r i z o n s : <=° and L. The c o n s t a n c y o f a phJLofvL s t r i k e c o s t s and t h e f i r m ' s i n f i n i t e time h o r i z o n mean t h a t the f i r m ' s NW f u n c t i o n s w i l l be c o m p l e t e l y i n v a r i a n t w i t h r e s p e c t t o t i m e d u r i n g p r e - s t r i k e n e g o t i a t o n s . NEB, i n e f f e c t , w i l l be i n v a r i a n t w i t h r e s p e c t t o changes i n time which a r e v e r y s m a l l r e l a t i v e t o t h e u n i o n members' 34 / e a r n i n g s p a n s , I. Time changes d u r i n g p r e - s t r i k e n e g o t i a t i o n s (and t y p i c a l l y d u r i n g p o s t - s t r i k e n e g o t i a t o n s ) a r e v e r y s m a l l r e l a t i v e t o By c o n t r a s t , both NW and NEB w i l l s h i f t towards the wage a x i s d u r i n g p o s t - s t r i k e n e g o t i a t i o n s . T h i s o c c u r s i n r e s p o n s e t o the f i n a n c i a l s t r e s s t h a t the u n i o n and f i r m e x p e r i e n c e d u r i n g t h e s t r i k e , as e x p l a i n e d above. F i n a n c i a l s t r e s s w i l l a f f e c t NEB (NW) u n i f o r m l y , i n t h e sense t h a t a c o n s t a n t amount o f f i n a n c i a l s t r e s s w i l l be s u b t r a c t e d from NEB ( s , w ) [NW(s,w)] f o r any g i v e n wage s t r i k e ; :combination ( s , w ) , a t 36 any g i v e n p o i n t i n time d u r i n g the s t r i k e . T h u s , C R u , E R s u and ER (w * ) [ C R £ , ER £ and ER' ( w r * ) ] w i l l be reduced by a common f i x e d u u f s f f f- . . amount. In s h o r t , t h e i r r e l a t i v e v a l u e s w i l l not c h a n g e . 34 NEB w i l l r o t a t e i n f i n i t e s i m a l l y towards the wage a x i s . i n response t o the passage o f t i m e . However, t h e s e i n f i n i t e s i m a l ' changes w i l l be i g n o r e d , as e x p l a i n e d above. 35 Even though NEB and NW remain s t a t i c , s t r i k e c o s t s c r e a t e an i n c e n t i v e f o r t h e p a r t i e s ' r e a c h i n g a n o n - s t r i k e s e t t l e m e n t , as opposed t o a s t r i k e - a c c o m p a n i e d s e t t l e m e n t d u r i n g p r e - s t r i k e ( o r p o s t - s t r i k e ) n e g o t i a -t i o n s . S t r i k e - a c c o m p a n i e d s e t t l e m e n t s c o n f e r l o w e r own r e t u r n s on the p a r t i e s than do n o n - s t r i k e s e t t l e m e n t s , ceX. pax. In o t h e r w o r d s , NEB and NW d e c r e a s e as s i n c r e a s e s , e v e r y t h i n g e l s e t h e same. (See p . p . 37-38 a b o v e . ) 3 6 S e e pages 30 and 3 7 - a b o v e . 65 I f d e f e n c e funds e x i s t , t h e p a r t s o f NW and NEB which a r e k i n k e d where d e f e n c e funds become exhausted w i l l s h i f t towards t h e wage a x i s , as e x p l a i n e d a b o v e . T h i s s h i f t w i l l d e c r e a s e the v a l u e s o f ER r su and ER (w * ) [ER . and ER. (w * ) ] r e l a t i v e t o t h e v a l u e o f CR ( C R . ) , u u s f f f u f e v e r y t h i n g e l s e the same. Such a r e s u l t o b t a i n s b e c a u s e , as t h e s t r i k e p r o g r e s s e s , an i n c r e a s i n g l y s m a l l e r p r o p o r t i o n o f the n o n - s e v e r a n c e r e g i o n o f the f e a s i b l e s e t i n c l u d e s payments from the d e f e n c e f u n d . The g r e a t e s t drop i n E R „ , , and ER (w * ) [ E R . and ER. ( w . * ) ] r e l a t i v e t o 3 r s u u u s f f f CRU (CR^) w i l l have o c c u r r e d when the u n i o n ' s ( f i r m ' s ) d e f e n c e fund v e r y n e a r l y has e x p i r e d . Once i t has e x p i r e d , CRu (CR^) w i l l i n c r e a s e i n v a l u e r e l a t i v e t o E R „ , , and ER,, (w * ) [ER ~ and ER. ( w . * ) ] . T h u s , t h e su u u s f f f payment o f s t r i k e i n s u r a n c e o r s t r i k e pay e n a b l e s l a b o u r and management t o b e t t e r w i t h s t a n d a s t r i k e but i t a l s o c r e a t e s an i n c e n t i v e f o r them t o s e t t l e once the s t r i k e has commenced and b e f o r e t h e s e funds have been d e p l e t e d , c e £ . pcui. One o t h e r f a c t o r — i n c r e a s e s ( d e c r e a s e s ) i n the f i r m ' s l a t e s t wage o f f e r , w ^ - - w i l l cause t h e u n i o n ' s NEB f u n c t i o n t o r o t a t e towards (away from) t h e wage a x i s d u r i n g both p r e - s t r i k e and p o s t - s t r i k e n e g -g o t i a t i o n s . (See pages 36-37 - a b o v e . ) The r o t a t i o n towards (away from) t h e wage a x i s w i l l g e n e r a t e an i n c e n t i v e ( d i s i n c e n t i v e ) f o r t h e u n i o n t o a c c e p t the f i r m ' s l a t e s t wage o f f e r , e v e r y t h i n g e l s e t h e same. As w^ i n c r e a s e s ( d e c r e a s e s ) , the o p p o r t u n i t y c o s t s o f s t r i k e i n c r e a s e ( d e c r e a s e ) , e v e r y t h i n g e l s e t h e same. The e x p e c t e d b e n e f i t s t o the u n i o n o f s t r i k i n g , E B s u , c o n s e q u e n t l y , w i l l d e c r e a s e . But c e r t a i n r e t u r n s t o t h e u n i o n o f a c c e p t i n g w^,-CR , w i l l remain c o n s t a n t , s i n c e they a r e c a l c u l a t e d a t a s t r i k e l e n g t h o f z e r o . 66 The f o r e g o i n g p a r t i a l e q u i l i b r i u m a n a l y s i s presupposed t h a t t h e u n i o n and f i r m p . d . f . s remained the same a n d , t h e r e f o r e , t h a t the b o u n d a r i e s o f t h e s e p . d . f . s d i d not move. However, an i n c r e a s e i n t h e f i r m ' s l a t e s t wage o f f e r w i l l cause t h e u n i o n ' s r u i n a t i o n c u r v e t o r o t a t e towards the wage a x i s d u r i n g n e g o t i a t i o n s . In a d d i t i o n , t h e r e a l c o s t s o f f i n a n c i a l s t r e s s w i l l cause the f i r m and u n i o n r u i n a t i o n c u r v e s t o s h i f t towards the wage a x i s d u r i n g p o s t - s t r i k e n e g o t i a t i o n s . Any such movement o f t h e u n i o n a n d / o r f i r m r u i n a t i o n c u r v e s r e q u i r e s t h a t t h e u n i o n and f i r m c h i e f n e g o t i a t o r s r e a s s i g n t h e i r r e s p e c t i v e p . d . f . s . In p a r t i c u l a r , t h e b a r g a i n e r s must r e a s s i g n t h o s e p r o b a b i l i t i e s w h i c h f o r m e r l y l a y e i t h e r w i t h i n the n o n - s e v e r a n c e r e g i o n o f the f e a s i b l e s e t o r w i t h i n t h e f e a s i b l e s e t but which r e s p e c t i v e l y l i e e i t h e r o u t s i d e the c u r r e n t n o n - s e v e r a n c e r e g i o n o f the f e a s i b l e s e t o r . o u t s i d e t h e c u r r e n t f e a s i b l e s e t . Two o t h e r f a c t o r s w i l l cause b a r g a i n e r s t o r e a s s i g n p r o -b a b i l i t i e s : u n c o n d i t i o n a l new wage o f f e r s by e i t h e r s i d e and c r e d i b l e t h r e a t s ( i n c l u d i n g c r e d i b l e b l u f f s ) . U n c o n d i t i o n a l new wage o f f e r s n e c e s s i t a t e t h a t both p a r t i e s s i m u l t a n e o u s l y r e a s s i g n p r o b a b i l i t i e s because t h e R e t a l i a t i o n C o n v e n t i o n t a k e s e f f e c t once t h e y a r e made, as e x p l a i n e d a b o v e . The u n i o n and f i r m p . d . f . s i n v o l v e s u b j e c t i v e a s s e s s -m e n t s , p e r c e p t i o n s and e x p e c t a t i o n s . A c r e d i b l e t h r e a t o r a c r e d i b l e b l u f f , t h e r e f o r e , s h o u l d cause the b a r g a i n e r who was t h r e a t e n e d o r 37 b l u f f e d t o r e a s s i g n p r o b a b i l i t i e s . S c h e l l i n g ' s (1956) work i s perhaps the d e f i n i t i v e work on the c r e d i b i l i t y o f t h r e a t s and n e g o t i a t i o n s . 67 The e x t e n t t o which a t h r e a t ( o r b l u f f ) w i l l i n d u c e the oponent t o a l t e r h i s p . d . f . o b v i o u s l y depends upon the degree t o which t h e t h r e a t i s c r e d i b l e . For i n s t a n c e , a f i r m — p a r t i c u l a r l y a f i r m i n -v o l v e d i n f i r s t c o n t r a c t n e g o t i a t i o n s — m i g h t so c o n v i n c e t h e u n i o n t h a t i t w i l l d r i v e the u n i o n i n t o r u i n a t i o n t h a t the u n i o n w i l l a s s i g n , s a y , n i n e t y p e r c e n t o f i t s p r o b a b i l i t y d i s t r i b u t i o n t o s e v e r a n c e outcomes. O r , t h e f i r m ( u n i o n ) m i g h t c o n v i n c e the u n i o n ( f i r m ) t h a t i t i s v e r y d e t e r m i n e d t o w i t h s t a n d a s t r i k e ( t o s t a n d out a l o n g t i m e ) , t h e r e b y c a u s i n g the u n i o n ( f i r m ) t o s h i f t i t s r i d g e o f s t r i k e m o d e s f a r t h e r away from the wage a x i s (see F i g u r e 6 ) . A l t e r n a t i v e l y , the f i r m ' s ( u n i o n ' s ) , c h i e f n e g o t i a t o r c o u l d a t t e m p t t o i n d u c e the opponent t o r e v i s e down-wards (upwards) h i s e s t i m a t e o f h i s r e l a t i v e b a r g a i n i n g s k i l l s by t h r e a t e n i n g t o s t r i k e , o r t o c o n t i n u e t o s t r i k e s r a t h e r than a c c e p t i n g the k i n d o f o f f e r s the u n i o n ( f i r m ) has p l a c e d on t h e b a r g a i n i n g t a b l e . T h i s means t h a t w u * (w^*) would s h i f t downwards ( u p w a r d s ) . S i g n i f i c a n t l y , u n c o n d i t i o n a l wage o f f e r s and c r e d i b l e t h r e a t s ( o r c r e d i b l e b l u f f s ) w i l l cause b a r g a i n e r s t o r e v i s e t h e i r p r o -b a b i l i t y assessments d u r i n g both p r e - s t r i k e and p o s t - s t r i k e n e g o t i a t i o n s . B a r g a i n e r s w i l l r e a s s i g n p r o b a b i l i t i e s i n one o f t h r e e ways: u n i f o r m l y , s u b j e c t i v e l y , o r both u n i f o r m l y and s u b j e c t i v e l y . A " u n i f o r m " r e a s s i g n -ment of p r o b a b i l i t y means t h a t t h e ( c u m u l a t i v e ) p r o b a b i l i t y t h a t i s t o be r e a s s i g n e d o v e r the new f e a s i b l e s e t , as c o n s t r a i n e d by the p a r t i e s ' u n c o n d i t i o n a l wage o f f e r s , i s r e a s s i g n e d u n i f o r m l y o v e r t h e new f e a s i b l e 38 The b a r g a i n e r may enhance t h e c r e d i b i l i t y o f h i s t h r e a t t o s t r i k e by i n v o k i n g the " h a n d s - t i e d " argument t h a t h i s c o n s t i t u e n c y w i l l never accede t o such proposed wage s e t t l e m e n t s . Of c o u r s e , t h e " h a n d s - t i e d " argument may b a c k f i r e . 68 s e t . A " s u b j e c t i v e " r e a s s i g n m e n t o f the u n i o n o r f i r m p . d . f . s i n v o l v e s a change i n b a r g a i n e r s ' s u b j e c t i v e a s s e s s m e n t s , p e r c e p t i o n s o r e x p e c t a -t i o n s . I t , t h e r e f o r e , g e n e r a l l y w i l l i n v o l v e a n o n - u n i f o r m r e a l l o c a t i o n o f p r o b a b i l i t i e s . F u r t h e r m o r e , i t need not be brought about by a change i n the b o u n d a r i e s o f t h e f e a s i b l e s e t but may o c c u r , f o r e x a m p l e , due t o a c r e d i b l e t h r e a t t h a t the opponent i s s u e d . Two a d d i t i o n a l f a c t o r s w i l l b r i n g about s u b j e c t i v e r e v i s i o n s o f the u n i o n and f i r m p . d . f . s . One f a c t o r i s a pobt&vlofvL s t r i k e c o s t s , whose f u n c t i o n i n c o l l e c t i v e b a r g a i n i n g i s t o i n d u c e b a r g a i n e r s t o r e -v i s e t h e i r s u b j e c t i v e a s s e s s m e n t s , p e r c e p t i o n s and e x p e c t a t i o n s . ( S e e , f o r i n s t a n c e , Dunlop ( 1 9 6 7 ) . ) The o t h e r f a c t o r i s the o p p o n e n t ' s wage o f f e r , s i n c e e a c h - s i d e ' s p . d . f . i s c o n d i t i o n a l upon i t . Under c e r t a i n c i r c u m s t a n c e s , t h e r e i s a h i g h e r p r o b a b i l i t y o f s e t t l e m e n t i f a t l e a s t . o n e b a r g a i n e r r e a s s i g n s p r o b a b i l i t i e s s u b j e c -t i v e l y , as opposed t o u n i f o r m l y . A u n i f o r m r e d i s t r i b u t i o n o f p r o b a b i l -i t i e s p r e s e r v e s t h e u n d e r l y i n g shape o f t h e b a r g a i n e r ' s p . d . f . s . The b a r g a i n e r ' s o p t i m a l wage o f f e r s h o u l d not change much i f b a r g a i n e r s r e -a s s i g n p r o b a b i l i t i e s u n i f o r m l y , p r o v i d e d t h a t the wage mode o f the b a r -g a i n e r ' s p . d . f . l i e s between t h e p a r t i e s ' l a t e s t wage o f f e r s . By c o n -t r a s t , a s u b j e c t i v e r e a s s i g n m e n t o f p r o b a b i l i t i e s which i s brought a b o u t , s a y , by a c r e d i b l e t h r e a t w i l l d e c r e a s e ( i n c r e a s e ) the u n i o n ' s ( f i r m ' s ) o p t i m a l wage o f f e r i f i t caused the u n i o n ( f i r m ) n e g o t i a t o r t o l o w e r ( r a i s e ) t h e r i d g e o f wage modes i n h i s p . d . f . In t h e f i n a l a n a l y s i s , u n c o n d i t i o n a l wage o f f e r s p l a y a key r o l e i n s e t t i n g c o n c e s s i o n - g e n e r a t i n g o r i m p a s s e - g e n e r a t i n g f o r c e s i n t o motion d u r i n g both p r e - and p o s t - s t r i k e n e g o t i a t i o n s i n t h i s t h e o r y , f o r they r e q u i r e t h a t both b a r g a i n e r s s i m u l t a n e o u s l y r e v i s e t h e i r p . d . f . s . 69 A posteriori s t r i k e c o s t s may p r o l o n g the impasse o r p r o v i d e a s t i m u l u s t o s e t t l e d u r i n g p o s t - s t r i k e n e g o t i a t i o n s . S u b j e c t i v e r e v i s i o n s o f the u n i o n and f i r m p . d . f . s . w i l l promote c o n c e s s i o n a r y b e h a v i o u r , i f they i n v o l v e t h e u n i o n ( f i r m ) c h i e f n e g o t i a t o r i n l o w e r i n g ( r a i s i n g ) the r i d g e o f wage modes i n h i s p . d . f . The l a t t e r causes the u n i o n ' s ( f i r m ' s ) o p t i m a l wage o f f e r t o d e c r e a s e ( i n c r e a s e ) . The s u b j e c t i v e n a t u r e o f the u n i o n and f i r m p . d . f . s r e n d e r s t h e c u r r e n t t h e o r y i n d e t e r m i n a t e . 2.10 S t r i k e Measures and S t r i k e " D e t e r m i n a n t s " The c u r r e n t t h e o r y models two s t r i k e d e c i s i o n s : (1) whether o r . n o t t o s t r i k e and (2) whether o r not t o c o n t i n u e t o s t r i k e once s t r i k e a c t i o n has commenced. The f o r m e r d e c i s i o n s u g g e s t s two m a c r o - l e v e l s t r i k e measures: t h e number o f s t r i k e s and the i n c i d e n c e o f s t r i k e s . The i n -c i d e n c e o f c o n t r a c t renewal s t r i k e s i s , f o r e x a m p l e , t h e r a t i o o f t h e number o f such s t r i k e s t o the number o f c o l l e c t i v e agreements t h a t have e x p i r e d . The l a t t e r d e c i s i o n s u g g e s t s t h e average d u r a t i o n o f s t r i k e a c t i v i t y as a m a c r o - l e v e l s t r i k e measure. The " d e t e r m i n a n t s " t h a t i n f l u e n c e t h e t h r e e s t r i k e measures p r e s e n t e d a r e t h o s e exogenous f a c t o r s t h a t may change from one round o f n e g o t i a t i o n s t o the n e x t . Three such measures were e x p l a i n e d above i n the p r e s e n t a t i o n o f t h e c u r r e n t t h e o r y . They i n c l u d e d t h e p a s t h i s t o r y o f n e g o t i a t i o n s , i f a n y ; r e c e n t l y n e g o t i a t e d comparable wage s e t t l e m e n t s ; and the d e a d l i n e s a t which s t r i k e funds c e a s e . There a r e s e v e r a l o t h e r exogenous d e t e r m i n a n t s o f s t r i k e a c t i v i t y . Two " d e t e r m i n a n t s " o f s t r i k e a c t i v i t y d i r e c t l y i n f l u e n c e t h e d e t e r m i n a t i o n o f w^* and w u * a n d . t h e r e b y i n f l u e n c e whether t h e c o n -t r a c t zone w i l l be p o s i t i v e o r n e g a t i v e . One f a c t o r i s t h e percentage change, in the consumer price Index (% CPI) o r ACPI + /CPI 4 ._ 1 where CPI 70 s t a n d s f o r the consumer p r i c e i n d e x and t f o r the c u r r e n t y e a r . The o t h e r f a c t o r i s the r a t e o f change o f the change i n r e c e n t l y n e g o t i -a t e d comparable wage s e t t l e m e n t s o r AW t/AW t_ ] = ( w t - w ^ J A w ^ - w t _ 2 ) where W^ . r e p r e s e n t s average comparable wage s e t t l e m e n t s d u r i n g y e a r t . The p e r c e n t a g e change i n CPI o r %CPI i s an " o r b i t o f com-p a r i s o n " t h a t l a b o u r and management o f t e n r e f e r t o d u r i n g p r a c t i c a l 39 n e g o t i a t i o n s . I t i s assumed t h a t b a r g a i n e r s i n t h e c u r r e n t t h e o r y w i l l s t r i v e f o r p e r c e n t a g e wage i n c r e a s e s which match t h e p e r c e n t a g e i n -c r e a s e i n t h e C P I , i f i t i s t o t h e i r a d v a n t a g e . In any c a s e , i f the wage r a t e t h a t c o r r e s p o n d s t o %CPI does not equal t h e wage t h a t c o r -responds t o t h e u n i o n o r f i r m wage mode ( i . e . , w . o r w x r e s p e c -r 3 m:nu m:nf K t i v e l y ) , t h e r e w i l l be a second r i d g e o f wage modes a t t h e wage r a t e c o r r e s p o n d i n g t o %CPI. The f i r m ' s ( u n i o n ' s ) o p t i m a l wage o f f e r , i n t u r n , may be a s s o c i a t e d w i t h the r i d g e o f wage modes a t t h e wage r a t e c o r r e s p o n d i n g t o %CPI. In g e n e r a l , t h o u g h , i t i s e x p e c t e d t h a t w^* o r w u * w i l l c o r r e s p o n d t o the r i d g e o f wage modes t h a t c o r r e s p o n d t o r e -c e n t l y n e g o t i a t e d wage s e t t l e m e n t s , as e x p l a i n e d above. We i n c l u d e A W ^ / A W ^ here because c h i e f n e g o t i a t o r s f o r t h e f i r m and u n i o n presumably w i l l l o o k a t comparable, wage. settlements that were attained during past rounds of negotiation*., i n an attempt a t f o r e -c a s t i n g the outcome o f t h e i r c u r r e n t n e g o t i a t i o n s . I t i s assumed t h a t S e e , f o r e x a m p l e , S l o a n e and Whitney (1972, 2 7 1 - 2 7 4 ) . 71 t h e y use a m o d i f i e d (second) d e r i v a t i v e r u l e f o r f o r e c a s t i n g p u r p o s e s : ^ | A W T / A W T _ 1 -1 | . . . (21) E x p r e s s i o n (21) measures t h e e x t e n t t o which wage i n c r e a s e s ( o r d e -c r e a s e s ) remained c o n s t a n t d u r i n g t h e p a s t t h r e e rounds o f annual n e -g o t i a t i o n s . I n d e e d , t h e l a r g e r ( s m a l l e r ) i s e x p r e s s i o n (21) t h e g r e a t e r ( s m a l l e r ) i s t h e r a t e o f change o f wage i n c r e a s e s ( d e c r e a s e s ) . I t s h o u l d be p o i n t e d o u t t h a t A W ^ / A W ^ ( a n d , t h e r e f o r e , e x p r e s s i o n (21)) w i l l be c l o s e p r o x i e s f o r t h e r a t e o f change i n p e r c e n t a g e wage changes (and t h e i r d e v i a t i o n from 1 ) , i f wage r a t e s o r s a l a r i e s a r e s e v e r a l h u n d r e d - f o l d l a r g e r than one ( e . g . , 700<t/hr) and i f p e r c e n t a g e changes i n wage r a t e s a r e l e s s t h a n , s a y , t e n p e r c e n t — w h i c h i s what we o b s e r v e . E x p r e s s i o n ( 2 1 ) , i n e f f e c t , i s an i n d i c a t o r o f l a b o u r and management's e x p e c t a t i o n s c o n c e r n i n g f u t u r e wage i n c r e a s e s . Suppose t h a t p a s t r a t e s o f c h a n g e s , Aw^ and AW^_-|, were r o u g h l y t h e same. In o t h e r w o r d s , suppose t h a t e x p r e s s i o n (21) had a v a l u e v e r y c l o s e t o z e r o . In t h i s c a s e , i t i s assumed (1) t h a t t h e r e w i l l be a r e l a t i v e l y narrow d i s p e r s i o n o f each c o n d i t i o n a l p . d . f . , p n u ( w | s ; w f ) [ p n f (w|'s;w )_-, about i t s mode, w (w f ) and (2) t h a t t h e mode o f each p ( w | s ; w f ) iii • n u 'in •Mi n u I [ p n f ( w | s ; w u ) ] w i l l be h i g h e r than o t h e r w i s e . In s h o r t , t h e c h i e f n e g -o t i a t o r s f o r both s i d e s s h o u l d be more c e r t a i n as t o where t h e y m i g h t s e t t l e than o t h e r w i s e , CLzt. pan.. C o n v e r s e l y , i t i s assumed t h a t t h e more e x p r e s s i o n (21) d e v i a t e s from 1 , t h e w i d e r w i l l t h e d i s p e r s i o n o f each c o n d i t i o n a l p . d . f . , p p u ( w | s ; w f ) [ p n f ( w | s ; w u ) ] , about i t s mode, w n r n u ^ w rrrnf^ a n c l t h e l o w e r W l 1 1 b e t n e m o d e ° ^ e a c n p n u ( w l s ' w f ) [ p n f (w s ; w u ) ] . ^ O t h e r r u l e s such as t h e i n t e g r a l r u l e c o u l d have been used but were c o n s i d e r e d l e s s r e a l i s t i c than t h e d e r i v a t i v e r u l e . 72 T h i s means, i n t u r n , t h a t w f * (w * ) w i l l d e c r e a s e ( i n c r e a s e ) i n v a l u e , cet. pan.., as e x p r e s s i o n (2:1) i n c r e a s e s i n v a l u e and vice. veua. There a r e two r e a s o n s t h i s o c c u r s . F i r s t , p r o b a b i l i t y i s s h i f t e d away from the mode towards wage r a t e s a t which the NEB and NW f u n c t i o n s t a k e on h i g h e r v a l u e s , t h e r e b y i n c r e a s i n g the e x p e c t e d b e n e f i t s t h a t a r e a s s o c i a t e d w i t h t h e s e wage r a t e s . (See e q u a t i o n s (13) and ( 1 4 ) . ) S e c o n d , NW (NEB) i n c r e a s e s i n v a l u e as the wage r a t e d e c r e a s e s ( i n -c r e a s e s ) . (See e q u a t i o n s (5) and ( 1 1 ) . ) Four a d d i t i o n a l s t r i k e " d e t e r m i n a n t s " i n f l u e n c e t h e shape o f the u n i o n and f i r m p . d . f . s by a f f e c t i n g t h e l o c a t i o n o f t h e u n i o n and f i r m r u i n a t i o n c u r v e s . They i n c l u d e (1) the. normal note, n.etann, (2) the. unemployment hate, (3) Ke.ce.ntly negotiated companable wage settlements, and (4) the avenage age o£ the wonk ion.ee. The h i g h e r i s the normal r a t e o f r e t u r n , t h e l o w e r w i l l be t h e f i r m ' s r u i n a t i o n c u r v e a n d , t h e r e f o r e , i t s a b i l i t y t o p a y , and o b v e r s e l y . The l o w e r i s t h e unemployment r a t e o r t h e h i g h e r i s RNCWS, the h i g h e r w i l l be the u n i o n ' s r e s e r v a t i o n wage, w p , (as e x p l a i n e d above) a n d , c o n s e q u e n t l y , the h i g h e r w i l l be t h e u n i o n ' s r u i n a t i o n c u r v e and vice vensa. There may be a p o s i t i v e c o r r e l a t i o n between the unemployment r a t e and t h e normal r a t e o f r e t u r n , so t h a t i n c r e a s e s ( d e c r e a s e s ) i n the unemployment r a t e w i l l cause t h e f i r m ' s r u i n a t i o n c u r v e t o s h i f t downwards ( u p w a r d s ) . The g r e a t e r t h e average age o f t h e w o r k f o r c e , t h e s h o r t e r w i l l be the e a r n -41 i n g span f o r the w o r k f o r c e and o b v e r s e l y . I t s h o u l d be noted t h a t the 41 Changes i n the average age o f the w o r k f o r c e s h o u l d have an i n s i g n i f i c a n t impact on NEB ( i n c l u d i n g NEBQ ) . They i n f l u e n c e f u t u r e e a r n i n g s which o c c u r a t the end o f w o r k e r s ' e a r n i n g spans and whose d i s c o u n t e d p r e s e n t v a l u e , t h e r e f o r e , i s v e r y s m a l l . 73 f o u r f a c t o r s l i s t e d above are s h i f t parameters not o n l y f o r t h e u n i o n and f i r m r u i n a t i o n c u r v e s but a l s o f o r t h e i r net g a i n f u n c t i o n s . S i g -n i f i c a n t l y , changes i n any o f t h e f o u r s h i f t parameters w i l l cause b a r g a i n e r s t o r e a s s i g n p r o b a b i l i t i e s , as e x p l a i n e d a b o v e . The b i l a t e r a l o r t w o - s i d e d n a t u r e o f n e g o t i a t i o n s w i t h i n the c u r r e n t t h e o r y means t h a t l a b o u r and management jointly d e t e r m i n e t h e outcome o f n e g o t i a t i o n s . The c u r r e n t t h e o r y , however, i s an i n -d e t e r m i n a t e t h e o r y . I t i s i n d e t e r m i n a t e , p a r t l y due t o the e x i s t e n c e o f u n c e r t a i n t y a n d , i n t u r n , p a r t l y due t o the s u b j e c t i v e n a t u r e o f the u n i o n and f i r m p . d . f . s . I t i s p o s s i b l e t o i n d i c a t e how changes i n -t h e s t r i k e " d e t e r m i n a n t s " i n f l u e n c e b a r g a i n e r s ' d e c i s i o n f r a m e w o r k s , as e x p l a i n e d a b o v e . However, the i n d e t e r m i n a t e n a t u r e o f t h e c u r r e n t t h e o r y means t h a t we cannot p r e d i c t how changes i n any o f t h e s t r i k e " d e t e r m i n a n t s " w i l l i n f l u e n c e t h e d e c i s i o n t o s t r i k e o r t h e d e c i s i o n t o c o n t i n u e t o s t r i k e , i f a s t r i k e i s t a k i n g p a l c e . 2 . 3 E x t e n s i o n s and C o n t r i b u t i o n s At l e a s t two f e a t u r e s o f l a b o u r l e g i s l a t i o n o t h e r than the ones t h a t a l r e a d y a r e a p a r t o f t h e c u r r e n t t h e o r y can be b u i l t i n t o i t . The two f e a t u r e s i n v o l v e (1) s e c r e t s t r i k e b a l l o t s and (2) t h i r d -p a r t y i n t e r v e n t i o n . The g e n e r a l l a b o u r r e l a t i o n s laws o f B r i t i s h C o l u m b i a and s e v e r a l o t h e r Canadian j u r i s d i c t i o n s c a l l f o r s e c r e t s t r i k e v o t e s among u n i o n members and s e c r e t l o c k o u t v o t e s among em-p l o y e r s ' a s s o c i a t i o n s . They a l s o make p r o v i s i o n s f o r t h i r d - p a r t y i n -t e r v e n t i o n . Each u n i o n member c o n s t r u c t s and a p p l i e s the o b j e c t i v e f u n c t i o n t h a t was s e t out above. F o l l o w i n g Eaton (1972) l e t us assume 74 t h a t the e m p l o y e r ' s l a t e s t wage o f f e r s t i l l i s on the t a b l e . The u n i o n member v o t e s i n f a v o u r o f ( a g a i n s t ) s t r i k i n g i f t h e e x p e c t e d r e t u r n s from, s t r i k i n g , E R s u , exceed ( a r e l e s s than) the c e r t a i n r e t u r n s from a c c e p t i n g t h e e m p l o y e r ' s l a t e s t wage o f f e r , C R u . An i m p o r t a n t d i f f e r e n c e between t h i s d e c i s i o n r u l e and E a t o n ' s d e c i s i o n r u l e i s t h a t t h e d e c i s i o n r u l e i n c l u d e s p r o b a b i l i t i e s a n d , i n t u r n , i n v o l v e s 42 e x p e c t e d b e n e f i t s . F o l l o w i n g H i c k s ( 1 9 6 6 , 148) and S t e v e n s ( 1 9 6 8 , 7 5 ) , t h e r o l e t h a t m e d i a t o r s p l a y . i n the c u r r e n t t h e o r y i s i n a l t e r i n g the shapes o f the u n i o n and t h e f i r m p . d . f . s by f a c i l i t a t i n g the i n t e r -change o f i n f o r m a t i o n a t the b a r g a i n i n g t a b l e and by p r o p o s i n g f a c e -s a v i n g a l t e r n a t i v e s . I n t e r v e n t i o n by i n t e r e s t a r b i t r a t o r s o r c o n c i l i -a t i o n boards can be b u i l t i n t o the c u r r e n t t h e o r y , as w e l l . T y p i c a l l y , when b a r g a i n e r s p e r c e i v e t h a t i n t e r e s t a r b i t r a t o r s o r c o n c i l i a t i o n boards w i l l s p l i t t h e d i f f e r e n c e s between f i n a l o f f e r s by t h e u n i o n and f i r m , t h e c o n c e s s i o n a r y p r o c e s s i s b l u n t e d . B a r g a i n e r s h o l d back c o n c e s s i o n s . The h o l d i n g back o f c o n c e s s i o n s can be m o d e l l e d i n t h e c u r r e n t t h e o r y as f o l l o w s . The c h i e f n e g o t i a t o r f o r the f i r m ( u n i o n ) s h i f t s t h e r i d g e o f wage modes downwards ( u p w a r d s ) , because he c o n -s c i o u s l y o v e r - e s t i m a t e s how w e l l he m i g h t do through a r b i t r a t i o n o r b e -f o r e a c o n c i l i a t i o n b o a r d . T h i s c r e a t e s a n e g a t i v e c o n t r a c t z o n e , b l u n t i n g f u r t h e r c o n c e s s i o n - m a k i n g , e v e r y t h i n g e l s e t h e same. However, 42 I n c i d e n t a l l y , a f i r m t h a t belonged t o an e m p l o y e r s ' a s s o -c i a t i o n c o u l d a p p l y t h e f i r m ' s d e c i s i o n framework i n an a n a l o g o u s manner d u r i n g a l o c k o u t v o t e among the members o f t h e e m p l o y e r s ' a s s o c i a t i o n . 75 the t h r e a t o f a r b i t r a t i o n , which i s i n t e n d e d t o s i m u l a t e t h e t h r e a t o f t h e s t r i k e i n c o n v e n t i o n a l c o l l e c t i v e b a r g a i n i n g , may cause him t o r e -v i s e h i s e x p e c t a t i o n s as t o how w e l l he might f a r e t h r o u g h a r b i t r a t i o n . The t h r e a t o f e s t a b l i s h i n g a c o n c i l i a t i o n board may have an analogous e f f e c t . L o n g - t e r m s t r i k e - a s - a n - i n v e s t m e n t b e h a v i o u r c o u l d be b r o u g h t not o n l y i n t o the u n i o n and f i r m p . d . f . s but a l s o i n t o b a r g a i n e r s ' n e t -g a i n f u n c t i o n s . C o n c e p t u a l l y , the c a p i t a l i z e d f u t u r e b e n e f i t s t h a t b a r g a i n e r s would d e r i v e from each c u r r e n t outcome c o u l d be added onto the NEB and NW f u n c t i o n s . However, t h i s i s not a s i m p l e m a t t e r t o i m -p l e m e n t . The c u r r e n t t h e o r y s u g g e s t s what m i g h t be a f r u i t f u l e m p i r i c a l endeavour. The e m p i r i c a l endeavour i s t o s t u d y t h e manner i n which (1) c h i e f n e g o t i a t o r s c o n s t r u c t ( o r might c o n s t r u c t ) t h e s u b j e c t i v e 43 j o i n t p . d . f . s and (2) the p . d . f . s change d u r i n g a c t u a l n e g o t i a t i o n s . The c u r r e n t t h e o r y p o r t r a y s — h o p e f u l l y i n a p l a u s i b l e manner— the way i n which s e l e c t e d economic v a r i a b l e s m i g h t i n f l u e n c e , i n p a r t , t h e joint p r o c e s s whereby wages a r e d e t e r m i n e d , a l o n g w i t h t h e d u r a t i o n o f s t r i k e a c t i v i t y . The economic v a r i a b l e s t h a t t h e t h e o r y f o c u s s e s on i n c l u d e t h e f o l l o w i n g : the unemployment r a t e ( U ) , r e c e n t changes i n the consumer p r i c e i n d e x (%CPI), t h e r a t e o f i n c r e a s e i n comparable wage s e t t l e m e n t s d u r i n g p a s t n e g o t i a t i o n s (|AW^.// Aw^_-j - l | ) , t h e average age o f t h e w o r k f o r c e ( A ) , the f i r m ' s a b i l i t y t o pay ( o r p r o f i t s , P ) , and r e c e n t l y n e g o t i a t e d comparable wage s e t t l e m e n t s (RNCWS). 43 S e e , f o r e x a m p l e , S p e t l e r and S t a e l von H o l s t e i n ( 1 9 7 5 ) . 76 The main c o n t r i b u t i o n o f t h i s t h e o r y i s t h a t i t p r o v i d e s a broad c o n c e p t u a l framework f o r p o r t r a y i n g and a n a l y z i n g c o l l e c t i v e b a r -g a i n i n g . I n d e e d , s e v e r a l b a r g a i n i n g models which preceded the c u r r e n t one appear t o be submodels o f the c u r r e n t one. F o r e x a m p l e , the J o h n s t o n and R a b i n o v i t c h and Swary t h e o r i e s i n v o l v e n e t - g a i n f u n c t i o n s which a r e s i m i l a r t h o s e o f t h e c u r r e n t t h e o r y . M o r e o v e r , t h e y i n c l u d e ' c u m u l a t i v e p r o b a b i l i t y d i s t r i b u t i o n s which can be d e r i v e d m a r g i n a l T y from t h e f i r m and u n i o n p . d . f . s i n our f o r m u l a t i o n . (See Appendix A . ) The d e c i s i o n - m a k i n g p r o c e s s o f t h e . c u r r e n t t h e o r y w h i c h s i m u l t a n e o u s l y compares t h e e x p e c t e d r e t u r n s o f t h r e e o p t i o n s extends the t w o - s t e p d e c i s i o n - m a k i n g p r o c e s s found i n J o h n s t o n ' s t h e o r y . The t h r e e - d i m e n s i o n a l d e c i s o n - m a k i n g o f t h e c u r r e n t model seems t o improve on t h e t w o - d i m e n s i o n a l d e c i s i o n - m a k i n g o f the J o h n s t o n and R a b i n o v i t c h and Swary m o d e l s . In p a r t i c u l a r , J o h n s t o n ' s and R a b i n o v i t c h and S w a r y ' s b a r g a i n e r s r e l y i n t h e i r d e c i s i o n - m a k i n g upon a s i n g l e e x p e c t e d c o n c e s s i o n c u r v e which i s d e r i v e d r a t h e r a r t i f i c i a l l y . Our b a r g a i n e r s c o n s i d e r an i n f i n i t e number o f p o s s i b l e paths i n t h e i r d e c i s i o n - m a k i n g and use s u b j e c t i v e p . d . f . s which h o p e f u l l y a r e r e a s o n -a b l y w e l l m o t i v a t e d . The c u r r e n t t h e o r y a l s o c o u l d c o l l a p s e i n t o a t w o - d i m e n s i o n a l t h e o r y l i k e the t h e o r y o f p r e - s t r i k e n e g o t i a t i o n s t h a t Walton and M c K e r s i e propounded. I n d e e d , t h e c o n t r a c t zones o f t h i s t h e o r y r e -s e m b l e , and were s u g g e s t e d b y , Walton and M c K e r s i e ' s c o n t r a c t z o n e s . Though a p p a r e n t l y l e s s w e l l - f o r m a l i z e d , t h e e x p e c t e d r e t u r n c a l c u l a t i o n s t h a t Walton and M c K e r s i e ' s b a r g a i n e r s make resemble the ones our b a r -g a i n e r s make. 77 A n o t h e r c o n t r i b u t i o n o f the c u r r e n t t h e o r y i s t h a t , l i k e t h e Walton and M c K e r s i e t h e o r y , i t embodies c e r t a i n i n s t i t u t i o n a l i n -f l u e n c e s on c o l l e c t i v e b a r g a i n i n g . They i n c l u d e the p a r t i e s ' p a s t h i s t o r y o f n e g o t i a t i o n s , b a r g a i n e r s ' s u b j e c t i v e e s t i m a t e s o f the i m -p a c t o f t h e i r b a r g a i n i n g s k i l l s on n e g o t i a t i o n s , s t r i k e - w a g e outcomes e l s e w h e r e , and t h e e x i s t e n c e / n o n - e x i s t e n c e o f d e f e n c e f u n d s . 2.11 C o n c l u s i o n We f o r m u l a t e d a broad c o n c e p t u a l framework which h o p e f u l l y p r o v i d e s r e a l i s t i c i n s i g h t s c o n c e r n i n g (1) t h e c o l l e c t i v e b a r g a i n i n g p r o c e s s a n d , i n p a r t i c u l a r , t h e r o l e o f t h e s t r i k e ( o r s t r i k e t h r e a t ) i n b r e a k i n g i m p a s s e s , (2) economic v a r i a b l e s and i n s t i t u t i o n a l f a c t o r s which i n f l u e n c e t h e c o l l e c t i v e b a r g a i n i n g p r o c e s s and (3) t h e manner i n which l a b o u r l e g i s l a t i o n impinges upon and a f f e c t s the c o l l e c t i v e b a r g a i n i n g p r o c e s s . The economic " d e t e r m i n a n t s " o f s t r i k e a c t i v i t y t h a t t h e c u r r e n t t h e o r y s u g g e s t e d w i l l be a p p l i e d e m p i r i c a l l y i n C h a p t e r 4 . I t i s i n t e n d e d t h a t C h a p t e r 3 e s t a b l i s h t h e e m p i r i c a l background f o r t h e f i n d i n g s o f t h e r e g r e s s i o n a n a l y s i s t h a t a r e p r e s e n t e d i n C h a p t e r 4 . C h a p t e r 3 f o c u s e s on the l a b o u r l e g i s l a t i o n - s t r i k e r e l a t i o n s h i p . 78 CHAPTER 3 PUBLIC POLICY AND THE RESOLUTION OF INDUSTRIAL DISPUTES THROUGH STRIKE ACTION IN BRITISH COLUMBIA 1945-75 The f o c u s o f t h i s c h a p t e r i s on p u b l i c p o l i c y and the r e s o l u -t i o n o f i n d u s t r i a l c o n f l i c t s through s t r i k e a c t i o n . I t w i l l b e g i n w i t h an e x p l a n a t i o n o f changes i n the p o l i c i e s t h a t B r i t i s h Columbia i n s t i t u t e d f o r r e g u l a t i n g c o l l e c t i v e b a r g a i n i n g and s t r i k e a c t i v i t y . F e a t u r e s o f s t r i k e a c t i v i t y i n B r i t i s h Columbia w i l l be d i s c u s s e d n e x t . S i g n i f i c a n t l y , s t r i k e a c t i v i t y w i l l be c l a s s i f i e d a c c o r d i n g to c o n t r a c t s t a t u s : f i r s t agreement, c o n t r a c t renewal and d u r i n g the t e r m . Then, f o u r s e l e c t e d i s s u e s o f p u b l i c p o l i c y and s t r i k e a c t i v i t y w i l l be d i s c u s s e d . Three o f the i s s u e s c o n c e r n (1) the l e g a l i t y o f s t r i k e a c t i v i t y , (2) the e x t e n t to w h i c h governments o f B r i t i s h Columbia have i n t e r v e n e d to end s t r i k e s and (3) the n a t u r e o f w i l d c a t s t r i k e s and p o s s i b l e e x p l a n a t i o n s o f such s t r i k e s . The f o u r t h i s s u e i s whether f i r s t agreement s t r i k e s , c o n t r a c t renewal s t r i k e s and s t r i k e s d u r i n g the term d i f f e r i n k i n d o r i n d e g r e e . I f they d i f f e r i n k i n d f o r B r i t i s h C o l u m b i a , i t c a s t s some doubt on the v a l i d i t y o f p o l i c y p r e s c r i p t i o n s which were based on s t u d i e s o u t s i d e B r i t i s h Columbia where t h e t h r e e s t r i k e s e r i e s were p o o l e d i n t o one s e t o f s t r i k e d a t a . 79 3.1 Changes i n t h e General Labour R e l a t i o n s o f  B r i t i s h Columbia : 1945-75 There w e r e , p e r h a p s , t h r e e key t r e n d s t o t h e e v o l u t i o n o f the g e n e r a l l a b o u r r e l a t i o n s s t a t u t e s o f B r i t i s h Columbia from 1945 t h r o u g h 1975.^ F i r s t , t h e s e s t a t u t e s changed w i t h r e s p e c t t o what c o n s t i t u t e d l a w f u l , as opposed t o u n l a w f u l a c t i v i t y , and t h e methods f o r d e a l i n g w i t h u n l a w f u l a c t i v i t y . For i n s t a n c e , t h e d e f i n i t i o n o f l a w f u l p i c k e t i n g was e x p a n d e d , l e s s l i t i g a t i o n took p l a c e and fewer f i n e s were l e v i e d a g a i n s t u n l a w f u l s t r i k e a c t i v i t y d u r i n g 1974-75 than b e f o r e . S e c o n d , accommodative modes o f t h i r d - p a r t y i n t e r v e n t i o n g e n e r a l l y s u p p l a n t e d n o r m a t i v e ( o r a d j u d i c a t i v e ) modes o f t h i r d - p a r t y i n t e r v e n t i o n by 1975. The l a t t e r ( i n c l u d i n g , e . g . , a r b i t r a t i o n ) i n v o l v e c o u r t - l i k e p r o c e e d i n g s and t h e i s s u a n c e o f awards by d i s i n t e r e s t e d t h i r d p a r t i e s . T h u s , t h e y f u n c t i o n o u t -s i d e the c o l l e c t i v e b a r g a i n i n g p r o c e s s . By c o n t r a s t , t h e f o r m e r ( i n c l u d i n g , e . g . , m e d i a t i o n ) o p e r a t e w i t h i n — a n d a r e i n t e n d e d t o f a c i l i t a t e — t h e c o l l e c t i v e b a r g a i n i n g p r o c e s s . T h i r d , governments o f B r i t i s h Columbia a p p l i e d a m o d i f i e d " a r s e n a l o f weapons" p h i l o s o p h y o f t h i r d p a r t y i n t e r v e n t i o n t h r o u g h o u t t h e 1974-75 p e r i o d . 2 That i s , they g e n e r a l l y kept i n r e a d i n e s s c e r t a i n weapons ( e . g . , t r u s t e e s h i p , s e i z u r e , h i g h - l e v e l m e d i a t i o n , and b a c k - t o - w o r k l e g i s -l a t i o n ) , and t h e y i n v o k e d them "as a l a s t r e s o r t " . ^See Appendix B f o r a c h r o n o l o g i c a l , more d e t a i l e d e x p l a n a t i o n o f t h e manner i n w h i c h t h e g e n e r a l l a b o u r r e l a t i o n s s t a t u t e s o f B r i t i s h Columbia c h a n g e d . 2 The f e d e r a l government r e g u l a t e d l a b o u r r e l a t i o n s i n B r i t i s h Columbia from 1945 to t h e end o f the f i r s t h a l f o f 1947. 80 The g e n e r a l l a b o u r r e l a t i o n s laws d e c l a r e d t h a t a l l s t r i k e s d u r i n g t h e term were u n l a w f u l . They a l s o e s t a b l i s h e d c e r t a i n p r e -c o n d i t i o n s which were t o be met b e f o r e a s t r i k e a r i s i n g o u t o f c o n -t r a c t n e g o t i a t i o n s would c o n s t i t u t e a l a w f u l s t r i k e . The p r e c o n -d i t i o n s changed o v e r t i m e . At a minimum a c o n t r a c t n e g o t i a t i o n s s t r i k e would be an u n l a w f u l s t r i k e i f any o f t h e c o l l e c t i v e b a r -g a i n i n g p r o c e d u r e s t h a t f o l l o w were not met: ( i ) n o t i c e t o commence n e g o t i a t i o n s had not been s e r v e d o r i t had not been s e r v e d w i t h i n a s e t t i m e p e r i o d ; ( i i ) t h e c o n c i l i a t i o n o f f i c e r , m e d i a t i o n o f f i c e r , o r c o n c i l i a t i o n b o a r d had not "booked o f f " o f f i c i a l l y from t h e d i s p u t e ; ( i i i ) a s e c r e t s t r i k e o r l o c k o u t v o t e had not been h e l d . 3 ( i v ) s t r i k e o r l o c k o u t n o t i c e had not been s e r v e d o r t h e s t r i k e commenced d u r i n g t h e 48 o r 72 hours o f " g r a c e " t h a t was t o f o l l o w t h e s e r v i n g o f n o t i c e t o s t r i k e o r l o c k o u t . From 1945 t h r o u g h 1972 t h e p r e c o n d i t i o n s f o r l a w f u l s t r i k e a c t i o n a l s o i n c l u d e d c o m p l i a n c e w i t h c o m p u l s o r y t w o - s t a g e c o n c i l i a t i o n p r o c e d u r e s and r e q u e s t s t h a t g o v e r n m e n t - s u p e r v i s e d s t r i k e o r l o c k -o u t v o t e s be c o n d u c t e d . 4 L o c k o u t v o t e s must be c o n d u c t e d among t h o s e f i r m s t h a t b e l o n g to an e m p l o y e r s ' a s s o c i a t i o n . O b v i o u s l y , an employer who does not b e l o n g to an e m p l o y e r s ' a s s o c i a t i o n need not c o n d u c t a l o c k o u t v o t e . 4 For a d i s c u s s i o n o f t h e r e l a t i o n s h i p between government-s u p e r v i s e d v o t e s and s t r i k e a c t i v i t y , see Anton (1975) o r Appendix B, 221-222: 81 The a c t s s p e l l e d o u t p e n a l t i e s f o r u n l a w f u l s t r i k e a c t i o n , and r e m e d i a l a c t i o n c o u l d be g a i n e d e i t h e r through the c o u r t s y s t e m ( p r o v i d i n g i n some i n s t a n c e s , t h a t c o n s e n t to p r o s e c u t e had been g r a n t e d ) o r through the B . C . Labour R e l a t i o n s B o a r d . C o u r t s d e -t e r m i n e d the l e g a l i t y o r i l l e g a l i t y o f s t r i k e s , i s s u e d i n j u n c t i o n s c o n c e r n i n g p i c k e t i n g and p r e s c r i b e d r e m e d i a l measures from 1945 through 1974. P u n i t i v e measures were the p r i m a r y method by which governments o f B . C . d e a l t w i t h u n l a w f u l s t r i k e a c t i v i t y , p a r t i c u l a r l y s t r i k e s d u r i n g the t e r m , a t t h i s t i m e . For i n s t a n c e , governments e n a c t e d l e g i s l a t i v e changes (1) w h i c h i n c r e a s e d the amount o f f i n e s t h a t c o u l d be l e v i e d a g a i n s t u n l a w f u l s t r i k e r s (1947, 1954 and 1 9 5 9 ) ; (2) which empowered the m i n i s t e r o f l a b o u r to d e c e r t i f y a union t h a t s t r u c k i l l e g a l l y ( 1 9 5 4 ) ; and (3) which r e q u i r e d " t h a t union o f f i c i a l s prove they had not c a l l e d w i l d c a t s t r i k e s and which p e r m i t t e d employers to t a k e c i v i l a c t i o n a g a i n s t unions t h a t s t r u c k u n l a w f u l l y ( i n 1 9 5 9 ) . S i n c e 1974, the B . C . Labour R e l a t i o n s Board has e x e r c i s e d n e a r l y a l l o f the r e s p o n s i b i l i t i e s c o n c e r n i n g s t r i k e s , l o c k o u t s and p i c k e t i n g t h a t the c o u r t s f o r m e r l y e x e r c i s e d . S i g n i f i -S e e , f o r e x a m p l e , C a r r o t h e r s (1959) o r C a r r o t h e r s (1954) 6 See I n t e r n a t i o n a l Labour Committee, S e c t i o n o f Labour R e l a t i o n s Law, American Bar A s s o c i a t i o n , 1977, 113-114; C a r t e r , 1976, 6 - 7 , a n d . W e i l e r , 1976, 77-79. 82 c a n t l y , t h e B . C . Labour R e l a t i o n s Board a t t e m p t s t o e f f e c t the r e s o l u t i o n o f i n d u s t r i a l d i s p u t e s t h r o u g h a c c o m o d a t i v e modes o f t h i r d p a r t y i n t e r v e n t i o n ( e . g . , send o u t i n d u s t r i a l r e l a t i o n s o f f i c e r s to mediate d i s p u t e s ) . However, the p r e c e d e n t f o r s e n d i n g o u t f i e l d o f f i c e r s to i n t e r v e n e i n r i g h t s d i s p u t e s was f i r s t e s t a b l i s h e d i n an amendment o f 1963 to t h e Labour R e l a t i o n s A c t . 1 The Labour R e l a t i o n s Board o f B r i t i s h Columbia g e n e r a l l y eschewed l i t i g i o u s s o l u t i o n s s i n c e 1974. N e v e r t h e l e s s , i t d i d e x e r -c i s e i t s r e s p o n s i b i l i t i e s i n i n t e r p r e t i n g and a p p l y i n g t h e s e c t i o n s o f the r e l e v a n t l e g i s l a t i o n t h a t d e a l t w i t h u n l a w f u l s t r i k e a c t i v i t y and i t l e v i e d f i n e s — p a r t i c u l a r l y i f the law was f l a u n t e d . ^ Two-stage c o n c i l i a t i o n , a mandatory s t a t u t o r y p r e c e d e n t t o l a w f u l s t r i k e a c t i o n , was t h e p r i m a r y mode o f t h i r d p a r t y i n t e r v e n t i o n i n t o c o n t r a c t d i s p u t e s i n B r i t i s h Columbia from 1945 t h r o u g h 1972. A c o n c i l i a t i o n o f f i c e r i n t e r v e n e d d u r i n g t h e f i r s t s t a g e , w h i l e a c o n c i l i a t i o n board i n t e r v e n e d d u r i n g t h e second s t a g e o f the c o m p u l s o r y c o n c i l i a t i o n p r o c e d u r e s . The c o n c i l i a t i o n o f f i c e r t y p i c a l l y used accommodative i n t e r v e n t i o n : m e d i a t i o n . By c o n t r a s t , t h e c o n c i l i a t i o n board used n o r m a t i v e ( o r a d j u d i c a t i v e ) 9 i n t e r v e n t i o n : f a c t - f i n d i n g and p r o p o s i n g a c o n t r a c t s e t t l e m e n t . ' S e e Labour R e l a t i o n s Amendment A c t , 1 9 6 3 , S . B . C . 1 9 6 3 , c . 2 0 , s . 3 and see Appendix B, 2 3 0 - 2 3 1 . o S e e , f o r i n s t a n c e , W e i l e r , 1977, 6 6 - 7 1 , and C a r t e r , 1976, 7. g The t e r m s , accommodative" and " n o r m a t i v e " t h i r d - p a r t y i n t e r v e n t i o n were d e f i n e d a b o v e . They a r e d e f i n e d and d i s c u s s e d i n g r e a t e r d e p t h i n Appendix A , as w e l l . 83 (See Woods, 1973, 1 5 7 - 1 5 9 . ) The p r o c e d u r e s f o r compulsory two-s t a g e c o n c i l i a t i o n v a r i e d o v e r the 1945-72 time p e r i o d . D u r i n g the f i r s t d e c a d e , ad hoc c o n c i l i a t i o n boards were s e t up p r a c t i c a l l y a u t o m a t i c a l l y , and the boards g e n e r a l l y i s s u e d p r o p o s e d s e t t l e m e n t s to the p a r t i e s . However, the v i r t u a l c e r t a i n t y t h a t a b o a r d would be e s t a b l i s h e d o f t e n caused the p a r t i e s to b a r g a i n very l i t t l e i n a n t i c i p a t i o n o f a b o a r d award. I f management and l a b o u r e x p e c t e d t h a t the boards would s p l i t - t h e - d i f f e r e n c e , they would make e x a g g e r a t e d o f f e r s and few c o n c e s s i o n s - d u r i n g nego-t i a t i o n s . Whenever b a r g a i n e r s t e n a c i o u s l y h e l d back c o n c e s s i o n s so t h a t a c o n c i l i a t i o n b o a r d would be e s t a b l i s h e d , they b l u n t e d the c o n c i l i a t i o n o f f i c e r ' s r o l e o f p r o m o t i n g c o n c e s s i o n a r y b e h a v i o u r a t the b a r g a i n i n g t a b l e , f o r the c o n c i l i a t i o n o f f i c e r ' s main t o o l i s p e r s u a s i o n . C o n c i l i a t i o n board r e p o r t s were f o r w a r d e d a u t o m a t i c a l l y to the p a r t i e s . Sometimes the s e t t l e m e n t s proposed i n c o n c i l i a t i o n board r e p o r t s f o r m e d , t h e b a s i s f o r s e t t l e m e n t . By c o n t r a s t , when one s i d e o r both s i d e s r e j e c t e d t h e s e p r o p o s e d s e t t l e m e n t s , c o n c i l i a t i o n b o a r d r e p o r t s may have had the e f f e c t o f p r o l o n g i n g i n d u s t r i a l d i s -p u t e s , s i n c e the proposed s e t t l e m e n t s e s t a b l i s h e d t a r g e t s which both s i d e s s o u g h t to improve upon. The compulsory t w o - s t a g e c o n c i l i a t i o n p r o c e d u r e s were m o d i f i e d i n 1954, i n o r d e r to p r o v i d e the c o n c i l i a t i o n o f f i c e r w i t h more power f o r e f f e c t i n g a s e t t l e m e n t . C o n c i l i a t i o n o f f i c e r s were to recommend to the m i n i s t e r o f l a b o u r whether o r n o t c o n -c i l i a t i o n boards s h o u l d be e s t a b l i s h e d . The m i n i s t e r o f l a b o u r 84 c o u l d e x e r c i s e h i s d i s c r e t i o n i n e s t a b l i s h i n g c o n c i l i a t i o n boards and i n f o r w a r d i n g c o n c i l i a t i o n r e p o r t s t o t h e p a r t i e s . ^ T h u s , the e s t a b l i s h m e n t o f a c o n c i l i a t i o n board and the i s s u a n c e o f c o n c i l -i a t i o n r e p o r t s became l e s s c e r t a i n than b e f o r e . M o r e o v e r , t h e c o n -c i l i a t i o n o f f i c e r c o u l d use the t h r e a t not t o recommend t h e e s t a b l i s h -ment o f a c o n c i l i a t i o n b o a r d , t o i n d u c e l a b o u r and management t o make 11 c o n c e s s i o n s . I f a c o n c i l i a t i o n board were not e s t a b l i s h e d , the p a r t i e s c o u l d reach the d e a d l i n e f o r a l a w f u l s t r i k e o r l o c k o u t v e r y soon a f t e r the c o n c i l i a t i o n o f f i c e r completed h i s a p p o i n t m e n t . The t w o - s t a g e c o n c i l i a t i o n p r o c e d u r e s g r a d u a l l y were t r a n s f o r m e d t h r o u g h t h i s m o d i f i c a t i o n . I t became l e s s c e r t a i n o v e r t i m e t h a t c o n c i l i a t i o n would i n v o l v e both s t a g e s , as c o n c i l i a t i o n boards f e l l i n t o d i s u s e 1 d u r i n g t h e 1950s and p a r t i c u l a r l y d u r i n g the 1960s i n B r i t i s h C o l u m b i a . In 1968 a permanent t r i b u n a l was e s t a b l i s h e d t o r e p l a c e t h e ad hoc c o n c i l i a t i o n boards as the second s t a g e o f t h e c o n c i l i a t i o n p r o c e s s . In a d d i t i o n , t h e c o n c i l i a t i o n p r o c e s s became v o l u n t a r y . In o t h e r w o r d s , l a b o u r o r management c o u l d u n i l a t e r a l l y r e q u e s t t h a t t h e y be a s s i g n e d a m e d i a t i o n o f f i c e r (as c o n c i l i a t i o n o f f i c e r s became known). The m i n i s t e r o f l a b o u r , however, c o u l d o r d e r t h a t a m e d i a t i o n o f f i c e r be a p p o i n t e d i f he deemed i t i n t h e p u b l i c i n t e r e s t . But the m i n i s t e r d i d so o n l y r a r e l y . F o l l o w i n g m e d i a t i o n the permanent 10 Labour R e l a t i o n s A c t , S t a t u t e s o f B r i t i s h Columbia 1954, c . 12, s s . 2 6 - 3 1 . 11 The t h r e a t o f the s t r i k e and s t a t u t o r y d e a d l i n e p r o c e d u r e s f o r c o l l e c t i v e b a r g a i n i n g , make c o l l e c t i v e b a r g a i n i n g w o r k . The s t r i k e o r s t r i k e t h r e a t can be p a r t i c u l a r l y e f f e c t i v e i n g e n e r a t i n g c o n c e s -s i o n a r y behavour a t t h e b a r g a i n i n g t a b l e s i n c e s t r i k e a c t i o n imposes c o s t s on both l a b o u r and management. 12 S e e , f o r e x a m p l e , Woods, 1973, and J a m i e s o n , 1968, 3 8 4 - 8 5 . 85 t r i b u n a l a d j u d i c a t e d the d i s p u t e , handing down a proposed s e t t l e m e n t . The proposed s e t t l e m e n t was n o t b i n d i n g , u n l e s s the p a r t i e s a g r e e d to be bound by i t o r the c a b i n e t o r d e r e d t h a t they be bound by i t because i t was i n the p u b l i c i n t e r e s t to do s o . The r o u t e o f m e d i a t i o n o f f i c e r - t r i b u n a l a d j u d i c a t i o n was t h e o n l y p r o c e d u r e f o r t h i r d - p a r t y i n t e r v e n t i o n i n t o c o n t r a c t d i s p u t e s t h a t the r e l e v a n t s t a t u t e s p e l l e d o u t . (See H e r b e r t (1968) and Appendix B , 2 3 3 t 2 3 6 . ) The permanence o f the t r i b u n a l , t h e c o n t r o v e r s y t h a t s u r r o u n d e d the e s t a b l i s h m e n t o f the t r i b u n a l and c o n t r o v e r s i a l f e a t u r e s o f i t s i n i t i a l d e c i s i o n s were s e v e r a l o f the f a c t o r s t h a t l e a d to the t r i b u n a l ' s l o s i n g c r e d i b i l i t y b e f o r e the p u b l i c and to i t s b e i n g b o y c o t t e d by o r g a n i z e d l a b o u r i n B r i t i s h C o l u m b i a . M o r e o v e r , the Government o f B r i t i s h .Columbia b y - p a s s e d the t r i b u n a l to r e s o l v e s e v e r a l c o n t r a c t d i s p u t e s which i t c o n s i d e r e d to i n v o l v e a h i g h degree o f p u b l i c i n t e r e s t . For i n s t a n c e , i t a p p o i n t e d s p e c i a l m e d i a t o r s to r e s o l v e s e v e r a l i n t e r e s t d i s p u t e s i n t h e f o r e s t p r o d u c t s i n d u s t r y (see J a m i e s o n , , 1975, 1 2 9 . ) T h u s , to the e x t e n t t h a t the t r i b u n a l was b o y c o t t e d and b y - p a s s e d , the c o n c i l i a t i o n p r o c e d u r e s amounted to v o l u n t a r y m e d i a t i o n from 1968 through 1972. The g e n e r a l l a b o u r r e l a t i o n s laws o f B r i t i s h Columbia p r e s c r i b e d v o l u n t a r y m e d i a t i o n as the p r i m a r y method f o r r e s o l v i n g p r e - s t r i k e c o n t r a c t d i s p u t e s from t h e end o f 1972 t h r o u g h 1975. 86 However, the m i n i s t e r o f l a b o u r c o u l d o r d e r t h a t the p a r t i e s to a 13 i n t e r e s t d i s p u t e submit to m e d i a t i o n . In a d d i t i o n , the Government o f B r i t i s h Columbia f r e q u e n t l y e s t a b l i s h e d v e h i c l e s f o r h i g h - l e v e l m e d i a t i o n — i n d u s t r i a l i n q u i r y c o m m i s s i o n s — t o r e s o l v e i n t e r e s t d i s p u t e s i n v o l v i n g a h i g h degree o f p u b l i c i n t e r e s t d u r i n g 1974 and 1 9 7 5 . 1 4 One o f the s t a t u t o r y changes t h a t took e f f e c t i n B r i t i s h Columbia d u r i n g t h e 1970s seemed t o . r u n c o u n t e r to the g e n e r a l s h i f t f r o m - c o m p u l s i o n to v o l u n t a r i s m . The Labour Code o f B r i t i s h C o l u m b i a , w h i c h was e n a c t e d i n 1973, c a l l e d f o r f i r s t c o n t r a c t a r b i t r a t i o n , i f l a b o u r and management c o u l d n o t r e s o l v e t h e i r d i f f e r e n c e s . , ( T h i s was the f i r s t North American s t a t u t e c o n t a i n i n g such a p r o v i s i o n . ) , F i r s t agreement a r b i t r a t i o n was i n t e n d e d m a i n l y as a 15 r e m e d i a l a c t i o n a g a i n s t b a r g a i n i n g i n "bad f a i t h . " The B . C . Labour R e l a t i o n s Board a d m i n i s t e r e d f i r s t c o n t r a c t a r b i t r a t i o n . I t was v e r y r e l u c t a n t to p e r m i t l a b o u r and management to s h i r k t h e i r b a r g a i n i n g r e s p o n s i b i l i t i e s o r to a v o i d economic w a r f a r e by p e r m i t t i n g them to submit to t h e i r f i r s t c o n t r a c t d i s p u t e to See M e d i a t i o n S e r v i c e s A c t , S . B . C . 1972 (2nd S e s s . ) , c . 2 6 , s . 11(2) and Labour Code o f B r i t i s h C o l u m b i a , S . B . C . 1973 (2nd S e s s . ) , c . 122, s . 6 9 ( 2 ) . 14 See M a t k i n , 1975, 9 4 - 9 8 , and Labour Code o f B r i t i s h C o l u m b i a , S . B . C . 1973 (2nd S e s s . ) , c . 122, s . 122. l 5 S e e , f o r e x a m p l e , A r t h u r s , 1975, 291-292 and W e i l e r , 1976, 77. 87 a r b i t r a t i o n . M o r e o v e r , i t a t t e m p t e d t o i n d u c e l a b o u r and management t o n e g o t i a t e as much o f t h e i r f i r s t agreement as p o s s i b l e . ^ Governments o f B r i t i s h Columbia p r a c t i s e d a m o d i f i e d v e r s i o n o f the a r s e n a l o f weapons p h i l o s o p h y . T h i s p h i l o s o p h y i n v o l v e s l e a v i n g many, i f not a l l , modes o f t h i r d - p a r t y i n t e r v e n t i o n o u t o f l a b o u r s t a t u t e s and seldom i n v o k i n g t h e weapons t h a t were not i n c l u d e d i n l a b o u r s t a t u t e s . I t i s i n t e n d e d t o f o s t e r s e l f - r e l i a n t d i s p u t e r e s o l u t i o n between l a b o u r and management, s i n c e i t s h o u l d g e n e r a t e extreme u n c e r t a i n t y as t o (1) whether o r not t h i r d p a r t i e s — i n c l u d i n g t h e g o v e r n m e n t — w i l l i n t e r v e n e i n t o i n d u s t r i a l d i s p u t e s and (2) what k i n d o f t h i r d - p a r t y i n t e r v e n t i o n t h e r e w i l l be ( i f any a t a l l ) . As was t h e p r a c t i c e i n o t h e r Canadian j u r i s d i c t i o n s , Governments o f B r i t i s h Columbia p r a c t i c e d t h i s p h i l o s o p h y w i t h r e s p e c t t o such t h i n g s as " d e p a r t m e n t a l m e d i a t i o n " ( i . e . , m e d i a t i o n by l a b o u r department . o f f i c i a l s ) , s e i z u r e , t r u s t e e s h i p and b a c k - t o - w o r k l e g i s l a t i o n . The l a t t e r were not i n c l u d e d i n l a b o u r s t a t u t e s ; t h e y were i n v o k e d on an ad hoc b a s i s ; and t h e y were seldom i n v o k e d . Governments o f B r i t i s h Columbia m o d i f i e d the a r s e n a l o f weapons p h i l o s o p h y , t o t h e e x t e n t t h a t l a b o u r s t a t u t e s o f B r i t i s h • Columbia p r o v i d e d f o r and encouraged c o n v e n t i o n a l m e d i a t i o n o f i n t e r e s t See I n t e r n a t i o n a l Labor- Law Committee, 1977, 1 0 2 - 1 0 3 , and W e i l e r , 1976, 77, and see Appendix B , 239. 88 d i s p u t e s a n d , m o r e o v e r , t o t h e e x t e n t t h a t t h e y p r o v i d e d f o r forms o f h i g h l e v e l m e d i a t i o n , such as i n d u s t r i a l i n q u i r y c o m m i s s i o n s , as e x -p l a i n e d a b o v e . Governments o f B r i t i s h Columbia a l s o e s t a b l i s h e d a machinery o f t h i r d - p a r t y i n t e r v e n t i o n f o r r e s o l v i n g w i l d c a t s t r i k e s , and towards t h e end o f 1945-75 t h e y p r o v i d e d f o r f i r s t c o n t r a c t a r b i t r a t i o n , as e x p l a i n e d a b o v e . Such m o d i f i c a t i o n s o f t h e a r s e n a l o f weapons t h e o r y seem t o r e f l e c t t h e f a c t t h a t Canadian g o v e r n m e n t s , i n c l u d i n g Governments o f B r i t i s h C o l u m b i a , t r a d i t i o n a l l y have been more i n c l i n e d t o p r o v i d e f o r s t a t u t o r y modes o f i n t e r v e n t i o n i n t o i n d u s t r i a l : ! d i s p u t e s than h a v e , f o r e x a m p l e , t h e i r American c o u n t e r -p a r t s . 3 . 2 S t r i k e A c t i v i t y i n B r i t i s h Columbia 1945-75 S t r i k e d a t a were g a t h e r e d from v a r i o u s p u b l i c a t i o n s by t h e B . C . Department o f Labour and from t h e f i l e s o f a s i m i l a r p u b l i c agency w h i c h chose t o remain anonymous. I n c o n s i s t e n c i e s were r e s o l v e d by a d o p t i n g t h e l a t t e r ' s d a t a . Q u a l i t a t i v e i n f o r m a t i o n c o n c e r n i n g s t r i k e a c t i v i t y was g l e a n e d from s t r i k e f i l e s , many o f w h i c h c o n t a i n e d newspaper c l i p p i n g s about d i s p u t e s . U s i n g t h e s e f i l e s , t h e d a t a were c l a s s i f i e d a c c o r d i n g t o c o n t r a c t s t a t u s and j u r i s d i c t i o n , among o t h e r t h i n g s . (See Appendix C, 2 4 5 . ) 89 The j u r i s d i c t i o n a l c l a s s i f i c a t i o n s f o r t h e s t r i k e d a t a were as f o l l o w s : f e d e r a l p r i v a t e s e c t o r , f e d e r a l p u b l i c s e c t o r , f i s h i n g , and the Government o f B r i t i s h C o l u m b i a ' s j u r i s d i c t i o n (both p r i v a t e and p u b l i c s e c t o r s ) . The f e d e r a l p r i v a t e s e c t o r j u r i s d i c t i o n embraces i n -t e r n a t i o n a l and i n t e r p r o v i n c i a l t r a n s p o r t a t i o n and c o m m u n i c a t i o n s , t h e n a t i o n ' s c h a r t e r e d b a n k s , f e d e r a l crown c o r p o r a t i o n s , and b u s i -17 nesses which P a r l i a m e n t deemed i m p o r t a n t t o two o r more p r o v i n c e s . As s u c h , i t i n c l u d e s c e r t a i n segments o f i n d u s t r y i n B r i t i s h Columbia such as t r a n s p o r t a t i o n w h i c h e x e r t a s i g n i f i c a n t i n f l u e n c e on B . C . ' s r e s o u r c e e x t r a c t i o n based economy. For i n s t a n c e , a 1969 t o w - b o a t d i s p u t e brought t h e P r o v i n c e ' s f o r e s t p r o d u c t s i n d u s t r i e s t o a v i r t u a l l y complete h a l t , i m p a r t i n g s i g n i f i c a n t downward m u l t i p l i e r -18 e f f e c t t o t h e economy o f B r i t i s h C o l u m b i a . The f e d e r a l p u b l i c s e c t o r c o m p r i s e s t h o s e f e d e r a l p u b l i c s e r v a n t s who b a r g a i n c o l l e c -t i v e l y under the P u b l i c S e r v i c e S t a f f R e l a t i o n s A c t ( R . S . C . 1970, c , P - 3 5 ) . F i s h i n g n o r m a l l y i s n o t c o n s i d e r e d a j u r i s d i c t i o n , b u t , as i t c u r r e n t l y s t a n d s , f i s h i n g t e c h n i c a l l y i s n e i t h e r p a r t o f t h e f e d e r a l j u r i s d i c t i o n nor a p a r t o f t h e j u r i s d i c t i o n o f the G o v e r n -ment o f B r i t i s h C o l u m b i a . F i s h i n g had been c o n s i d e r e d a p a r t o f t h e f e d e r a l p r i v a t e s e c t o r j u r i s d i c t i o n u n t i l 1974, when the Supreme C o u r t o f Canada r u l e d t h a t f i s h i n g was o u t s i d e (ultra vlneA) t h e f e d e r a l j u r i s d i c t i o n under the B r i t i s h North American A c t . The Supreme C o u r t was supposed t o hand down a n o t h e r d e c i s i o n c o n -17 See Canada Labour Code, R e v i s e d S t a t u t e s o f C a n a d a , 1970, c . L - 1 , S . 2 . 18 See E m p l o y e r s ' C o u n c i l o f B r i t i s h Columbia ( 1 9 7 0 ) . 90 c e r n i n g the j u r i s d i c t i o n f o r f i s h i n g sometime d u r i n g the F a l l o f 1977. Because i t . w a s n o t c l e a r whether the F e d e r a l Government o f Canada o r the P r o v i n c i a l Government o f B r i t i s h Columbia w i l l be r e g u l a t i n g i n d u s t r i a l r e l a t i o n s i n f i s h i n g i n f u t u r e , f i s h i n g was c o n s i d e r e d a s e p a r a t e j u r i s d i c t i o n . The Government o f B r i t i s h Columbia r e g u l a t e s l a b o u r r e l a t i o n s between those employees and employers who l i e o u t s i d e f i s h -i n g and the two f e d e r a l j u r i s d i c t i o n s . S t r i k e data were g a t h e r e d f o r a l l f o u r j u r i s d i c t i o n s i n B r i t i s h Columbia f o r c o m p a r a t i v e p u r p o s e s . W i t h i n the j u r i s d i c t i o n o f B r i t i s h Columbia the d i s t r i b u t i o n o f s t r i k e s by c o n t r a c t s t a t u s was as f o l l o w s f o r the y e a r s , 1945-75: f i r s t a g r e e m e n t - - ! 2 % , c o n t r a c t r e n e w a l - - 5 2 % and d u r i n g the t e r m - - 3 6 % . (See T a b l e 1 . ) Data c o n c e r n i n g the r a t i o s o f f i r s t agreement s t r i k e s and o f c o n t r a c t renewal s t r i k e s to a l l s t r i k e s g e n e r a l l y are n o t a v a i l a b l e f o r Canada's o t h e r p r o v i n c i a l j u r i s d i c t i o n s . However, f i g u r e s t h a t were c o m p i l e d from a s t u d y o f i n j u n c t i o n s and s t r i k e s i n O n t a r i o f o r the 1958-65 time p e r i o d y i e l d e d s i m i l a r r e s u l t s : f i r s t agreement--26% (331 s t r i k e s ) , c o n t r a c t r e n e w a l - - 4 5 % (572 19 s t r i k e s ) and d u r i n g the term 29% (364 s t r i k e s ) . M o r e o v e r , the 1955-65 f i g u r e s f o r B r i t i s h Columbia were as f o l l o w s : f i r s t ,agreement--21 .5% (47 s t r i k e s ) , c o n t r a c t r e n e w a l - -1 9 S e e C a r r o t h e r s ,and P a l m e r / s 19.66, 2 3 4 , T a b l e 4 0 . S t r i k e s which i n v o l v e d " o t h e r c i r c u m s t a n c e s " were dropped from C a r r o t h e r s and P a l m e r ' s d a t a , i n o r d e r t o make t h a t d a t a c o m p a t i b l e w i t h t h e d a t a used i n t h e c u r r e n t s t u d y . T A B L E 1 Number a n d A v e r a g e D u r a t i o n o f S t r i k e s C l a s s i f i e d by C o n t r a c t S t a t u s a n d By J u r i s d i c t i o n i n B r i t i s h C o l u m b i a : 1 9 4 5 - 7 5 C O N T R A C T S T A T U S F i r s t C o n t r a c t Renewal D u r i n g Term 0 t h e r _ E i t h e r F i r s t C o n t r a c t o r Renewal P r e s u m a b l y D u r i n g Term JURISDICTION Y e a r s N o . A v e r a g e D u r a t i o n N o . A v e r a g e D u r a t i o n N o . A v e r a g e D u r a t i o n N o . Ave r a g e D u r a t i o n N o . A v e r a g e D u r a t i o n N o . A v e r a g e D u r a t i o n B r i t i s h C o l u m b i a 1 9 4 5 - 4 9 12 3 6 . 0 8 41 3 0 . 1 7 32 8 . 9 7 11 1 0 . 6 4 0 0 . 0 0 0 . 0 1 9 5 0 - 5 9 2 9 3 3 . 4 1 158 2 7 . 8 5 100 6 . 5 7 15 1 2 . 0 0 3 4 3 . 0 0 0 0 . 0 1 9 6 0 - 6 9 59 8 4 . 9 5 205 4 3 . 7 1 • 125 7 . 5 0 10 1 5 . 9 0 . 5 1 1 . 0 0 2 1 4 . 0 0 1 9 7 0 - 7 5 6 3 7 3 . 3 7 330 4 1 . 1 4 246 6 . 1 8 5 1 3 . 6 0 0 0 . 0 1 9 . 0 0 T o t a l 1 9 4 5 - 7 5 1 6 3 6 7 . 7 1 734 3 8 . 3 8 5 0 3 6 . 7 6 41 1 2 . 7 8 8 2 3 . 0 0 3 1 2 . 3 3 F e d e r a l : P r i v a t e S e c t o r 1 9 4 5 - 4 9 0 0 . 0 • 2 1 7 . 5 0 0 0 . 0 0 0 . 0 0 0 . 0 0 0 . 0 1 9 5 0 - 5 9 0 0 . 0 15 2 0 . 9 3 6 1 3 . 6 7 3 3 . 3 3 0 0 . 0 0 0 . 0 1 9 6 0 - 6 9 0 0 . 0 18 2 5 . 7 8 8 5 . 1 3 2 3 . 0 0 0 0 . 0 0 0 . 0 • 1 9 7 0 - 7 5 3 4 8 . 6 7 41 1 3 . 3 2 31 2 . 7 4 6 0 . 0 0 0 . 0 0 0 . 0 T o t a l 1 9 4 5 - 7 5 3 4 8 . 6 7 76 1 7 . 8 8 4 5 4 . 6 2 5 3 . 2 0 0 0 . 0 0 0 . 0 F e d e r a l : P u b l i c S e c t o r 1 9 6 0 - 6 9 * 0 0 . 0 0 0 . 0 1 1 . 0 0 1 5 . 0 0 0 0 . 0 0 0 . 0 1 9 7 0 - 7 5 0 0 . 0 14 9 . 7 9 6 2 . 0 0 0 0 . 0 0 0 . 0 0 0 . 0 F i s h i n g * * 1 9 4 5 - 4 9 2 1 5 . 0 0 1 6 . 0 0 0 0 . 0 0 0 . 0 0 0 . 0 0 0 . 0 1 9 5 0 - 5 9 0 0 . 0 10 3 2 . 2 0 1 5 . 0 0 0 0 . 0 0 0 . 0 0 0 . 0 1 9 6 0 - 6 9 1 1 0 1 . 0 0 1 4 . 0 0 0 0 . 0 1 1 . 0 0 0 0 . 0 0 0 . 0 1 9 7 0 - 7 5 1. 1 2 . 0 0 3 1 6 . 3 3 0 0 . 0 0 0 . 0 0 0 . 0 0 0 . 0 T o t a l 1 9 4 5 - 7 5 4 3 5 . 7 5 15 2 5 . 4 0 1 5 . 0 0 1 1 . 0 0 0 0 . 0 0 0 . 0 * N o t p e r m i t t e d t o b a r g a i n c o l l e c t i v e l y u n t i l 1 9 6 7 , when t h e P u b l i c S e r v i c e S t a f f R e l a t i o n s A c t (PSSRA) was e n a c t e d . * N o t c l e a r w h e t h e r a p a r t o f t h e p r o v i n c i a l j u r i s d i c t i o n o r o f t h e f e d e r a l j u r i s d i c t i o n . * I n c l u d e s s t r i k e s b y u n o r g a n i z e d e m p l o y e e s a n d i n v o l v e s s t r i k e s b y o r g a n i z e d b u t n o n - c e r t i f i e d g o v e r n m e n t e m p l o y e e s . 92 52.24% (114 s t r i k e s ) and d u r i n g the term 26.6% (58 s t r i k e s ) . B r i t i s h Columbia and O n t a r i o , t h e r e f o r e , appear to have e x p e r i e n c e d ve ry s i m i l a r d i s t r i b u t i o n s o f s t r i k e s by c o n t r a c t s t a t u s d u r i n g the 1958-65 time p e r i o d . By c o n t r a s t , the p a t t e r n s f o r the p r o p o r t i o n o f a l l s t r i k e s t h a t were w i l d c a t s t r i k e s i n B r i t i s h Columbia and O n t a r i o d i v e r g e d 1966 through 1972. A c c o r d i n g to C l a c k , s t r i k e s d u r i n g the term g e n e r a l l y d e c l i n e d as a p e r c e n t a g e o f a l l s t r i k e s i n O n t a r i o (1975, F i g u r e V I ) . They d i p p e d from r o u g h l y 26% d u r i n g 1965-69 to a p p r o x i m a t e l y 22% d u r i n g 1970-72. By c o n t r a s t , s t r i k e s d u r i n g the term i n c r e a s e d s u b s t a n t i a l l y i n B r i t i s h Columbia as a p r o p o r t i o n o f a l l s t r i k e s from 34.3% d u r i n g 1 9 6 5 - 6 9 , to 39% d u r i n g 1 9 7 0 - 7 2 . 2 0 The t r e n d o f s t r i k e a c t i v i t y i n B r i t i s h Columbia was an i n c r e a s i n g one d u r i n g the 1940s, 1 9 5 0 s , 1 9 6 0 s , and p a r t i c u l a r l y the 1970s, as i s i l l u s t r a t e d i n Table 1 . T h i s i n c r e a s i n g t r e n d o c c u r r e d i n the two j u r i s d i c t i o n s t h a t the F e d e r a l Government r e g u l a t e s , as w e l l . (See T a b l e 1 . ) M o r e o v e r , O n t a r i o and Quebec a l s o e x p e r i e n c e d a s t e a d y i n c r e a s e i n s t r i k e a c t i v i t y , measured i n man-days l o s t , o v e r the 1 9 4 5 - 4 9 , 1 9 5 0 - 5 9 , 1 9 6 0 - 6 9 , and 1970-75 time C l a c k used f i v e - y e a r moving averages i n h i s c a l c u l a t i o n s . F i v e - y e a r moving averages were c a l c u l a t e d u s i n g the data p r e s e n t e d i n T a b l e 2 . They were as f o l l o w s : 32.3% ( 1 9 6 5 ) , 39.9% ( 1 9 6 6 ) , 33.2% ( 1 9 6 7 ) , 29.7% ( 1 9 6 8 ) , 36.6% ( 1 9 6 9 ) , 35.8% ( 1 9 7 0 ) , 40.2% ( 1 9 7 1 ) , and 41% ( 1 9 7 2 ) . These p e r c e n t a g e s a r e very c l o s e t o the ones t h a t C l a c k p r e s e n t s f o r B r i t i s h Columbia f o r the c o r r e s p o n d i n g y e a r s (1975, F i g u r e V I ) . 93 p e r i o d s . However, when the s t r i k e data f o r B r i t i s h Columbia are c l a s s i f i e d a c c o r d i n g to c o n t r a c t s t a t u s and a g g r e g a t e d o v e r each y e a r , a d i s t i n c t l y c y c l i c a l p a t t e r n i s e v i d e n t f o r each s t r i k e s e r i e s from 1945 through 1971. The number o f f i r s t agreement s t r i k e s , c o n t r a c t renewal s t r i k e s and s t r i k e s d u r i n g the term g e n e r a l l y i n c r e a s e d u r i n g upswings and a t t a i n maximums e i t h e r d u r i n g the peak o f each boom ( e . g . , 1951, 1 9 5 6 - 5 7 , and 1966) o r w i t h i n a y e a r o r two a f t e r the peak. They t y p i c a l l y d e c l i n e as the .economy o f . B r i t i s h Columbia e n t e r s i n t o a r e c e s s i o n a r y p e r i o d and a t t a i n a minimum e i t h e r . d u r i n g the t r o u g h o f the r e g i o n a l b u s i n e s s c y c l e ( e . g . , 1954, 1 9 6 0 - 6 1 , and 1970-71) o r a y e a r o r two t h e r e a f t e r . By c o n t r a s t , the advent o f d o u b l e - d i g i t i n f l a t i o n , c o u p l e d w i t h r e l a t i v e l y h i g h l e v e l s o f unemploy-ment from 1973 through 1975 g e n e r a l l y was accompanied by an upsurge i n the number o f s t r i k e s f o r each o f the t h r e e by s t r i k e s e r i e s . (See Table 2 . ) B u t , such a c y c l i c a l p a t t e r n was n o t o b s e r v e d w i t h ' r e g a r d to the d u r a t i o n s o f s t r i k e s . . (See Table 2-.) Walsh a l s o found t h a t the d u r a t i o n o f s t r i k e s was r e l a t e d much l e s s t o c y c l i c a l a c t i v i t y than was t h e number o f s t r i k e s (1975, 4 7 - 4 8 ) . W a l s h , however, used n a t i o n a l data c o n c e r n i n g s t r i k e s i n Canada and d i d n o t c l a s s i f y s t r i k e s by c o n t r a c t s t a t u s . 21 See Jamieson (1977b) c o n c e r n i n g s t r i k e a c t i v i t y , measured i n man-days l o s t , f o r B r i t i s h C o l u m b i a , O n t a r i o and Quebec from 1965 through 1974. See Garner (1977) c o n c e r n i n g Canada-wide s t r i k e a c t i v i t y w h i c h has been c l a s s i f i e d by p r o v i n c e (and i n d u s t r y ) and which i s measured as number o f s t r i k e s p e r u n i o n i z e d employee and as man-days l o s t p e r u n i o n i z e d employee. See Eaton (1973) c o n c e r n -i n g man-days l o s t and the number o f s t r i k e s i n B r i t i s h Columbia and O n t a r i o from 1946 through 1970. See a l s o Canada Department o f L a b o u r , S t r i k e s and L o c k o u t s i n Canada, which i s an annual p u b l i c a t i o n and which i s the s o u r c e f o r the d a t a i n the s t u d i e s by Jamieson ( 1 9 7 7 b ) , Garner (1977) and Eaton ( 1 9 7 3 ) . . TABLE 2 The Annual P a t t e r n o f S t r i k e s i n the j u r i s d i c t i o n o f B r i t i s h Columbia C l a s s i f i e d - . s b y c - K e y C o n t r a c t S t a t u s : 1945-75 -Year C o n t r a c t S t a t u s F i r s t Agreement Renewal D u r i n g Term Average D u r a t i o n Average D u r a t i o n Average D u r a t i o n Number (Working Days) Number (Working Days) Number (Working Days) 1945 1 4 5 . 0 0 0 0 3 9.6667 12 6 . 5 8 3 3 1946 4 11.0000 6 42.8333 6 2 0 . 5 0 0 0 1947 5 17.1667 17 32.0556 5 1 .2000 1948 0 0 . 0 3 40.0000 6 11.6667 1949 2 • 126.5000 5 24.5000 2 4 . 0 0 0 0 1950 2 22.5000 8 26.1818 11 2 . 4 5 4 5 1951 5 10.2000 21 2 0 . 3 3 3 3 9 16.2222 1952 1 30.0000 19 31.1304 8 3.6667 1953 3 39.0000 16 30.6471 9 3.5556 1954 C 0 . 0 11 27.7692 5 7 .0000 1955 C 0 . 0 7 32.1250 12 7 .0000 1956 2 . 2 5 . 5 0 0 0 . 11 28.6364 18 6.4444 1957 3 75.6667 25 23.7000 9 5 . 6 0 0 0 1958 4 31.2500 16 30.1818 13 7 .6000 1959 7 43.7143 19 22.8571 5 11.8750 1960 4 24.5000 7 15.3000 4 2 0 . 0 0 0 0 1961 1 10.0000 11 5 5 . 0 8 3 3 5 2 . 2 0 0 0 1962 10 35.5000 13 87.0769 5 2 6 . 2 0 0 0 1963 3 4 0 . 0 0 0 0 8 73.0769 3 1 .7500 1964 7 125.5714 14 44.8125 9 4 . 5 4 5 5 1965 11 67.6364 26 34.5185 14 4 . 0 0 0 0 1966 5 113.0000 17 20.2632 11 9 . 6 6 6 7 The Annual P a t t e r n o f S t r i k e s i n $he. J u r i s d i c t i o n o f B r i t i s h Columbia T a b l e 2 ( c o n t i n u e d ) " C l a s s i f j e d a 1 4 . by Key C o n t r a c t S t a t u s : 1945-75 Year C o n t r a c t S t a t u s F i r s t Agreement Renewal D u r i n g Term Average D u r a t i o n Average D u r a t i o n Average D u r a t i o n Number (Working Days) Number (Working Days) Number (Working Days) 1967 7 31.4286 28 46.3929 23 6 . 6 9 5 7 1968 7 51.4286 38 37.3421 21 11.0000 1969 9 121.1111 47 32.4808 28 3.9655 1970 13 117.6154 44 43.1875 8 7.1111 1971 14 67.3571 29 37.5455 56 5.0847 1972 9 30.6667 46 31.5636 30 7.1143 1973 8 6 0 . 4 4 4 4 59 35.1765 65 3.7200 1974 17 70.8235 65 32.7121 52 5.5714 1975 11 58.9167 98 36.8273 33 9 . 1 5 0 0 175 737 497 96 S t u a r t J a m i e s o n , a t t r i b u t e s the c y c l i c a l p a t t e r n o f s t r i k e s i n B r i t i s h Columbia (and e l s e w h e r e i n Canada) to " . . . economic instability, p a r t i c u l a r l y as r e g a r d s h i g h l y u n s t a b l e c y c l e s o f i n v e s t m e n t and c o n s t r u c t i o n a c t i v i t y (1977a, 1 ) . " He p o i n t s o u t t h a t l a r g e , "lumpy", changes i n i n v e s t m e n t a c t i v i t y and i n t u r n i n c o n -s t r u c t i o n a c t i v i t y — s o m e o f which were a s s o c i a t e d w i t h the P r o v i n c i a l Government's e x p e n d i t u r e s on major p u b ! i c u n d e r t a k i n g s , such as d a m s -have f u e l l e d the c y c l i c a l r e g i o n a l economy o f B r i t i s h C o l u m b i a . The dependence o f B r i t i s h C o l u m b i a ' s r e s o u r c e - b a s e d economy upon the v a g a r i e s o f f o r e i g n markets f o r a c o n s i d e r a b l e p r o p o r t i o n o f t h e i r s a l e s has a c c e n t u a t e d the i n s t a b i l i t y and the c y c l i c a l - p r o n e n e s s o f the r e g i o n a l economy o f B r i t i s h C o l u m b i a . P r o f e s s o r Jamieson f o c u s e s much o f h i s a n a l y s i s o f s t r i k e a c t i v i t y i n B r i t i s h Columbia on the two " p a t t e r n s e t t i n g " i n d u s t r i e s , c o n s t r u c t i o n and f o r e s t p r o d u c t s . (See J a m i e s o n , 1977b.) Between t h e m , , f o r e s t p r o d u c t s and c o n s t r u c t i o n a c c o u n t e d f o r o v e r o n e - q u a r t e r . o f . a l l s t r i k e s t h a t i s s u e d from i n t e r e s t d i s p u t e s and f o r a l m o s t t h r e e - q u a r t e r s o f a l l s t r i k e s d u r i n g the term i n B r i t i s h Columbia from 1945 through 1975. (See T a b l e 3 . ) O t h e r f e a t u r e s o f the i n d u s t r i a l c o m p o s i t i o n o f the t h r e e s t r i k e s e r i e s are n o t e w o r t h y , t o o . S e r v i c e and t r a d e f o r i n s t a n c e , a c c o u n t e d f o r a p p r o x i m a t e l y f o r t y - o n e p e r c e n t o f a l l f i r s t agreement s t r i k e s , but they o n l y c o n t r i b u t e d e i g h t e e n p e r c e n t o f the c o n t r a c t renewal s t r i k e s and 2.4% o f the s t r i k e s d u r i n g the t e r m . (See Table 3 . ) 97 TABLE 3 The P e r c e n t a g e o f S t r i k e s W i t h i n the J u r i s d i c t i o n o f B r i t i s h Columbia by I n d u s t r y : 1945-75 C o n t r a c t S t a t u s I n d u s t r y F i r s t Agreement C o n t r a c t Renewal D u r i n g Term (%) MINING 4 6 9 MANUFACTURING Food & Beverages P u l p , e t c . * L o g g i n g , e t c . * * Wood P r o d u c t s * * FOREST PRODUCTS. Metal P r o d u c t s M a c h i n e r y + M i s c . Manu. 4 6 1 8 15 5 5 11 8 9 3 4 16 6 4 13 4 17 27 12 56 2 2 5 Sub T o t a l 40 47 68 CONSTRUCTION 11 13 17 TRANSPORTATION, COMMUNICATIONS U t i l i t i e s 4 7 3 TRADE 24 9 1 SERVICES M i s c . S e r v i c e s 10 7 . 4 Sub T o t a l 17 18 2 100 100 100 TOTAL NUMBER 163 734 503 * P r i m a r i l y p u l p and p a p e r : 1 9 4 5 - 6 9 ; i n c l u d e s wood p r o d u c t s : 1970-75. • Covers 1 9 4 5 - 6 9 . I n c l u d e s p u l p , e t c . ; l o g g i n g , e t c . ; and wood p r o d u c t s . ^ I n c l u d e s heavy e l e c t r i c a l and t r a n s p o r t a t i o n m a c h i n e r y . 98 The r e l a t i v e l y h i g h p e r c e n t a g e o f f i r s t agreement s t r i k e s and the r e l a t i v e l y low p e r c e n t a g e o f s t r i k e s d u r i n g the term r e f l e c t the f a c t t h a t both s e r v i c e s and t r a d e t r a d i t i o n a l l y were d i f f i c u l t to o r g a n i z e and t h a t i t was d i f f i c u l t to r e t a i n a union once i t was c e r t i f i e d i n e i t h e r the s e r v i c e s o r t r a d e . 3 . 3 S t r i k e - R e l a t e d I s s u e s and Data Three s t r i k e - r e l a t e d i s s u e s w i l l be d e a l t w i t h i n t h i s s e c t i o n . 1. Are t h e r e s t a t i s t i c a l d i f f e r e n c e s among the t h r e e s e r i e s o f s t r i k e s t h a t would seem t o . w a r r a n t t h e i r b e i n g d e a l t w i t h s e p a r a t e l y , as opposed to j o i n t l y ? P a i r w i s e s t a t i s t i c a l t e s t s were conducted w i t h r e s p e c t to the d i f f e r e n c e s between the mean number and the mean d u r a t i o n o f the t h r e e s t r i k e s e r i e s . P a i r w i s e c o r r e l a t i o n c o e f f i c i e n t s were c a l c u l a t e d i n o r d e r to determine the degree to w h i c h the t h r e e s e r i e s were c o l i n e a r . The mean o f the d i f f e r e n c e between the two v a r i a b l e s g e n e r a l l y was s i g n i f i c a n t l y d i f f e r e n t from zero a t a very h i g h l e v e l o f s i g n i f i c a n c e , and the c o r r e l a t i o n c o e f f i c i e n t s were n o t h i g h enough (a minimum o f . 8 and p r e f e r a b l y . 9 ) to w a r r a n t lumping the s e r i e s t o g e t h e r , 22 s a y , i n the r e g r e s s i o n a n a l y s i s t h a t f o l l o w s b e l o w . The r e s u l t s o f the t e s t , t h a t the mean o f the d i f f e r e n c e between the two v a r i a b l e s was z e r o , were as f o l l o w s : ( c o n t i n u e d on f o l l o w i n g page) 99 2 . What was the e x t e n t o f u n l a w f u l s t r i k e a c t i v i t y i n B r i t i s h Columbia? The b u l k o f u n l a w f u l s t r i k e s t h a t took p l a c e i n B r i t i s h Columbia from 1945 through 1975 w e r e , o f c o u r s e , s t r i k e s d u r i n g the term o r s o - c a l l e d u n l a w f u l s t r i k e s (see Table 1 ) . By c o n t r a s t , somewhat l e s s than e i g h t p e r c e n t o f a l l s t r i k e s t h a t i s s u e d from i n t e r e s t d i s p u t e s were u n l a w f u l s t r i k e s . (See Table 4 . ) The l a r g e p r o p o r t i o n o f r e s u l t s t h a t were " n o t r e p o r t e d " s e e m i n g l y c a s t s doubt as to the a c c u r a c y o f these r e s u l t s . I n d e e d , to the e x t e n t t h a t r e s u l t s w h i c h were c l a s s e d as " n o t r e p o r t e d " i n c l u d e d u n l a w f u l s t r i k e a c t i v i t y , we have u n d e r e s t i m a t e d the p r o p o r t i o n o f c o n t r a c t n e g o t i a t i o n s s t r i k e s t h a t were u n l a w f u l . However, these e s t i m a t e s are a c c u r a t e to the e x t e n t t h a t the p r e s s r e p o r t e d "news-worthy" s t r i k e b e h a v i o u r , f o c u s s i n g on u n l a w f u l s t r i k e a c t i o n . M o r e o v e r , the f a c t t h a t s i m i l a r r e s u l t s o b t a i n e d i n the f e d e r a l j u r i s d i c t i o n (see Table 5 ) , seems to s u p p o r t the c o n c l u s i o n t h a t the e s t i m a t e s f o r B r i t i s h Columbia are f a i r l y a c c u r a t e . 2 2 ( c o n t i n u e d ) T = 4 7 3 * T = 4 ? 9 f i * T = 2 8 ? * I N S 2 , N S ] . I N S 3 , N S 1 ^ y D ' N S 2 , N S 3 T = 1 7877** T = 5 RQRO* T = 9 8 0 2 1 * ' D U R ^ D U P ^ I D U R 1 , D U R 3 3 - D Y O U ' D U R 2 , D U R 3 Y - O U ^ where NS and DUR r e p r e s e n t the number o f s t r i k e s and d u r a t i o n and where 1 , 2 , and 3 r e p r e s e n t f i r s t agreement, c o n t r a c t renewal and d u r i n g the t e r m , r e s p e c t i v e l y . A l l t - s t a t i s t i c s (T) are s t a t i s t i c a l l y ( c o n t i n u e d on page 102) TOO TABLE 4. The L e g a l i t y o f S t r i k e s C l a s s i f i e d by C o n t r a c t S t a t u s w i t h i n the J u r i s d i c t i o n o f B r i t i s h C o l u m b i a : 1945-75 Legal S t a t u s C o n t r a c t S t a t u s F i r s t Agreement C o n t r a c t Renewal D u r i n g Term D e f i n i t e l y l e g a l A p p a r e n t l y l e g a l I l l e g a l : d u r i n g the term o f the c o n t r a c t I l l e g a l : "jumped the gun" P o s s i b l y i l l e g a l : f o r v a r i o u s reasons Not r e c o r d e d 21 (12%). 1 (1%) 5 (3%) 9 (5%) 138 (79%)+ 181 (25%) 18 (2%) * 35 (5%) 18 (2%) 485 (66%)+ 438 (100%) T o t a l 174 737 438 * A few o f the f i r s t agreement and c o n t r a c t renewal s t r i k e s v i o l a t e d the p r e c o n d i t i o n f o r a l a w f u l s t r i k e t h a t the c o n t r a c t must have e x p i r e d , but they a r e l i s t e d under t h e c a t e g o r y o f " i l l e g a l : ' jumped t h e g u n . ' • * ' . " I l l e g a l : ' jumped the g u n ' " means t h a t a t l e a s t one o f t h e p r e c o n d i t i o n s f o r a l a w f u l s t r i k e was v i o l a t e d . For i n s t a n c e , a s e c r e t s t r i k e v o t e may not have been h e l d p r i o r t o the work s t o p p e d . * I n c l u d e s " b o o k i n g o f f s i c k , " r e s p e c t i n g a n o t h e r u n i o n ' s p i c k e t l i n e s , " i n f o r m a t i o n p i c k e t s , " "mystery p i c k e t s , " and p i c k e t s i g n s a y i n g "no l c o n t r a c t , no w o r k . " The d a t a are based upon newspaper a r t i c l e s , and the p r e s s i s a p t to s e n s a -t i o n a l i z e such t h i n g s as u n l a w f u l s t r i k e a c t i o n . T h u s , we might e x p e c t t h a t m o s t , i f n o t n e a r l y a l l the r e s p o n s e s t h a t were " n o t r e c o r d e d " i n v o l v e d l a w f u l s t r i k e a c t i o n . 101 TABLE 5 The L e g a l i t y o f S t r i k e s D i s a g g r e g a t e d by C o n t r a c t S t a t u s w i t h i n t h e F e d e r a l Government's J u r i s d i c t i o n s i n B r i t i s h C o l u m b i a : 1945-75 C o n t r a c t S t a t u s Legal S t a t u s F i r s t Agreement C o n t r a c t Renewal D u r i n g Term D e f i n i t e l y L e g a l 0 6 (7%) -A p p a r e n t l y l e g a l 0 4 (5%) _* 11 l e g a l : d u r i n g t h e term o f t h e c o n t r a c t * * 52 (100%) I l l e g a l : "jumped the gun" 0 7 (8%) -P o s s i b l y i l l e g a l : f o r v a r i o u s reasons 0 4 (5%) -Not r e c o r d e d 1 (100%)+ 65 (75%)+ -T o t a l 1 86 52 A few o f the f i r s t agreement and c o n t r a c t renewal s t r i k e s v i o l a t e d the p r e c o n d i t i o n f o r a l a w f u l s t r i k e t h a t the c o n t r a c t must have e x p i r e d , b u t they a r e l i s t e d under the c a t e g o r y o f " i l l e g a l : ' jumped t h e g u n . ' " I l l e g a l : 'jumped the g u n " 1 means t h a t a t l e a s t one o f the p r e c o n d i t i o n s f o r a l a w f u l s t r i k e was v i o l a t e d . For i n s t a n c e , a s e c r e t s t r i k e vote may n o t have been h e l d p r i o r t o t h e work s t o p p e d . I n c l u d e s " b o o k i n g o f f s i c k , " r e s p e c t i n g a n o t h e r u n i o n ' s p i c k e t l i n e s , " i n f o r m a t i o n p i c k e t s , " " m y s t e r y p i c k e t s , " and p i c k e t s i g n s a y i n g "no c o n t r a c t , no w o r k . " The a u t h o r i s q u i t e c e r t a i n t h a t n e a r l y a l l o f the s t r i k e s whose l e g a l s t a t u s was not r e c o r d e d were l a w f u l s t r i k e s . 102 3 . How were s t r i k e s ended? How o f t e n were s t r i k e - e n d i n g measures used a n d , i n p a r t i c u l a r , how o f t e n d i d governments o f B r i t i s h Columbia use s t r i k e - e n d i n g weapons from the a r s e n a l o f weapons p h i l o s o p h y ? What k i n d o f an i m p a c t d i d s t r i k e - e n d i n g measures seem to have had on the average d u r a t i o n o f s t r i k e a c t i v i t y ? _ What modes o f t h i r d p a r t y i n t e r v e n t i o n most o f t e n were a s s o c i a t e d w i t h s t r i k e - e n d i n g s e t t l e m e n t s ? How o f t e n were accommodative v e r s u s n o r m a t i v e modes o f t h i r d - p a r t y i n t e r v e n t i o n a s s o c i a t e d w i t h s t r i k e - e n d i n g s e t t l e m e n t s ? Some 6 . 4 p e r c e n t o f a l l s t r i k e s i n B r i t i s h Columbia were r e s o l v e d through l e g a l measures. (See Table 6 . ) A p p r o x i m a t e l y 5 . 2 p e r c e n t o f s t r i k e s i n B r i t i s h Columbia d u r i n g 1945-75 i n v o l v e d s t r i k e - e n d i n g l e g i s l a t i o n (2.3%) o r the i s s u a n c e o f p a r t i a l o r f u l l i n j u n c t i o n s ( 2 . 9 % ) , w h i l e o n l y s i x o f o v e r 1 ,400 i n d u s t r i a l d i s p u t e s were c u r t a i l e d through t r u s t e e s h i p o r s e i z u r e . (See Table 6 . ) T h u s , governments o f B r i t i s h Columbia r a r e l y i n v o k e d the s t r i k e e n d i n g weapons t h a t are to be d e p l o y e d as a p a r t o f the a r s e n a l o f weapons p h i l o s o p h y : t r u s t e e s h i p , s e i z u r e and b a c k - t o - w o r k l e g i s -l a t i o n . M o r e o v e r , s t r i k e - e n d i n g measures tend to have e x e r t e d 2 1 ( c o n t i n u e d ) d i f f e r e n t from z e r o a t the . 1 % . l e v e l (*) b u t o n e . The one e x c e p t i o n i s s t a t i s t i c a l l y d i f f e r e n t from zero a t the 10% l e v e l ( * * ) . The r e s u l t o f the c o r r e l a t i o n t e s t s were the f o l l o w i n g : r N S p N S 2 = - 7 1 3 4 r N S l , N S 3 = ' 6 2 8 4 r N S 2 , N S 3 = - 7 0 1 1 r DUR l s DUR 2 = " ' ° 5 8 5 r D U R 1 , D U R 3 = ° - 2 4 7 8 r DUR 2 ,DUR 3 = J 7 6 8 here r i s the c o r r e l a t i o n c o e f f i c i e n t . TABLE" 6 Legal Measures Used to R e s o l v e S t r i k e s C l a s s i f i e d by J u r i s d i c t i o n i n B r i t i s h C o l u m b i a : 1945-75 J U R I S D I C T I O N LEGAL MEASURES B r i t i s h Columbia F e d e r a l : P u b l i c S e r v i c e F e d e r a l : P r i vate S e c t o r . • F i s h i n g T o t a l B a c k - t o - w o r k l e g i s l a t i o n * 20 0 5 0 25 B a c k - t o - w o r k o r d e r by l a b o u r R e l a t i o n s Board 8 0 0 0 8 Government d e c l a r e d m e d i a t o r ' s award b i n d i n g 3 0 2 0 5 B a c k - t o - w o r k l e g i s l a t i o n t h r e a t e n e d 3 0 1 0 4 P a r t i a l i n j u n c t i o n 22 0 2 0 24 F u l l i n j u n c t i o n 18 0 6 1 25 I n j u n c t i o n d e n i e d o r r e s e r v e d 8 0 0 1 9 Union o r f i r m p l a c e d under government a d m i n i s t r a t i o n 6 0 1 0 7 T o t a l 88 0 17 2 107 No Record 1376 22 108 21 1527 I n c l u d e s two b a c k - t w o - w o r k o r d e r s under S e c t i o n 18 o f the M e d i a t i o n Commission A c t , S . B . C . , 1968, c . 2 6 . 104 a r a t h e r s m a l l i m p a c t i n r e d u c i n g the average d u r a t i o n o f s t r i k e s i n B r i t i s h Columbia d u r i n g 1945-75 from what i t would have been i n t h e i r a b s e n c e . I n t e r e s t d i s p u t e s t r i k e s most o f t e n were r e s o l v e d through n e g o t i a t i o n s , w h i l e s t r i k e s d u r i n g the term most o f t e n were r e s o l v e d through a r b i t r a t i o n (as a p a r t o f the g r i e v a n c e machinery) and n e g o t i a t i o n s . (See Table 7 . ) P r e d i c t a b l y , accommodative modes o f d i s p u t e r e s o l u t i o n ( i . e . , m e d i a t i o n , h i g h - l e v e l m e d i a t i o n and i n d u s t r i a l i n q u i r y commissions) were used more o f t e n than n o r m a t i v e modes to r e s o l v e i n t e r e s t d i s p u t e s t r i k e s . M o r e o v e r , n o r m a t i v e ( o r a d j u d i c a t i v e ) modes--namely a r b i t r a t i o n - - w e r e used more f r e q u e n t l y than accommodative modes to r e s o l v e s t r i k e s d u r i n g the t e r m . (See T a b l e 7 . ) Two o f the t h r e e main f i n d i n g s p r e s e n t e d above s u g g e s t t h a t we f o c u s on s t r i k e s d u r i n g the term i n t h i s s t u d y . F i r s t , s t r i k e s d u r i n g the term make up the b u l k o f u n l a w f u l s t r i k e s . S e c o n d , s t a t i s t i c a l e v i d e n c e was a d d u c e d , t h a t f i r s t agreement s t r i k e s , c o n t r a c t renewal s t r i k e s and s t r i k e s d u r i n g the term a r e d i f f e r e n t k i n d s o f s t r i k e s a n d , t h e r e f o r e , s h o u l d be s t u d i e d s e p a r a t e l y . A n o t h e r reason f o r f o c u s i n g on w i l d c a t s t r i k e s i s t h a t they o c c u r under d i f f e r e n t c i r c u m s t a n c e s , and presumably f o r d i f f e r e n t r e a s o n s , ,than do i n t e r e s t d i s p u t e s t r i k e s . For i n s t a n c e , the c o n t r a c t i s " c l o s e d " r a t h e r than " o p e n . " M o r e o v e r , w i l d c a t 105 TABLE 7 The Modes o f D i s p u t e R e s o l u t i o n Employed D u r i n g S t r i k e A c t i o n C l a s s i f i e d by C o n t r a c t S t a t u s W i t h i n B r i t i s h C o l u m b i a ' s J u r i s d i c t i o n : 1945-75 Modes o f D i s p u t e R e s o l u t i o n C o n t r a c t S t a t u s F i r s t Agreement C o n t r a c t Renewal D u r i n g Term N e g o t i a t i o n s * M e d i a t i o n Departmental M e d i a t i o n I n d u s t r i a l I n q u i r y Commission A r b i t r a t i o n Union Abandoned S t r i k e Employment C o n d i t i o n s S t a t e d No Longer A f f e c t e d ( s t r i k e r s r e p l a c e d ) O p e r a t i o n s R e p o r t e d C l o s e d No Record T o t a l ** 37 (21%) 18 (10%) 4 (2%) 1 (1%) 5 (3%) 8 (5%) 6 (3%) 2 (1%) 94 (54%) 175 196 (27%) 85 (12%) 40 (5%) 1 5 ( 2 % ) 15 (2%) 2 (0%) 9 (1%) 7 (1%) 368 (50%) 737 16 (3%) 10 (2%) 4 (1%) 0 (0%) 15 (3%) 1 (0%) 11 (2%) 1 (0%) 440 (88%) 498 *** I n c l u d e s m e d i a t i o n by m u t u a l l y s e l e c t e d p r i v a t e m e d i a t o r s . M e d i a t i o n by l a b o u r department a d m i n i s t r a t o r s and o f f i c i a l s . Less emphasis was p l a c e d on g a t h e r i n g the i n f o r m a t i o n c o n c e r n i n g d i s p u t e r e s o l u t i o n f o r s t r i k e s d u r i n g the term than f o r e i t h e r c o n t r a c t renewal s t r i k e s o r f i r s t agreement s t r i k e s . 106 s t r i k e a c t i v i t y r e p r e s e n t s a c i r c u m v e n t i o n o f the g r i e v a n c e m a c h i n e r y . The s t a t u t e s o f B r i t i s h Columbia (and n e a r l y a l l o t h e r Canadian j u r i s d i c t i o n s ) s e t o u t t h e g r i e v a n c e m a c h i n e r y , w h i c h t y p i c a l l y c u l -m i n a t e s i n b i n d i n g a r b i t r a t i o n , as a compulsory method f o r r e s o l v -i n g r i g h t s d i s p u t e s . 3 . 4 W i l d c a t S t r i k e s i n B r i t i s h Columbia : 1945-75 T h i r t y - s i x p e r c e n t o f a l l s t r i k e s i n B r i t i s h Columbia were w i l d c a t s t r i k e s . T h i s was one o f the h i g h e s t r a t i o s o f w i l d c a t s t r i k e s t o a l l s t r i k e s i n Canada. In both Canada and t h e U n i t e d S t a t e s t h i r t y p e r c e n t o f a l l s t r i k e s were w i l d c a t s t r i k e s o v e r the 1945-72 time p e r i o d . M o r e o v e r , Nova S c o t i a , where a p p r o x i m a t e l y o n e - h a l f o f a l l s t r i k e s were w i l d c a t s t r i k e s o v e r the same p e r i o d , had t h e h i g h e s t 23 i n c i d e n c e o f " u n l a w f u l " s t r i k e s . B r i t i s h Columbia o n l y e x p e r i e n c e d two y e a r s , 1971 and 1973, when a p p r o x i m a t e l y o n e - h a l f o f a l l s t r i k e s 24 were " i l l e g a l " s t r i k e s . B r i t i s h C o l u m b i a ' s a b o v e - a v e r a g e i n c i d e n c e o f " u n -a u t h o r i z e d " s t r i k e s presumably i s m a i n l y due t o i t s r e s o u r c e -based economy, which i s composed o f t r a d i t i o n a l l y w i l d c a t - p r o n e i n d u s t r i e s , such as m i n i n g , f o r e s t p r o d u c t s , c o n s t r u c t i o n , and " S e e C l a c k , 1975, 6 - 7 , and 10-11. See J a m i e s o n , 1962, f o r an a n a l y s i s o f the 1949-59 w i l d c a t s t r i k e e x p e r i e n c e i n B r i t i s h C o l u m b i a , as compared w i t h t h e r e s t o f Canada. 24 The r a t i o o f w i l d c a t s t r i k e s t o a l l s t r i k e s exceeded o n e - h a l f i n 1971, i t was s l i g h t l y under o n e - h a l f i n 1973. (See T a b l e 9 b e l o w . ) 107 t r a n s p o r t a t i o n . (See Table 3 a b o v e . ) C u r i o u s l y , the h i g h i n c i d e n c e o f " p r o t e s t " s t r i k e s i n Nova S c o t i a i s s e e m i n g l y i n e x -p l i c a b l e . (See C l a c k , 1975, 11 and 1 5 . ) There was a s u b s t a n t i a l i n c r e a s e i n w i l d c a t s t r i k e s i n 26 B r i t i s h Columbia f r o m 1965-69 to 1 9 7 0 - 7 2 , as d e s c r i b e d above. The upswing i n the r a t i o o f u n a u t h o r i z e d s t r i k e s to a l l s t r i k e s t h a t o c c u r r e d i n B r i t i s h Columbia was n o t p a r a l l e l e d e l s e w h e r e i n Canada. In p a r t i c u l a r , i t was n o t p a r a l l e l e d i n Quebec, O n t a r i o and Nova S c o t i a , w h i c h a l o n g w i t h B r i t i s h Columbia g e n e r a l l y have c o n t r i b u t e d about n i n e t y p e r c e n t o f the w i l d c a t s t r i k e s i n Canada. C l a c k d i s c o v e r e d t h a t d u r i n g 1965-69 as compared w i t h 1970-72 the p r o p o r t i o n s o f w i l d c a t s t r i k e s to a l l s t r i k e s d e c l i n e d i n O n t a r i o from r o u g h l y t w e n t y - s i x p e r c e n t to a p p r o x i m a t e l y twenty-two p e r c e n t , i n Quebec from about n i n e t e e n p e r c e n t to below ten p e r c e n t i n Nova S c o t i a from somewhat above s i x t y p e r c e n t to somewhat below f i f t y p e r c e n t (1975, F i g u r e V I ) . The i n c r e a s i n g t r e n d o f w i l d c a t s t r i k e s a c t i v i t y i n B r i t i s h Columbia seems to have m i r r o r e d a d e t e r i o r a t i o n o f l a b o u r r e l a t i o n s i n the f o r e s t p r o d u c t s i n d u s t r i e s . D u r i n g the peak w i l d c a t s t r i k e y e a r s o f 1971 and 1973, f o r i n s t a n c e , w i l d c a t s t r i k e s i n these i n d u s t r i e s made up a t l e a s t s i x t y - n i n e p e r c e n t 2 5 S e e C l a c k , 1975, 9 - 1 0 . oc. See p . 92 above. 108 o f a l l w i l d c a t s t r i k e s . (See Table 8 . ) S i g n i f i c a n t l y , the y e a r s 1971 and 1973 i n c l u d e d the m i d d l e p o r t i o n o f c o l l e c t i v e agreements i n these i n d u s t r i e s . In p a r t i c u l a r , they i n c l u d e d the o n e - q u a r t e r mark to the t h r e e - q u a r t e r s mark o f the two y e a r m a s t e r agreements t h a t were n e g o t i a t e d i n mid-1970 and m i d - 1 9 7 2 . A t l e a s t one o f these s t r i k e s , a s t r i k e by f a l l e r s d u r i n g 1971 was i n p r o t e s t o f the r e m u n e r a t i o n the f a l l e r s , a p a r t i c u l a r " i n f o r m a l work g r o u p , " e a r n e d w i t h i n the framework o f each o f the t h r e e m a s t e r agreements 27 c o v e r i n g l o g g i n g . I t i s a l s o noteworthy t h a t r e p o r t e d l y the e x e c u t i v e o f the I n t e r n a t i o n a l Woodworkers o f A m e r i c a and the employers a s s o c i a t i o n s i n the f o r e s t p r o d u c t s i n d u s t r i e s j o i n t l y undertook to reduce the i n c i d e n c e o f w i l d c a t s t r i k e s . d u r i n g 1974 and e s p e c i a l l y 28 d u r i n g 1975. They e n j o y e d c o n s i d e r a b l e s u c c e s s i n the u n d e r -t a k i n g i n 1975 i n p a r t i c u l a r . (See T a b l e 9 . ) The s e c o n d - h i g h e s t w i l d c a t - p r o n e i n d u s t r y , c o n s t r u c t i o n , a l s o c o n t r i b u t e d to the r a s h o f w i l d c a t s t r i k e s t h a t took p l a c e i n B r i t i s h Columbia d u r i n g 1970-75. However, i n comparison w i t h f o r e s t p r o d u c t s , the p r o p o r t i o n o f a l l s t r i k e s t h a t were " u n -a u t h o r i z e d " s t r i k e s i n c o n s t r u c t i o n was a more v o l a t i l e s e r i e s , o f l o w e r i n c i d e n c e . F i n a l l y , m i n i n g and food and b e v e r a g e s , both o f which p r e v i o u s l y were r a t h e r "dormant" became more a c t i v e c o n t r i b u t o r s The p r o b l e m , t h a t " i n f o r m a l work group" i s d i s s a t i s f i e d w i t h i t s r e n u m e r a t i o n , commonly o c c u r s i n a c o n s o l i d a t e d b a r g a i n i n g s t r u c t u r e l i k e the one i n B . C . ' s f o r e s t p r o d u c t s i n d u s t r i e s . (See Weber, 1967, 14 and 1 8 . ) 28 S e e , f o r e x a m p l e , N . L . Menard, 3rd V i c e P r e s i d e n t o f R e g i o n a l C o u n c i l No. 1 , I n t e r n a t i o n a l Woodworkers o f A m e r i c a , p e r s o n a l l e t t e r i n my p o s s e s s i o n , May 1 0 , 1 9 7 8 . 1 0 9 TABLE 8 The P a t t e r n o f W i l d c a t S t r i k e s W i t h i n S e l e c t e d I n d u s t r i e s and I n d u s t r i a l G r o u p i n g s i n the J u r i s d i c t i o n o f B r i t i s h C o l u m b i a : 1 9 6 0 - 7 5 I n d u s t r y Year CD c - O J -a> «o s -OJ > OJ CO o3 • a o o o +-> CJ +-> CJ1 c CD CD O * 10 o 3 - a o s -a . - a o o 3 E to CO c o •r-4-> O 3 S-+ J to s= o o c o •r-4-> <r> +-> s -o Q. to S-to to Z3 - a c +J to a> +-s_ to o +J L l - O c - a •r- O s -+-> U 3 X-+-> c to •r- E o 1 9 6 0 1 9 6 1 1 9 6 2 1 9 6 3 1 9 6 4 1 9 6 5 1 9 6 6 1 9 6 7 1 9 6 8 1 9 6 9 1 9 7 0 1 9 7 1 1 9 7 2 1 9 7 3 1 9 7 4 1 9 7 5 1 0 0 0 0 0 0 3 0 1 0 1 4 7 7 5 0 0 0 0 0 0 0 0 0 0 0 1 0 4 6 4 0 0 0 1 0 1 1 1 1 2 6 7 9 2 3 2 3 8 1 3 3 0 2 1 4 3 3 1 3 1 3 7 7 2 2 6 4 .0 2 2 1 1 2 0 6 1 2 8 0 0 0 0 3 1 0 2 0 0 1 1 1 3 1 2 2 0 0 1 3 5 5 6 5 3 0 1 0 4 1 0 6 0 0 0 0 0 1 0 1 0 0 0 0 0 1 2 . 0 4 5 5 3 9 1 3 1 1 2 3 2 1 2 8 8 5 6 3 0 6 5 5 2 3 3 2 5 . 0 % . 1 0 0 . 0 % 1 0 0 . 0 % 6 6 . 7 % 3 3 . 3 % 3 0 . 8 % 4 5 . 5 % 4 3 . 4 % 7 6 . 2 % 8 2 . 1 % 8 7 . 5 % 7 8 . 6 % 5 3 . 3 % 6 9 . 2 % 5 5 . 8 % 3 6 . 3 % 5 0 . 0 % 0 . 0 % 0 . 0 % 3 3 . 3 % 3 3 . 3 % 3 8 . 5 % 4 5 . 5 % 2 6 . 1 % 2 3 . 8 % 1 0 . 7 % 0 . 0 % 1 7 . 9 % 1 3 . 3 % 1 . 5 % 0 . 0 % 1 8 . 2 % 2 9 1 5 8 3 1 1 0 3 4 1 5 4 8 3 7 1 6 1 . 2 % 1 2 . 9 % ** *** P r i m a r i l y p u l p and p a p e r : 1 9 4 5 - 6 9 ; i n c l u d e s wood p r o d u c t s , 1 9 7 0 - 7 5 ( S t a n d a r d I n d u s t r i a l C l a s s i f i c a t i o n Codes a r e s e t o u t i n A p p e n d i x D . ) Covers 1 9 4 5 - 6 9 . Much o f t r a n s p o r t a t i o n l i e s w i t h i n the f e d e r a l p r i v a t e s e c t o r j u r i s d i c t i o n , F o r e s t p r o d u c t s i n c l u d e p u l p , e t c . , l o g g i n g e t c . , and wood p r o d u c t s . T A B L E 9 R e a s o n s f o r W i l d c a t S t r i k e s i n t h e J u r i s d i c t i o n o f B r i t i s h C o l u m b i a C l a s s i f i e d by I n d u s t r y : 1 9 4 5 - 7 5 I N D U S T R Y R E A S 0 N Row T o t a l P e r c e n t (%) Wages C o m f o r t S a f e t y J o b S e c u r i t y D e p l o y m e n t D i s c i p i i n e S c h e d u l i n g U n i o n Movement J u r i s d i c t i o n C o n t r a c t u a l M a t t e r s Mi s e e l -l a n e o u s FISHING 1 1 0 3 MINING 5 6 6 2 2 9 4 4 0 0 4 42 11 0 MANUFACTURING: Food a n d B e v e r a g e s P u l p , e t c . * 3 0 1 4 0 0 1 5 0 1 0 15 3 9 10 1 4 2 2 11 4 9 4 3 4 54 14 1 L o g g i n g , e t c . * * 19 6 5 6 3 16 3 11 0 3 6 78 20 4 Wood p r o d u c t s * * 4 2 4 8 1 16 6 7 2 5 3 58 15 2 PULP.LOGGING,WOOD 33 9 13 16 6 4 3 13 27 6 11 13 193 50 5 MANUFACTURING: M e t a l s 1 0 1 0 0 1 0 2 1 1 0 7 1 8 M a c h i n e r y * * * 3 0 0 0 0 0 2 3 3 0 1 12 3 1 M i s c e l l a n e o u s 4 0 0 1 6 0 4 1 3 1 20 5 2 MANUFACTURING 44 9 15 21 6 50 16 41 11 16 15 2 4 7 64 6 CONSTRUCTION 12 5 6 0 2 12 0 10 21 3 5 76 20 0 TRANSPORTATION 4 0 0 0 1 1 1 0 1 0 1 9 2 4 COMMUNICATIONS 0 0 0 0 0 0 0 0 0 0 0 0 • U T I L I T I E S 1 0 0 0 0 " 0 0 1 0 0 0 2 0 5 TRADE; 0 0 0 1 0 2 0 0 0 0 0 3 0 8 . S E R V I C E S : E d u c a t i o n a l 1 0 0 0 0 0 0 0 0 0 0 1 0 3 M u n i c i p a l 0 0 0 0 0 0 0 0 0 0 0 0 M i s c e l l a n e o u s 0 0 1 0 0 0 0 1 0 0 1 2 0 5 P r o v i n c i a l 0 0 0 0 0 0 0 1 0 0 1 2 0 5 F e d e r a l 0 0 0 0 0 0 0 0 0 0 0 0 TOTAL 6 8 20 28 24 11 74 21 5 8 33 19 26 382 •PERCENT (%) 1 7 . 8 5 . 2 7 . 3 6 . 3 2 . 9 1 9 . 4 5 . 5 1 5 . 2 8 . 6 5 . 0 6 . 8 P r i m a r i l y p u l p a n d p a p e r : 1 9 4 5 - 1 9 6 9 ; a l s o c o v e r s wood p r o d u c t s : 1970-75 C o v e r s : 1 9 4 5 - 6 9 I n c l u d e s h e a v y e q u i p m e n t , e l e c t r i c a l a n d t r a n s p o r t a t i o n m a c h i n e r y I l l to the 1970-75 upsurge o f u n l a w f u l s t r i k e s i n B r i t i s h C o l u m b i a . P r o f e s s o r Jamieson ( 1 9 6 2 , 410-411) has argued t h a t w i l d -c a t s t r i k e a c t i v i t y i n B r i t i s h Columbia conformed w i t h the t h e o r y o f s t r i k e a c t i v i t y t h a t K e r r and S i e g a l (1954) d e v e l o p e d . A c c o r d i n g to K e r r and S i e g e l , workers who are i s o l a t e d , s a y , i n work camps o r i n company towns and who are engaged i n h a r d p h y s i c a l l a b o u r s h a r e h a r d s h i p s , f r u s t r a t i o n s and e x p e r i e n c e s both o n - a n d - o f f - t h e -j o b . By c o n t r a s t , urban w o r k e r s , who l i v e f a r a p a r t and who i n p a r t i c u l a r s h a r e fewer o f f - t h e - j o b e x p e r i e n c e s w i t h t h e i r c o -w o r k e r s , make up a l e s s c o h e s i v e group than do the " i s o l a t e d m a s s e s . " K e r r and S i e g a l e s s e n t i a l l y assume t h a t the more e x p e r i e n c e s and f r u s t r a t i o n employees s h a r e , the more l i k e l y they w i l l " w i l d c a t " when a p o t e n t i a l w i l d c a t s t r i k e - t r i g g e r i n g i n c i d e n t takes p l a c e [cet. par. ). K - S , t h e r e f o r e , c o n c l u d e t h a t the " i s o l a t e d masses" s h o u l d be more prone to w i l d c a t than are urban l a b o u r e r s . In o t h e r w o r d s , the K-S t h e o r y p r e d i c t s t h a t , because o f s o c i a l p r e s s u r e s , a l a r g e r p r o p o r t i o n o f r u r a l b a r g a i n i n g u n i t s , as opposed t o urban b a r g a i n i n g u n i t s , w i l l w i l d c a t . T h i s p r e d i c t i o n was n o t t e s t e d e m p i r i c a l l y f o r B r i t i s h C o l u m b i a . The K-S t h e o r y presumably a l s o p r e d i c t s t h a t because the r u r a l - u r b a n c o m p o s i t i o n o f s o c i e t y changes so s l o w l y , t h e r e w i l l be l i t t l e v a r i a t i o n i n w i l d c a t s t r i k e a c t i v i t y from one y e a r to the n e x t {cet. par.). T h i s p r e d i c t i o n c l e a r l y d i d 112 n o t n e c e s s a r i l y o b t a i n f o r B r i t i s h Columbia data c o n c e r n i n g w i l d c a t s t r i k e s (see Table 2 a b o v e ) . I n d e e d , the s t r i k e c y c l e o f B r i t i s h Columbia was r e l a t e d to the b u s i n e s s c y c l e o f B r i t i s h C o l u m b i a , as n o t e d a b o v e . K e r r and S i e g a l ' s e m p i r i c a l f i n d i n g s c o n c e r n i n g the i n t e r -n a t i o n a l i n t e r i n d u s t r y p r o p e n s i t y to s t r i k e resemble my f i n d i n g s f o r B r i t i s h C o l u m b i a . They found t h a t c o n s t r u c t i o n , f o r e s t p r o d u c t s , m i n i n g and l o n g s h o r i n g , among o t h e r i n d u s t r i e s were r e l a t i v e l y s t r i k e -prone i n d u s t r i e s . My f i n d i n g s are t h a t , from 1945 through 1975, the most w i l d c a t - p r o n e i n d u s t r i e s i n B r i t i s h Columbia i n c l u d e d m i n i n g and t r a n s p o r t a t i o n , as w e l l a s , o f c o u r s e , f o r e s t p r o d u c t s and c o n s t r u c t i o n . (See T a b l e s 9 and 1 0 . ) L o n g s h o r i n g i s c a p t u r e d i n the s t a t i s t i c s f o r t r a n s p o r t a t i o n which are c l a s s i f i e d w i t h i n the f e d e r a l j u r i s d i c t i o n (see T a b l e TO). I t i s noteworthy t h a t l o n g -s h o r i n g i s an urban i n d u s t r y . S t r i c t l y s p e a k i n g , the K-S t h e o r y would p r e d i c t s t h a t l o n g s h o r i n g be a r u r a l i n d u s t r y . The K e r r and S i e g a l t h e o r y does n o t y i e l d t e s t a b l e hypotheses c o n c e r n i n g the causes o f w i l d c a t s t r i k e s . In p a r t i c u l a r , i t does n o t e x p l a i n how the v a r i o u s causes o f w i l d c a t s t r i k e s a r e r e l a t e d to s h a r e d e x p e r i e n c e s o r s h a r e d f r u s t r a t i o n s and how they m i g h t vary from one i n d u s t r y to a n o t h e r . R a t h e r , i t m a i n l y d e s c r i b e s a k i n d o f s o c i a l bond t h a t might i n d u c e a group o f employees to w i t h d r a w t h e i r l a b o u r s e r v i c e s c o l l e c t i v e l y . Some u n d e r s t a n d i n g o f the causes o f w i l d c a t s t r i k e s can be d e r i v e d from data c o n c e r n i n g the reasons t h a t employees s t a t e d TABLE 10 W i l d - C a t S t r i k e s i n the F e d e r a l J u r i s d i c t i o n w i t h i n B r i t i s h Columbia C l a s s i f i e d by I n d u s t r y : 1945-75 INDUSTRY R E A S 0 u cu o o - O o •~0 +-> c cu E >> o Q. CU Q CO c o to C7) 3 -a cu .c: o oo CD E cu > o s : sz o c o •r— +-> O • i— -a to •r-s-•73 Z3 (/) 4-> S-O CU m •+-> i- +J +J <a c s : o c_> o CD CU O to cu M— (0 OO to ai +J s-o M— E o o Row T o t a l P e r c e n t ' (X) T r a n s p o r t a t i o n Communications S e r v i c e s : F e d e r a l 26 7 3 72.2 1 9 . 4 84 Col umn -Total P e r c e n t (%) 8 . 3 11.1 1 9 . 5 2 2 . 2 , 8 . 3 2 . 8 2 5 . 0 2 . 8 36 114 f o r engaging i n w i l d c a t s t r i k e s . However t h e r e i s a c a v e a t : the r e a s o n s ' s t a t e d need n o t be the u n d e r l y i n g c a u s e . D i s c i p l i n e ( 1 9 . 4 % ) , wages (17.84%-), the union movement ( 1 5 . 2 % ) , j u r i s d i c t i o n ( 8 . 6 % ) , c o m f o r t ( 5 . 2 % ) , and s a f e t y (7.3%) were among the reasons t h a t employees most o f t e n c i t e d f o r w a l k i n g o f f d u r i n g the terms o f c o l l e c t i v e a g r e e m e n t s . (See Table 9 . ) P r e d i c t a b l y , s a f e t y d i s p u t e s o c c u r r e d p r i m a r i l y i n f o r e s t p r o d u c t s (46%), c o n s t r u c t i o n (21%) and m i n i n g (21%), w h i l e j u r i s d i c t i o n a l d i s p u t e s took p l a c e i n c o n s t r u c t i o n (64%), f o r e s t p r o d u c t s (18%) and m a n u f a c t u r i n g o t h e r than f o r e s t p r o d u c t s (15%).(See T a b l e 9 . ) T r a n s p o r t a t i o n i n the f e d e r a l j u r i s d i c t i o n ( e . g . , dry d o c k s , s h i p p i n g and l o n g s h o r i n g ) a c c o u n t e d f o r e i g h t p e r c e n t (3/36) o f a l l j u r i s d i c t i o n a l d i s p u t e s i n B r i t i s h C o l u m b i a . Rees (1952) a t t e m p t e d to a d d r e s s what i t i s t h a t causes o r provokes employees to " h i t the b r i c k s " w h i l e a c o l l e c t i v e a g r e e -ment i s i n f o r c e - ( o r " c l o s e d " ) . He views the w i l d c a t s t r i k e as a c a t h a r t i c d e v i c e i n d e e d as a " p r e s s u r e - v a l v e " f o r r e l e a s i n g p e n t - u p f r u s t r a t i o n s . As s u c h , Rees 1 t h e o r y i s n o t d i r e c t l y t e s t a b l e , s i n c e i t o b v i o u s l y i s v e ry d i f f i c u l t to p r e d i c t e m p i r i c a l l y when a person has r e a c h e d h i s o r her " f r u s t r a t i o n t h r e s h o l d . " B u t , Rees l i n k s employees' t o l e r a n c e l i m i t s f o r p e n t - u p f r u s t r a t i o n s - i n v e r s e l y w i t h the degree o f j o b s e c u r i t y they e n j o y . As the unemployment r a t e d e c r e a s e s ( i n c r e a s e s ) , the more ( l e s s ) s e c u r e s h o u l d e m p l o y e e s ' o n " S e e Appendix E f o r a d e t a i l e d e x p l a n a t i o n o f what the s u b -reasons were t h a t c o m p r i s e d the v a r i o u s reasons c i t e d f o r w i l d c a t s t r i k e s : 115 j o b s become and t h e g r e a t e r ( s m a l l e r ) w i l l be t h e i r chances o f f i n d i n g a l t e r n a t i v e employment d u r i n g a s t r i k e . Hence, employees w i l l become more ( l e s s ) s t r i k e - p r o n e . M o r e o v e r , t h e l o w e r ( h i g h e r ) i s t h e p r o b a b i l i t y t h a t t h e employer can h i r e s t r i k e b r e a k e r s . The Rees 1 t h e o r y , however, f a i l s t o i n c o r p o r a t e o t h e r f a c t o r s t h a t m i g h t i n d u c e an employee t o w i l d c a t . L e t us suppose f o r i n s t a n c e a group o f employees were l o c k e d i n t o a m u l t i - y e a r c o n t r a c t which was c o n c l u d e d p r i o r t o an i n f l a t i o n a r y p e r i o d . Suppose a l s o t h a t t h e employees f e l t t h a t t h e i r wages were f a l l i n g b e h i n d t h e wages t h a t employees i n t h e i r " o r b i t o f c o m p a r i s o n " were r e c e i v i n g , s a y , because t h e o t h e r e m p l o y e e s ' c o n t r a c t s were o f s h o r t e r d u r a t i o n . P r e s u m a b l y , t h e g r e a t e r t h e wage d i s p a r i t y o r " c a t c h u p " t h a t seems t o be i n o r d e r , t h e more prone t h e w o r k e r s w i l l be t o p r o t e s t t h e e r o s i o n o f t h e i r economic s t a n d i n g v i s - a - v i s t h e o t h e r employees (or t h e s t a n d a r d o f l i v i n g t h e y e x p e c t t o m a i n t a i n ) . What we have d e s c r i b e d i n c l u d e s t h e c o s t - o f - l i v i n g a d j u s t m e n t o r COLA s t r i k e . 3 0 There a r e a t l e a s t two r e a s o n s f o r a d d i n g to R e e s ' t h e o r y t h e "COLA s t r i k e s y n d r o m e . " F i r s t , COLA s t r i k e s have t a k e n p l a c e i n B r i t i s h Columbian For e x a m p l e , t h e r e was an o u t b r e a k o f COLA s t r i k e s d u r i n g t h e f i r s t decade f o l l o w i n g t h e end o f World War I I . More r e c e n t l y , t h e r e were a number o f COLA s t r i k e s d u r i n g t h e d o u b l e - d i g i t i n f l a t i o n o f the 1970s i n B r i t i s h C o l u m b i a . 3 1 S e c o n d , 30 T h i s i s not to say t h a t Rees d i d not r e c o g n i z e t h a t chang i n t h e c o s t o f l i v i n g were a cause o f s t r i k e s , f o r he d i d ( 1 9 5 2 , 382) However, Rees d i d not emphasize the r e l a t i o n s h i p between changes i n t h e c o s t o f l i v i n g and p e n t - u p f r u s t r a t i o n s t o ' t h e e x t e n t t h a t i t was emphasized a b o v e . 3 1 See Meadows (1974) and Meadows ( 1 9 7 5 ) . 116 what employees p e r c e i v e to be an e r o s i o n o f t h e i r wages, e i t h e r r e l a t i v e to o t h e r employees o r r e l a t i v e to the s t a n d a r d o f l i v i n g , presumably w i l l i n c r e a s e t h e i r l e v e l s o f f r u s t r a t i o n , c a u s i n g them to h i t t h e i r " f r u s t r a t i o n t h r e s h o l d " more q u i c k l y than o t h e r w i s e . The l a t t e r t h e o r y , the R e e s - c u m - e c o n o m i c - e r o s i o n t h e o r y o f w i l d c a t s t r i k e s , i s the t h e o r y t h a t w i l l be used t o t e s t e m p i r i c a l l y the l a b o u r l a w - s t r i k e r e l a t i o n s h i p i n B r i t i s h C o l u m b i a . 3 . 5 C o n c l u s i o n Labour l e g i s l a t i o n e v o l v e d from s t r e s s i n g c o m p u l s i o n , l i t i g a t i o n and p u n i t i v e remedies towards s t r e s s i n g accommodation where a d j u d i c a t i o n was a l a s t r e s o r t . The g e n e r a l t r e n d , c y c l i c a l p a t t e r n and i n d u s t r i a l d i s t r i b u t i o n o f s t r i k e a c t i v i t y was examined f o r each o f the t h r e e c l a s s e s o f s t r i k e s : f i r s t agreement s t r i k e s , c o n t r a c t renewal s t r i k e s and s t r i k e s d u r i n g the t e r m . I t was i n f e r r e d s t a t i s t i c a l l y t h a t the t h r e e s t r i k e s e r i e s c o n s t i t u t e d d i f f e r e n t k i n d s o f s t r i k e s . Hence they w i l l be d e a l t w i t h s e p a r a t e l y i n the e m p i r i c a l s t u d y t h a t f o l l o w s . Data were p r e -s e n t e d c o n c e r n i n g the f r e q u e n c y w i t h which governments o f B r i t i s h Columbia i n v o k e d s t r i k e - e n d i n g measures which were weapons from the a r s e n a l o f weapons t h e o r y . 117 A l t h o u g h t h e r e are some i n t e r e s t d i s p u t e s t r i k e s where employees "jump the gun" and walk o f f b e f o r e they can l a w f u l l y s t r i k e , the preponderance o f u n l a w f u l s t r i k e s i n B r i t i s h Columbia were w i l d c a t s t r i k e s . P a r t l y f o r t h i s r e a s o n , we a n a l y z e d the w i l d c a t s t r i k e a c t i v i t y i n B r i t i s h C o l u m b i a . A d e t e r i o r a t i o n o f l a b o u r r e l a t i o n s i n the f o r e s t p r o d u c t s i n d u s t r y o f B r i t i s h Columbia seems to have s u s t a i n e d the "wave" o f u n a u t h o r i z e d s t r i k e s t h a t took p l a c e i n B r i t i s h Columbia d u r i n g 1970-75s C o s t - o f - 1 i v i n g - a d j u s t m e n t o f COLA s t r i k e s a l s o took p l a c e a t t h i s t i m e , p a r t i c u l a r l y d u r i n g 1974 and 1975, when d o u b l e - d i g i t i n f l a t i o n " f u e l l e d " them. Of c o u r s e , wage and p r i c e i n f l a t i o n may have p r e c i p i t a t e d a n d / o r - s u s t a i n e d the wave o f p r o t e s t s t r i k e s t h a t took p l a c e i n the f o r e s t p r o d u c t s i n d u s t r i e s o f B r i t i s h Columbia d u r i n g 1970-75. The K e r r and S i e g a l t h e o r y o f w i l d c a t s t r i k e s p r o v i d e s an e x p l a n a t i o n o f a k i n d o f s o c i a l bond w h i c h i n f l u e n c e s , a t the l e a s t , the p r o p o r t i o n o f the b a r g a i n i n g u n i t t h a t w a l k s o f f the j o b , en masse. Rees 1 " p r e s s u r e - v a l u e " t h e o r y o f " p r o t e s t " s t r i k e s was m o d i f i e d to a l l o w f o r e r o s i o n s i n employees economic s t a n d i n g s . The l a t t e r t h e o r y w i l l be a p p l i e d to s t r i k e d a t a to d e t e r m i n e the e f f e c t s o f changes i n l a b o u r l e g i s l a t i o n on s t r i k e a c t i v i t y i n B r i t i s h C o l u m b i a . The e m p i r i c a l f i n d i n g s o f the c u r r e n t s t u d y w i l l be p r e s e n t e d i n C h a p t e r 4 . 118 CHAPTER 4 THE EFFECTS OF CHANGES IN LABOUR LEGISLATION ON STRIKE ACTIVITY IN BRITISH COLUMBIA: 1945-75 Labour r e l a t i o n s e x p e r t s and p r a c t i t i o n e r s as w e l l as members o f the p u b l i c have doubted the e f f e c t i v e n e s s o f changes i n l e g i s l a t i o n i n r e d u c i n g e i t h e r the i n c i d e n c e o r the d u r a t i o n o f s t r i k e a c t i v i t y i n Canada. However, t h e i r arguments amounted t o a s s e r t i o n s - , s i n c e they l a c k e d e m p i r i c a l s u b s t a n t i a t i o n . S e v e r a l r e s e a r c h e r s , i n c l u d i n g Vanderkamp ( 1 9 7 0 ) , Smith (1972) and Walsh (1975) used r e g r e s s i o n a n a l y s i s t o i n v e s t i g a t e s t r i k e a c t i v i t y i n Canada, b u t none o f them t e s t e d f o r the e f f e c t s o f c h a n g e s . i n l e g i s l a t i o n on s t r i k e a c t i v i t y . A s h e n f e l t e r and Johnson (1969) employed r e g r e s s i o n a n a l y s i s to t e s t f o r the e f f e c t s o f the enactment o f the Landrum-G r i f f i n A c t on s t r i k e a c t i v i t y i n the U n i t e d S t a t e s . A - J reasoned t h a t p r o v i s i o n s i n the A c t p r o m o t i n g " u n i o n democracy" would g e n e r a t e r a n k - a n d - f i l e m i l i t a n c y , which would m a n i f e s t i t s e l f i n an i n c r e a s e i n s t r i k e a c t i v i t y . T h e i r t e s t c o n s i s t e d o f comparing two r e g r e s s i o n e s t i m a t e s . One i n c l u d e d , but the o t h e r e x c l u d e d , an i n t e r c e p t dummy v a r i a b l e which remained " o n " w h i l e the Landrum-G r i f f i n A c t (LG) was i n f o r c e . 1 A - J found t h a t the LG m o d i f i c a t i o n H h e o t h e r r e g r e s s o r s i n c l u d e d an i n d i c a t o r o f the f i r m ' s a b i l i t y to p a y , the unemployment r a t e and measures o f changes i n employees' r e a l wages, i n c l u d i n g the p e r c e n t a g e change o f the consumer p r i c e i n d e x . 119 was a s s o c i a t e d w i t h a h i g h e r R and t h a t the c o e f f i c i e n t o f LG s u g g e s t e d " . . . a modest, b u t s i g n i f i c a n t i n c r e a s e o f about e i g h t y -e i g h t s t r i k e s p e r q u a r t e r o v e r the p r e - L a n d r u m - G r i f f i n p e r i o d ( 1 9 6 9 , 4 7 ) . " The c u r r e n t t h e o r y a p p l i e s the A - J m e t h o d o l o g y , b u t t h i s s t u d y d i f f e r s from A - J ' s i n a t l e a s t f i v e w a y s . F i r s t , t h i s s t u d y 2 i s r e g i o n a l , as opposed to n a t i o n a l , i n s c o p e . S e c o n d , t h e r e are s e p a r a t e r e g r e s s i o n s f o r f i r s t agreement s t r i k e s , c o n t r a c t renewal s t r i k e s and s t r i k e s d u r i n g the t e r m , i n s t e a d o f one r e g r e s s i o n f o r a l l s t r i k e s . T h i r d , n o t ^ j u s t one t h e o r y , b u t two t h e o r i e s o f s t r i k e a c t i v i t y are used to m o t i v a t e the economic v a r i a b l e s used as r e g r e s s i o n s , as e x p l a i n e d b e l o w . F o u r t h , a s o c i o - e c o n o m i c v a r i a b l e , the average age o f the n o n - a g r i c u l t u r a l w o r k f o r c e , i s i n c l u d e d among the r e g r e s s o r s . F i f t h , i n c i d e n c e measures o f s t r i k e a c t i v i t y , which s e r v e as r e g r e s s a n t s , are c o n s t r u c t e d from a c t u a l c o n t r a c t e x p i r y d a t a , r a t h e r than s i m u l a t e d w i t h dummy v a r i a b l e schemas. B r i t i s h Columbia was s e l e c t e d f o r t h i s s t u d y because the l e v e l o f s t r i k e a c t i v i t y i n the p r o v i n c e i s one o f the h i g h e s t i n Canada and because governments o f B r i t i s h Columbia o c c a s i o n a l l y e n a c t e d n o v e l , and a t t i m e s , d r a m a t i c methods f o r r e g u l a t i n g l a b o u r r e l a t i o n s i n the p r o v i n c e . A c c o u n t i n g f o r o v e r e l e v e n p e r c e n t o f Canada's p o p u l a t i o n , B r i t i s h Columbia 2 R e g i o n a l , as opposed to n a t i o n a l , economic f a c t o r s a p p a r e n t l y e x e r t a g r e a t e r i n f l u e n c e on c o l l e c t i v e b a r g a i n i n g , p a r t i c u l a r l y s t r i k e a c t i v i t y . S e e , f o r e x a m p l e , the s t u d i e s by Eaton ( 1 9 7 3 ) , Garner (1977) and Jamieson (1977b) which are e x p l a i n e d above on page 10. 120 has a c c o u n t e d f o r about e l e v e n p e r c e n t o f C a n a d a ' s s t r i k e a c t i v i t y . One o f B r i t i s h C o l u m b i a ' s l a b o u r s t a t u t e s , the Labour Code o f B r i t i s h C o l u m b i a , which was e n a c t e d i n 1973 a n d . w h i c h i s c o v e r e d i n the c u r r e n t s t u d y , was (and s t i l l i s ) c o n s i d e r e d the most i n n o v a t i v e and 3 p r o g r e s s i v e l a b o u r r e l a t i o n s s t a t u t e i n N o r t h A m e r i c a . 4 .1 The R e g r e s s i o n E q u a t i o n s Two t h e o r i e s s u g g e s t the r e g r e s s i o n e q u a t i o n s t o be e s t i m a t e d . One t h e o r y i s the s t r i k e - a s - a n - i n v e s t m e n t t h e o r y o f b a r g a i n i n g t h a t was p r e s e n t e d i n C h a p t e r 2 ; the o t h e r i s the t h e o r y o f w i l d c a t s t r i k e s t h a t was p r e s e n t e d i n C h a p t e r 3 . The r e g r e s s i o n e q u a t i o n w h i c h t h e f o r m e r t h e o r y s u g g e s t s w i l l be a p p l i e d s e p a r a t e l y t o f i r s t agreement s t r i k e s and c o n t r a c t renewal s t r i k e s , w h i l e the r e g r e s s i o n e q u a t i o n t h a t the l a t t e r t h e o r y s u g g e s t s o b v i o u s l y w i l l be a p p l i e d t o s t r i k e s d u r i n g t h e t e r m . There a r e two reasons f o r d e a l i n g w i t h f i r s t agreement ~ s t r i k e s and c o n t r a c t renewal s t r i k e s s e p a r a t e l y . F i r s t , t h e b a r g a i n -i n g t h e o r y a p p l i e s s e p a r a t e l y t o t h e s e two k i n d s o f s t r i k e s (see p. 46 a b o v e ) . F i r s t agreement n e g o t i a t i o n s and s t r i k e s t y p i c a l l y i n v o l v e more p r e c e d e n t - s e t t i n g i s s u e s and more t r a d e o f f s , than do c o n t r a c t renewal n e g o t i a t i o n s and s t r i k e s . M o r e o v e r , 2 a F o r 1973-75 p o p u l a t i o n f i g u r e s see I n t e r n a t i o n a l Labor Law C o m m i t t e e , S e c t i o n o f Labor R e l a t i o n s Law, American Bar A s s o c i a t i o n (1977, 8 ) . Canada-wide s t r i k e s t a t i s t i c s c o v e r i n g 1975-78 were o b t a i n e d from Labour Canada. B r i t i s h Columbia s t r i k e s t a t i s t i c s f o r 1975-77 come from B r i t i s h Columbia M i n i s t r y o f L a b o u r , Labour R e s e a r c h B u l l e t i n 6 ( J a n u a r y 1978, 1 5 ) . 3 S e e , f o r e x a m p l e , W e i l e r 1976, 7 4 , and M o r r i s ( 1 9 7 7 ) , . e s p . 8 9 . 121 the f o r m e r presumably are more l i k e l y t o end i n " r u i n a t i o n " than are the l a t t e r . I n d e e d , as i s i n d i c a t e d i n Table 5 a b o v e , f i r s t agreement s t r i k e s i n B r i t i s h Columbia c u l m i n a t e d more f r e q u e n t l y i n the u n i o n ' s abandoning the s t r i k e , i n s t r i k e r s b e i n g r e p l a c e d and i n the . o p e r a t i o n s b e i n g c l o s e d than d i d c o n t r a c t renewal s t r i k e s d u r i n g 1 9 4 5 - 7 5 . S e c o n d , i t was i n f e r r e d above t h a t t h e r e was a s t a t i s t i c a l d i f f e r e n c e i n k i n d between c o n t r a c t renewal s t r i k e s and f i r s t agreement s t r i k e s (see pp. 98 - 102 a b o v e ) . F i r s t agreement s t r i k e s , f o r e x a m p l e , g e n e r a l l y are o f much l o n g e r d u r a t i o n than c o n t r a c t renewal s t r i k e s . A r e g r e s s i o n e q u a t i o n which r e f l e c t s the s t r i k e - a s - a n -5 i n v e s t m e n t and u n c e r t a i n t y f e a t u r e s o f the b a r g a i n i n g t h e o r y i s S t = I + a X l t + b X 2 t + c X 3 t + d X 4 t + f X 5 t + ( g i D u + 9 2 D 2 t + — + 9 i D i t + " ' + 9 k D k t ) + e t ; ' • ' ( 1 2 ) where the s u b s c r i p t , t , measures time and where e^ i s the e r r o r t e r m . S s t a n d s f o r s t r i k e measure and {D-j , « " , D ^ . ••• ,D| < } i s the s e t o f dummy v a r i a b l e s which r e p r e s e n t changes i n l a b o u r l e g i s l a t i o n . I i s the i n t e r c e p t t e r m , w h i l e the s e t o f r e g r e s s o r s , {X-j ^ . X ^ . X ^ . X ^ } i s composed o f f o u r economic " d e t e r m i n a n t s " o f s t r i k e a c t i v i t y (X-ijXgjXgs and X^) s u g g e s t e d by the b a r g a i n i n g t h e o r y o f C h a p t e r 2 and one s o c i o - e c o n o m i c v a r i a b l e ( X c ) . o ^For an e x p l a n a t i o n o f how these v a r i a b l e s are s u g g e s t e d by the b a r g a i n i n g t h e o r y o f C h a p t e r 2 , see p p . 5 0 - 53 and 69 - 7 3 . 122 The r e g r e s s a n t , S , w i l l be r e p l a c e d w i t h t h e s t r i k e measures NS^ = number o f f i r s t agreement s t r i k e s NS2 = number o f c o n t r a c t renewal s t r i k e s NS^/C = number o f f i r s t agreement s t r i k e s (NS^) d i v i d e d by t h e number o f new c e r t i f i c a t e s (C) NS^/X = number o f c o n t r a c t renewal s t r i k e s (NS^) d i v i d e d by the number o f c o n t r a c t e x p i r i e s (X) DUR^  average d u r a t i o n o f f i r s t agreement s t r i k e s DUR2 = average d u r a t i o n o f c o n t r a c t renewal s t r i k e s . NS^/C, NS^/X, DUR^, and D U ^ were s u g g e s t e d by the b a r g a i n i n g t h e o r y o f C h a p t e r 2 . ^ NS^ and HS^ were i n c l u d e d so t h a t we can compare our r e s u l t s w i t h t h e r e s u l t s o f e a r l i e r s t u d e n t s o f s t r i k e a c t i v i t y , who used t h e number and d u r a t i o n o f s t r i k e s as r e g r e s s a n t s . NS^/C and NS^X measure the i n c i d e n c e o f s t r i k e a c t i v i t y and they a r e e m p i r i c a l e s t i m a t e s f o r the p r o b a b i l i t y t h a t "open" agreements w i l l e r u p t i n t o s t r i k e s . I n c i d e n c e measures a r e c o n s i d e r e d b e t t e r s t r i k e measures than a r e a b s o l u t e measures ( e . g . , NS^ and N S 2 ) , s i n c e they r e f l e c t t h e s t r u c t u r e o f b a r g a i n i n g — p a r t i c u l a r l y f l u c t u a t i o n s i n c o n t r a c t e x p i r a t i o n s o r t h e i s s u a n c e o f new c e r t i f i c a t e s . 7 See page 69 a b o v e . 7 S e e , f o r e x a m p l e , K e l l y , 1976, 1 - 3 . K e l l y d i d not d i s -c u s s the m e a s u r e , N S ^ C , i n h i s p a p e r . 123 The f o u r economic " d e t e r m i n a n t s " o f s t r i k e a c t i v i t y a r e X-| = ACPI. / C P I . = p e r c e n t a g e change i n the consumer p r i c e i n d e x (CPI) from y e a r t-1 to y e a r t ; X 2 = u • = unemployment r a t e X^ = P = f i r m ' s a b i l i t y to pay ( i . e . , p r o f i t s ) X* = | AW ./AW. _-| - 11 = a b s o l u t e v a l u e o f the d e v i a t i o n o f AW t/AW t_i from o n e ; and where AW./AW. i = r a t e o f change o f the p a s t two y e a r ' s changes i n comparable wage s e t t l e -— ments: A W ^ ( i . e . , W+j - W+>"|) b e i n g the change i n y e a r t and AWt-i ( i . e . , W t _ i -Wt_2) b e i n g the p r e v i o u s y e a r ' s change. I t s h o u l d be n o t e d t h a t X-j ( o r ACPI t /CPIj._-|) i s a proxy v a r i a b l e f o r the change i n r e c e n t l y n e g o t i a t e d comparable wage s e t t l e m e n t s (RNCWS). The b a r g a i n i n g t h e o r y o f C h a p t e r 2 s u g g e s t e d t h a t changes i n RNCWS were an economic " d e t e r m i n a n t " o f s t r i k e a c t i v i t y (see pp*. 50-53 a b o v e ) . Changes i n RNCWS are not i n c l u d e d i n (12) f o r two r e a s o n s . F i r s t , c o n t r a c t u a l wage r a t e s were n o t a v a i l a b l e . S e c o n d , p e r c e n t a g e i n c r e a s e s i n the consumer p r i c e i n d e x presumably w i l l c l o s e l y a p p r o x i -mate p e r c e n t a g e i n c r e a s e s i n RNCWS. ( S e e , f o r e x a m p l e , W a l s h , .1975, 5 0 ) . o S t r i k e - a s - a n - i n v e s t m e n t t h e o r i e s l i k e A - J ' s a l s o s u g g e s t t h a t X ] , X 2 , X 3 , and X 4 be the r e g r e s s o r s o f measures o f s t r i k e a c t i v i t y . ( S e e , f o r e x a m p l e , A - J ( 1 9 6 9 ) . ) 124 The economic " d e t e r m i n a n t s " o f i n t e r e s t d i s p u t e s t r i k e s (X-j , X 2 , X 3 ' and X^) e x e r t an ambiguous i m p a c t on s t r i k e a c t i v i t y w i t h i n the c o n c e p t u a l framework o f the b a r g a i n i n g t h e o r y o f t h i s d i s s e r t a t i o n . (See pages 69 - 79 a b o v e . ) L a r g e l y because the l a t t e r i s a framework o f u n c e r t a i n t y and because wage and s t r i k e outcomes are jointly d e t e r m i n e d , i t i s very d i f f i c u l t to t r a c e the i n f l u e n c e o f economic d e t e r m i n a n t s on s t r i k e a c t i v i t y . In o t h e r w o r d s , we have no e x p e c t a t i o n s c o n c e r n i n g the s i g n s o f b , c , d , and f . By c o n t r a s t , e a r l i e r s t u d e n t s o f Canadian s t r i k e a c t i v i t y g e n e r a l l y s p e c u l a t e d o r p o s i t e d t h a t c a u s a l r e l a t i o n s h i p s e x i s t e d between economic d e t e r m i n a n t s and s t r i k e a c t i v i t y . Changes i n the consumer p r i c e i n d e x (X-j) were supposed to " l e a d to d i v e r g e n c e o f b a r g a i n i n g a t t i t u d e s " a n d , i n t u r n , " t o a r i s e i n s t r i k e a c t i v i t y (Vanderkamp, 1970, 2 1 9 ) . " The unemployment r a t e ( X 2 ) was deemed to be i n v e r s e l y r e l a t e d w i t h s t r i k e a c t i v i t y because t i g h t ( l o o s e ) l a b o u r markets p r o v i d e more ( f e w e r ) o p p o r t u n i t i e s f o r union members' f i n d i n g a l t e r n a t i v e employment and they make i t l e s s l i k e l y (more l i k e l y ) t h a t the f i r m can h i r e employees to r e p l a c e s t r i k e r s . 9 M o r e o v e r , t i g h t ( l o o s e ) p r o d u c t markets (assuming t h a t they accompany t i g h t ( l o o s e ) l a b o u r markets) s h o u l d i n c r e a s e ( d e c r e a s e ) e m p l o y e r s ' r e s i s t a n c e to u n i o n s ' demands, (see W a l s h , 1975, 4 9 . ) I n c r e a s e s i n p r o f i t s (X-~) were r e g a r d e d as h a v i n g an ambiguous e f f e c t on Replacements can be h i r e d f o r s t r i k e r s , b u t p r o f e s s i o n a l s t r i k e b r e a k e r s were banned from B r i t i s h Columbia i n 1973. See Labour Code o f B r i t i s h C o l u m b i a , s t a t u t e s o f B r i t i s h C o l u m b i a , 1973 (2nd S e s s . ) , c . 122, s s . 1 (1) and 3 ( 2 ) ( e ) . 125 s t r i k e ~ a c t i v i t y , i n d u c i n g union members to s t r i k e b u t employers to " s e t t l e a t a h i g h e r wage r a t e w i t h o u t a s t r i k e ( S m i t h , 1972, 6 6 9 ) . 1 , 1 0 I t was argued t h a t r a p i d r a t e s o f money wage i n c r e a s e (X^) r e f l e c t e d "an e n v i r o n m e n t accommodative, a n d , t h e r e f o r e , s h o u l d be i n v e r s e l y r e l a t e d to the l e v e l o f s t r i k e a c t i v i t y ( W a l s h , 1975, 5 0 ) . 1 , 1 1 Xg ( o r A ) , the average age o f the n o n - a g r i c u l t u r a l work f o r c e can be i n t e r p r e t e d as h a v i n g come from the s t r i k e - a s - a n - i n v e s t m e n t 12 t h e o r y o f c o l l e c t i v e b a r g a i n i n g p r e s e n t e d above. However, i t i s , Walsh used the p e r c e n t a g e change i n f i r m s ' p r o f i t s as a r e g r e s s o r i n h i s s t u d y . We are r e s t r i c t e d to u s i n g the a b s o l u t e v a l u e o f p r o f i t s because the b a r g a i n i n g t h e o r y o f C h a p t e r 2 i n v o l v e d the a b s o l u t e l e v e l o f f i r m p r o f i t s . ^ T h e r e i s a d i f f e r e n c e between my f o r m u l a t i o n o f the r a t e o f change o f changes i n comparable wage r a t e s ( X 4 ) and those o f Vanderkamp and W a l s h . The d i f f e r e n c e i s t h a t mine i n v o l v e s the a b s o l u t e v a l u e o f d e v i a t i o n s about o n e . My f o r m u l a t i o n a v o i d s an a s y m m e t r i c a l e f f e c t t h a t o c c u r s , f o r example i n W a l s h ' s f o r m u l a t i o n o f X 4 . Walsh p o s i t e d t h a t t h e r e was : an i n v e r s e r e l a t i o n s h i p between the r a t e o f wage change and s t r i k e a c t i v i t y , regardless of whether wages were increasing or diminishing ( 1 9 7 5 , 4 9 ) . I t i s n o t c l e a r , however, t h a t a d e c r e a s e i n the r a t e o f wage i n c r e a s e s w o u l d n o t b r i n g about an i n c r e a s e i n s t r i k e s o r l o c k o u t s as employers a t t e m p t e d to e n f o r c e wage i n c r e a s e r e d u c t i o n s and as unions r e s i s t e d them. 12 In t h i s v i e w , the average age o f the work f o r c e s e r v e s i n an i n v e r s e f a s h i o n as a proxy v a r i a b l e f o r e m p l o y e e s ' e x p e c t e d work span u n t i l r e t i r e m e n t . Employees i n the t h e o r y c a l c u l a t e the f u t u r e e a r n i n g s , t h a t are a s s o c i a t e d w i t h a p r o p o s e d wage s e t t l e m e n t , u s i n g t h e i r e x p e c t e d work s p a n s . They then compare these b e n e f i t s w i t h the b e n e f i t s t h a t they e x p e c t to. r e c e i v e f r o m , s a y , r e j e c t i n g the proposed s e t t l e m e n t , s t r i k i n g and s e t t l i n g i n f u t u r e . C l e a r l y , the o l d e r are the e m p l o y e e s , the s m a l l e r i s the e x p e c t e d work span and i n t u r n the f u t u r e e a r n i n g s t h a t are a s s o c i a t e d w i t h a p r o p o s e d s e t t l e m e n t . However, the average age o f B . C . ' s work f o r c e o n l y was b e -tween 39 and 41 y e a r s . The 25th and 26th y e a r s o f e a r n i n g s p a n , f o r i n s t a n c e , would c o n t r i b u t e r e l a t i v e l y l i t t l e to the p r e s e n t v a l u e o f the employees' f u t u r e income s t r e a m , g i v e n an i n t e r e s t r a t e o f s a y , 105. T h u s , the average age o f the work f o r c e w o u l d e x e r t a m a r g i n a l i n f l u -ence on the d e c i s i o n , whether o r n o t to s t r i k e . 126 p e r h a p s , b e s t r e g a r d e d as a s o c i o - e c o n o m i c v a r i a b l e t h a t was added to the f o u r economic d e t e r m i n a n t s o f i n t e r e s t d i s p u t e s t r i k e s . Walsh proposed i n c l u d i n g as a r e g r e s s o r i n r e g r e s s i o n a n a l y s i s o f s t r i k e a c t i v i t y , b u t he c o n s i d e r e d the i n c l u s i o n o f X^ o u t s i d e the scope o f h i s s t u d y (1975, 5 4 ) . Xg i s i n t e n d e d to c a p t u r e the h y p o t h e s i s t h a t the o l d e r p e o p l e become, the more c o n s e r v a t i v e they 13 become a n d , t h e r e f o r e , the l e s s s t r i k e - p r o n e they become. In a c c o r d a n c e w i t h t h i s h y p o t h e s i s , f s h o u l d be n e g a t i v e f o r r e g r e s s a n t s t h a t i n v o l v e e i t h e r the number o r i n c i d e n c e o f i n t e r e s t d i s p u t e s t r i k e s . I t i s i n t e n d e d t h a t the economic d e t e r m i n a n t s (X^, X^, X g , X^) a l o n g w i t h the s o c i o - e c o n o m i c v a r i a b l e , X^, " n o r m a l i z e " the measures o f s t r i k e a c t i v i t y t h a t w i l l be s u b s t i t u t e d f o r i n ( 1 2 ) . The dummy v a r i a b l e s r e p r e s e n t i n g changes i n l a b o u r l e g i s l a t i o n (D-j, ^ 2 ' " * ' u j > * * * » D | p s n o u l c ' e x p l a i n some ( b u t p r o b a b l y n o t a l l ) o f the v a r i a t i o n i n , S . t h a t i s n o t e x p l a i n e d by X n , X 2 , X g , X^, and X^. We s h a l l t e s t whether o r n o t the amount o f v a r i a t i o n i n S t h a t was " e x p l a i n e d " by--(D-j , • • • ,D^) was s t a t i s t i c a l l y s i g n i f i c a n t o r i n s i g n i f i c a n t . Each dummy v a r i a b l e , , w i l l assume a v a l u e o f one d u r i n g the y e a r i n which the s t a t u t e to which i t c o r r e s p o n d s was e n a c t e d , s u b j e c t to one p r o v i s o : t h a t i t came i n t o f o r c e b e f o r e midway through 13 Walsh c i t e s Jamieson (1973, 101-104) as b e i n g the s o u r c e o f the h y p o t h e s i s c o n c e r n i n g a g e , m i l i t a n c y and s t r i k e - p r o n e n e s s . 127 the y e a r . Each w i l l assume a v a l u e o f one d u r i n g some o r a l l s u c c e s s i v e y e a r s , and v a r i o u s dummy v a r i a b l e c o n f i g u r a t i o n s w i l l be s u b s t i t u t e d f o r . {D-j . D ^ . • •• ,0^} i n ( 1 2 ) , as e x p l a i n e d b e l o w . The economic d e t e r m i n a n t s t h a t w i l l be used i n a r e g r e s s i o n a n a l y s i s o f s t r i k e s d u r i n g the term come from the v a r i a n t o f Rees' (1952) " p r e s s u r e - v a l v e " t h e o r y o f w i l d c a t s t r i k e s t h a t was d e v e l o p e d i n C h a p t e r 3 . Employees i n t h a t t h e o r y have a t o l e r a n c e l i m i t f o r p e n t - u p f r u s t r a t i o n s . Once t h e i r t o l e r a n c e l i m i t s have been s u r p a s s e d , a w i l d c a t o r " p r o t e s t " s t r i k e w i l l take p l a c e . We added a f a c t o r to the f a c t o r t h a t Rees viewed as i n f l u e n c i n g employees' t o l e r a n c e l i m i t s f o r p e n t - u p f r u s t r a t i o n s . As Rees a r g u e d , i t i s e x p e c t e d t h a t employees w i l l l o w e r ( r a i s e ) t h e i r " f r u s t r a t i o n t h r e s h o l d s " as the unemployment r a t e d e c r e a s e s ( i n c r e a s e s ) , because they f e e l t h a t they e n j o y more ( l e s s ) j o b s e c u r i t y . In o t h e r words the l o w e r the unemployment r a t e , the g r e a t e r w i l l be the p r o b a b i l i t y t h a t employees w i l l f i n d a l t e r n a t i v e employment and the l o w e r w i l l be the p r o b a b i l i t y t h a t employers w i l l be a b l e to h i r e s t r i k e b r e a k e r s to r e p l a c e s t r i k i n g e m p l o y e e s . The f a c t o r t h a t we added was t h a t employees presumably w i l l a t t a i n t h e i r " f r u s t r a t i o n t h r e s h o l d s " q u i c k e r , the more they e x p e r i e n c e a d e t e r i o r a t i o n i n the wages they e a r n . T h e i r wages can d e t e r i o r a t e i n r e a l terms a n d / o r i n r e l a t i o n to r e c e n t wage s e t t l e -ments w h i c h a f f e c t those employees w i t h whom the employees compare 128 14 t h e m s e l v e s . The r e g r e s s o r , C P I ^ / C P I ^ o r w i l l be used as a proxy v a r i a b l e f o r both types o f e r o s i o n o f e m p l o y e e s ' e x p e c t e d 15 economic s t a n d a r d . M o r e o v e r , to the e x t e n t t h a t X^  and the average d u r a t i o n o f c o l l e c t i v e agreements are i n v e r s e l y c o r r e l a t e d , s h o u l d p i c k up the e f f e c t s o f the average d u r a t i o n o f c o l l e c t i v e agreements i n w i l d c a t s t r i k e s . The r e g r e s s i o n e q u a t i o n f o r s t r i k e s d u r i n g the term i s S t = I + 5 X u + E X 2 t + ( R 1 D l t + . . . + h - i D i t + . . . + V W + ~et • • • - ( ] 3 ) where the s u b s c r i p t , t , r e p r e s e n t s t i m e , e^ i s the e r r o r term and {D-j . D ^ , , ' " , D - . D ^ } are dummy v a r i a b l e s w h i c h r e p r e s e n t changes i n l a b o u r l e g i s l a t i o n which concern s t r i k e s d u r i n g the t e r m . The s t r i k e m e a s u r e s , S, are as f o l l o w s : NS^ = number o f s t r i k e s d u r i n g the term NS^/F = number o f s t r i k e s d u r i n g the term ( N S , ) d i v i d e d by the number o f c o n t r a c t s i n f o r c e ( F ) ; and DURg = average d u r a t i o n o f s t r i k e s d u r i n g the term I t i s e x p e c t e d t h a t 6 > 0 and c < 0 , as e x p l a i n e d above. 14 O b v i o u s l y , i n o r d e r f o r employees' r e a l wages t o d e c l i n e , t h e r e must e i t h e r n o t be a c o s t - o f - l i v i n g a d j u s t m e n t c l a u s e i n t h e i r c o n t r a c t o r i f t h e r e i s one i t must n o t keep wage i n c r e a s e s " i n l i n e " w i t h i n c r e a s e s i n the consumer p r i c e i n d e x . 15 As argued a b o v e , i t i s e x p e c t e d t h a t wage i n c r e a s e s w i l l c l o s e l y p a r a l l e l i n c r e a s e s i n the consumer p r i c e i n d e x . 129 4 . 2 The Data Both annual and q u a r t e r l y d a t a were c o l l e c t e d . U n f o r t u n -a t e l y , o n l y two d a t a s e r i e s c o v e r e d t h e e n t i r e 1945-75 time p e r i o d t h a t was s e l e c t e d f o r t h i s s t u d y . They were t h e s t r i k e d a t a and t h e e x p i r y d a t a , both o f which were used t o c o n s t r u c t the s t r i k e measures ( S ) . Two d a t a s e r i e s , average w e e k l y wages and s a l a r i e s (W) and t h e consumer p r i c e i n d e x (CPI) extended from 1950 t h r o u g h 1975. The r e -m a i n i n g t h r e e s e r i e s c o v e r e d v a r i o u s s u b - p o r t i o n s o f t h e 1950-75 t i m e p e r i o d . B e f o r e t a x c o r p o r a t i o n p r o f i t s i n B r i t i s h Columbia (P) r a n from 1966 t h r o u g h 1975 q u a r t e r l y and from 1960 t h r o u g h 1975 on an 17 annual b a s i s . The two s e r i e s t h a t drew on S t a t i s t i c s C a n a d a ' s Labour F o r c e Survey were complete from 1953 t h r o u g h 1975 and a l s o p r o -v i d e d s p o r a d i c o b s e r v a t i o n s from 1945 t h r o u g h 1953. The v a r i a b l e s were t h e unemployment r a t e (U) and t h e age c o m p o s i t i o n (A) o f t h e work f o r c e i n m a n u f a c t u r i n g i n B r i t i s h C o l u m b i a . P , U and A were b a c k c a s t , i n o r d e r t o p r o v i d e a comprehensive d a t a base c o v e r i n g 1950 t h r o u g h 18 1975, and i n o r d e r t o i n c r e a s e degrees o f f r e e d o m . I t would have been p r e f e r a b l e t o g a t h e r d a t a c o n c e r n i n g n e -g o t i a t e d wage s e t t l e m e n t s , which average w e e k l y wages and s a l a r i e s a r e a proxy v a r i a b l e f o r . B u t , d a t a on n e g o t i a t e d wage s e t t l e m e n t s a r e not r e a d i l y a v a i l a b l e . D i f f i c u l t i e s w i t h average weekly wages and s a l a r i e s i s t h a t t h e y a r e s e n s i t i v e t o changes i n such t h i n g s as hours o f w o r k , s h i f t s c h e d u l e s and employment, b u t n e g o t i a t e d wages c l e a r l y a r e n o t . 17 I t was attempted t o f i l l i n gaps i n the p r o f i t s e r i e s t h r o u g h S t a t i s t i c s Canada. U n f o r t u n a t e l y , t h e u s e r - c o s t s o f c u l l i n g p r o f i t d a t a f o r B r i t i s h Columbia from the computer were p r o h i b i t i v e . (See A. L. L o r l a n d , p e r s o n a l l e t t e r i n my p o s s e s s i o n , June 7 , 1977.) 18 The v a r i o u s d a t a s e r i e s used i n t h i s s t u d y a r e e x p l a i n e d i n Appendix C. 130 The s t r i k e d a t a c o n s i s t e d o f s t r i k e d a t a p u b l i s h e d by t h e B . C . Department o f L a b o u r . S t r i k e s were c l a s s i f i e d a c c o r d i n g t o c o n -t r a c t s t a t u s t h r u g h t h e use o f s t r i k e d a t a from a s i m i l a r p u b l i c agency which r e q u e s t e d t h a t i t not be named. The e x p i r y d a t a c o n s i s t e d o f two s a m p l e s : a random sample and a sample somewhat l a r g e r than (but i n c l u d i n g ) t h e random s a m p l e . Both samples were drawn from t h e f i l e s o f Labour C a n a d a ' s C o l l e c t i v e B a r g a i n i n g D i v i s i o n . Only t h e random sample was used t o c o n s t r u c t t h e number o f e x p i r i e s s e r i e s (X) and t h e number o f c o n t r a c t s i n f o r c e s e r i e s ( F ) . Both X and F, i n t u r n , were used t o c o n s t r u c t t h e i n c i d e n c e m e a s u r e s , NS2/X and NS^/F r e -s p e c t i v e l y . In c o n s t r u c t i n g N S 2 / X , i t was n e c e s s a r y t o d e t e r m i n e t h e a p -p r o p r i a t e l a g , i f a n y , . t h a t . e x i s t e d between t h e d a t e s when c o n t r a c t renewal s t r i k e s commenced and t h e d a t e s when t h e c o r r e s p o n d i n g c o l -19 l e c t i v e agreements e x p i r e d . The average l a g was 102.33 days i n B r i t i s h Columbia d u r i n g 1945-75. (See T a b l e 11.) For t h i s r e a s o n , i t was d e c i d e d t h a t X s h o u l d be l a g g e d o n e - q u a r t e r o f a y e a r b e h i n d N S 2 . I n c i d e n t a l l y , a t l e a s t two f a c t o r s seem t o i n f l u e n c e t h e l e n g t h o f t h e i n t e r v a l between e x p i r i e s and s t r i k e commencement d a t e s . One f a c t o r i s how c l o s e ( f a r ) t h e e x p i r a t i o n d a t a i s t o (from) t h e t i m e when weather c o n d i t i o n s a r e f a v o u r a b l e f o r s t r i k i n g . F o r i n s t a n c e , t h e f o r e s t p r o d u c t s i n d u s t r i e s , whose c o l l e c t i v e agreements e x p i r e d d u r i n g t h e l a t e S p r i n g o r Summer months, had t h e s h o r t e s t 19 The l a r g e r e x p i r y s a m p l e , r a t h e r than t h e random s a m p l e , was used so t h a t t h e matched e x p i r y - s t r i k e sample would be as l a r g e as p o s s i b l e . TABLE 11 The I n t e r v a l Between C o n t r a c t E x p i r i e s and S t r i k e Commencement Dates By C o n t r a c t S t a t u s i n B r i t i s h C o l u m b i a : 1 9 4 5 - 7 5 * * S t a t i s t i c s C o n t r a c t S t a t u s Sample S i z e (Number) (Number) Mean (Days) * S t a n d a r d D e v i a t i o n s (Days) Minimum I n t e r v a l (Days) * Maximum I n t e r v a l (Days) * Renewal 224 1 0 2 . 3 3 9 8 . 9 7 1 599 D u r i n g Term 141 - 3 2 7 . 3 3 245.75 -1042 -1 Any m i s s i n g e x p i r y d a t a means t h a t the i n t e r v a l s are overstated. ** I n c l u d e s s t r i k e s w i t h i n the f e d e r a l j u r i s d i c t i o n o f the Canada Labour Code and i t s p r e d e c e s s o r a c t s . 132 e x p i r y - s t r i k e i n t e r v a l i n B r i t i s h C o l u m b i a . (See T a b l e 1.2.) The Summer months a f f o r d t h e most f a v o u r a b l e weather c o n d i t i o n s f o r s t r i k i n g i n the f o r e s t p r o d u c t s i n d u s t r i e s . Summer weather c o n d i -t i o n s a l s o mean t h a t t h e Summer months a r e t h e most p r o p i t i o u s time t o s t r i k e i n c o n s t r u c t i o n , whose c o n t r a c t s e x p i r e d d u r i n g t h e l a t e W i n t e r o r e a r l y S p r i n g months and which had one o f t h e l o n g e s t 20 e x p i r y - s t r i k e i n t e r v a l s i n B r i t i s h C o l u m b i a . (See T a b l e 1 2 . ) The o t h e r f a c t o r i s whether t h i r d p a r t y i n t e r v e n t i o n i n t o c o n t r a c t d i s -putes i s compulsory o r v o l u n t a r y . Longer i n t e r v a l s a r e e x p e c t e d when t h e r e i s c o m p u l s i o n , as opposed t o v o l u n t a r i s m . I n d e e d , r e l a t i v e l y l o n g e x p i r y - s t r i k e i n t e r v a l s were a s s o c i a t e d w i t h t h e y e a r s d u r i n g which c o m p u l s o r y c o n c i l i a t i o n p r o c e d u r e s were p r a c t i c e d i n B r i t i s h Columbia ( 1 9 4 5 - 5 9 , 1950-59 and 1 9 6 0 - 6 9 ) . By c o n t r a s t , r e l a t i v e l y s h o r t e x p i r y - s t r i k e i n t e r v a l s o c c u r r e d d u r i n g 1970-75, t h e y e a r s d u r i n g which v o l u n t a r y m e d i a t i o n was p r a c t i c e d i n B r i t i s h C o l u m b i a . (See T a b l e 1 3 . ) Two economic i n d i c a t o r s , Gross B . C . P e r s o n a l Income and I n d i v i d u a l B . C . P e r s o n a l Income, proved t o be e x t r e m e l y good p r e -d i c t o r s o f annual B r i t i s h Columbia p r o f i t s as w e l l as o f each q u a r t e r ' s p r o f i t s i n B r i t i s h C o l u m b i a . The c o r r e l a t i o n c o e f f i c i e n t s between B r i t i s h Columbia annual p r o f i t s (a) and Gross B . C . P e r s o n a l Income (g) as w e l l as I n d i v i d u a l B . C . P e r s o n a l Income ( i ) were r e -s p e c t i v e l y r = .980 and r . = .981 f o r 1960-75. The c o r r e l a t i o n A d d i t i o n a l d a t a c o n c e r n i n g the monthly e x p i r y - s t r i k e r e l a t i o n s h i p a r e p r e s e n t e d below i n Appendix F. 133 TABLE 12 The I n t e r v a l Between C o n t r a c t E x p i r i e s and S t r i k e Commencement Dates C l a s s i f i e d by C o n t r a c t S t a t u s and I n d u s -t r i e s i n B r i t i s h C o l u m b i a : 1945-75 C o n t r a c t S t a t u s I n d u s t r y S t a t i ? ; t i c s Sample S i z e (Number) Mean ( D a y s ) * S t a n d a r d D e v i a t i o n ( D a y s ) * Minimum I n t e r v a l ( D a y s ) * Maximum I n t e r v a l ( D a y s ) * Renewal MINING 19 93 74 133 84 1 529 MANUFACTURING: Food & Beverages 16 9 2 . 44 6 0 . 07 1 204 P u l p , e t c . * * 19 6 6 . 16 9 2 . 41 1 363 L o g g i n g , e t c * * * 10 27. 80 30. 48 1 93 Wood P r o d u c t s * * * 3 9 0 . 67 6 6 . 36 15 139 Metal P r o d u c t s 11 8 2 . 82 128. 33 2 438 M a c h i n e r y * 13 5 1 . 54 5 1 . 55 1 168 M i s c . Manu. 29 8 6 . 35 6 0 . 00 2 215 CONSTRUCTION 15 122. 07 115. 52 1 384 TRANSPORTATION** 30 118. 13 8 6 . 47 7 404 TRADE 14 165. 86 132. 62 2 419 SERVICES: E d u c a t i o n 6 115. 83 8 6 . 57 21 419 M u n i c i p a l 27 132. 15 78. 20 23 305 M i s c e l l a n e o u s 9 115. 33 6 8 . 07 11 247 D u r i n g Term MINING 21 - 3 7 7 . 24 239. 35 -831 - 2 3 MANUFACTURING: Food &, Beverages 9 - 3 5 6 . 00 244. 78 - 6 5 3 - 5 P u l p , e t c . * * 21 - 2 8 7 . 43 2 5 1 . 14 -722 - 2 L o g g i n g , e t c . * * * 40 - 3 6 0 . 45 190. 22 -661 -1 Wood P r o d u c t s * * * 8 - 1 8 0 . 13 177. 12 -449 -7 Metal P r o d u c t s 4 - 8 2 . 50 9 1 . 32 -197 - 4 M a c h i n e r y t 4 - 6 0 3 . 00 418. 02 -1042 - 3 5 M i s c . Manu. 6 - 2 9 0 . 83 140. 36 -486 - 6 7 CONSTRUCTION 10 - 4 4 4 . 40 417. 41 -1034 - 3 TRANSPORTATION T + COMMUNICATIONS + + 6 - 9 0 . 00 8 8 . 31 -255 -12 5 - 4 4 1 . 00 38. 63 - 4 9 5 t 3 9 3 TRADE 2 - 4 0 8 . 50 143. 54 -510 -307 SERVICES: M u n i c i p a l 5 i -127. 80 103. 44 - 2 8 8 - 5 3 * Any m i s s i n g e x p i r y d a t a means t h a t the i n t e r v a l s a r e o v e r s t a t e d . ** P r i m a r i l y p u l p and p a p e r : 1 9 4 5 - 6 9 ; i n c l u d e s l o g g i n g , e t c . and wood p r o d u c t s : 1970-75. * * C o v e r s : 1 9 4 5 - 6 9 . I n c l u d e s heavy e l e c t r i c a l and t r a n s p o r t a t i o n ^ m a c h i n e r y . Much o f t h i s i n d u s t r y l i e s i n the f e d e r a l j u r i s d i c t i o n . TABLE 13 The I n t e r v a l Between C o n t r a c t E x p i r i e s and S t r i k e Commencement Dates C l a s s i f i e d by C o n t r a c t S t a t u s i n the J u r i s d i c t i o n o f B r i t i s h C o l u m b i a : 1945-75 S t a t i s t i c s Sample S i z e Mean S t a n d a r d D e v i a t i o n Minimum I n t e r v a l Maximum I n t e r v a l C o n t r a c t S t a t u s Years (Number) (Days)* ( D a y s ) * ( D a y s ) * ( D a y s ) * Renewal 1940-45 22 115.55 130.61 2 529 1950-59 58 127.85 77.10 2 419 1960-69 18 152.33 106.95 15 412 1970-75 107 78.13 102.12 1 599 D u r i n g Term 1940-45 5 - 1 5 6 . 4 0 153.46 - 3 5 5 -7 1950-59 26 - 2 4 9 . 5 4 2 4 3 . 3 3 -862 -1 1960-69 4 - 4 7 5 . 7 5 381.12 -1042 -246 1970-75 94 - 3 5 6 . 9 3 2 4 0 . 8 9 -1034 - 2 * Any m i s s i n g e x p i r y data means t h a t the i n t e r v a l s a r e o v e r s t a t e d . 135 c o e f f i c i e n t s f o r each q u a r t e r ' s ( 1 , 2 , 3 , 4) p r o f i t s were as f o l l o w s from 1966 t o 1975: r. = .970 r ' = . 9 5 9 - r~ = .973 r. = . 9 6 0 1g 2g 3g 4g r u = .962 r 2 i = .962 r 3 i = .975 = . 9 6 3 The f i n d i n g , t h a t both Gross and I n d i v i d u a l B . C . P e r s o n a l Income a r e v e r y c l o s e s u b s t i t u t e s f o r both annual and each q u a r t e r ' s B . C . p r o f i t s , may have s i g n i f i c a n c e f o r f u t u r e s t u d e n t s o f s t r i k e a c t i v i t y . ' T y p i c a l l y , d a t a f o r n a t i o n a l a c c o u n t s s t a t i s t i c s , such as B . C . P e r s o n a l Income, a r e o b t a i n e d much more e a s i l y than a r e d a t a c o n c e r n i n g p r o f i t s . Our f i n d i n g s s u g g e s t t h a t f u t u r e r e s e a r c h e r s may be a b l e t o s u b s t i t u t e n a t i o n a l a c c o u n t s s t a t i s t i c s f o r p r o f i t v a r i a b l e s i n r e g r e s s i o n a n a l y s e s o f s t r i k e a c t i v i t y w i t h o u t s i g n i f i c a n t l y d i s -21 t o r t i n g t h e r e s u l t s t h e y o b t a i n . Gross B . C . P e r s o n a l Income (GPI) was used t o b a c k c a s t annual B . C . p r o f i t s (PROF) from 1959 t h r o u g h 1950 and t o b a c k c a s t each q u a r -t e r ' s B . C . p r o f i t s , ( P R 0 F r P R 0 F 2 , PROF^, and PR0F 4 ) from 1965 t h r o u g h 1950. The b a c k c a s t i n g was c o n d u c t e d w i t h a l i n e a r r e g r e s s i o n e q u a t i o n i n v o l v i n g a l o g a r i t h m i c r e g r e s s o r [LN(GPI)] and l o g a r i t h m i c r e g r e s s a n t s E a r l i e r s t u d e n t s o f Canadian s t r i k e a c t i v i t y , f o r e x a m p l e , used v a r i o u s i n d i c a t o r s o f f i r m s ' a b i l i t y t o pay a n d / o r t h e s t a g e reached i n t h e b u s i n e s s c y c l e . F o r i n s t a n c e , Vanderkamp (1972) used t h e c o n s t a n t d o l l a r v a l u e o f Gross N a t i o n a l P r o d u c t as a p r o p o r t i o n o f the t r e n d w h i l e Smith (1972) and Walsh (1975) r e s p e c t i v e l y em-p l o y e d t h e p r o f i t share o f GNP and t h e y e a r - t o - y e a r p e r c e n t a g e change i n t o t a l a f t e r - t a x c o r p o r a t e p r o f i t s . 9 136 [LN(PROF), LN(PROF^), L N ( P R 0 F 2 ) , LN(PROF 3 ) , and L N ( P R 0 F 4 ) ] . The e s t i m a t e d q u a r t e r l y p r o f i t d a t a were a d j u s t e d randomly t o sum t o t h e annual p r o f i t d a t a which c o v e r e d 1960-65 and which were e s t i m a t e d f o r 1950-59. The q u a r t e r l y p r o f i t d a t a then were s e a s o n a l l y a d j u s t e d , u s i n g the SAMAQ o p t i o n o f the Time S e r i e s P r o c e s s o r computer p a c k a g e . The unemployment r a t e (U) and t h e average age o f t h e n o n -a g r i c u l t u r a l employed work f o r c e o f B r i t i s h Columbia (A) a l s o were b a c k c a s t o v e r t h r e e y e a r s : 1950-52. F i r s t , 1953-75 monthly o b s e r -v a t i o n s o f U and A were s e a s o n a l l y a d j u s t e d , u s i n g t h e X-11 computer program t h a t i n s t i t u t i o n s l i k e t h e Bank o f Canada use t o s e a s o n a l l y a d j u s t monthly d a t a . There were u n a d j u s t e d o b s e r v a t i o n s o f U and A which were t a k e n d u r i n g one (sample) month o f each q u a r t e r from 1950 t h r o u g h 1952. The u n a d j u s t e d q u a r t e r l y sample month o b s e r v a -t i o n s o f U i n p a r t i c u l a r were q u i t e v o l a t i l e . N o n e t h e l e s s , t h e 1950-52 q u a r t e r l y sample month o b s e r v a t i o n s o f U and A were i n c l u d e d i n the r e g r e s s i o n s used t o b a c k c a s t U and A , i n o r d e r t o " t i e down" 23 t h e 1950-52 p o r t i o n o f t h e s e r e g r e s s i o n s . The b a c k c a s t i n g had t h e e f f e c t o f smoothing out t h e unemployment r a t e s e r i e s o v e r t h e 1950-52 time p e r i o d . The e s t i m a t e d p o r t i o n s o f t h e unemployment r a t e and p r o f i t s e r i e s , i n p a r t i c u l a r , may have d e f i c i e n c i e s . The unemployment r a t e s e r i e s , f o r e x a m p l e , was e s t i m a t e d o v e r a time p e r i o d , 1 9 5 0 - 5 2 , f o r which the r e c o r d e d o b s e r v a t i o n s were v e r y v o l a t i l e . The e s t i m a t e d o b s e r v a t i o n s removed m o s t , i f not a l l , the v o l a t i l i t y o f t h i s s e r i e s A was b a c k c a s t w i t h a t h i r d - d e g r e e p o l y n o m i a l r e g r e s s i o n , w h i l e U was b a c k c a s t w i t h a l i n e a r r e g r e s s i o n . (See Appendix C . ) 137 d u r i n g 1950-52. By c o n t r a s t , the q u a r t e r l y and annual p r o f i t s e r i e s were b a c k c a s t o v e r 11/26ths and 16/26ths o f t h e 1950-1975 t i m e p e r i o d . The margin f o r e r r o r c o u l d have been q u i t e l a r g e f o r b a c k c a s t i n g e i t h e r o r both o f t h e two s e r i e s . I f i t w e r e , i t m i g h t j e o p a r d i z e the u s e f u l n e s s o f t h o s e r e g r e s s i o n r e s u l t s which i n c l u d e t h e e s t i m a t e d data. . We s h a l l t e s t s t a t i s t i c a l l y t o d e t e r m i n e whether o r not r e g r e s -s i o n s o v e r d a t a t h a t i n c l u d e e s t i m a t e d o b s e r v a t i o n s y i e l d e s s e n t i a l l y t h e same r e s u l t s as r e g r e s s i o n s o v e r d a t a t h a t do not i n c l u d e e s t i -mated o b s e r v a t i o n s . R e g r e s s i o n s i n c l u d i n g e s t i m a t e d o b s e r v a t i o n s a r e p r e f e r a b l e t o r e g r e s s i o n s w i t h o u t e s t i m a t e d o b s e r v a t i o n s , i n o r d e r t o maximize degrees o f freedom f o r s t a t i s t i c a l t e s t s o f t h e l a b o u r l e g i s -l a t i o n - s t r i k e r e l a t i o n s h i p . 4 . 3 The Time P e r i o d t o b e . C o v e r e d i n t h e R e g r e s s i o n s G i v e n p o s s i b l e i n a d e q u a c i e s i n b a c k c a s t e d d a t a , t h e Chow t e s t was used t o d e t e r m i n e whether o r not b a c k c a s t e d d a t a s h o u l d be i n c l u d e d i n t h e r e g r e s s i o n a n a l y s i s o f t h i s s t u d y . Four d i f f e r e n t t i m e p e r i o d s were used i n t h e Chow t e s t : (1) 1 9 5 0 - 7 5 , which i n -c l u d e d a l l the b a c k c a s t e d d a t a and which was a p p l i e d t o both annual and q u a r t e r l y d a t a ; (2) 1 9 5 3 - 7 5 , w h i c h i n c l u d e d b a c k c a s t e d p r o f i t d a t a and which was a p p l i e d t o q u a r t e r l y and annual d a t a ; (3) 1 9 6 0 - 7 5 , which i n c l u d e d no b a c k c a s t e d d a t a and which was a p p l i e d t o annual d a t a ; and (4) 1 9 6 6 - 7 5 , which i n c l u d e d no b a c k c a s t e d d a t a and which was a p p l i e d t o q u a r t e r l y d a t a . Two s e t s o f r e g r e s s i o n s were r u n : r e s t r i c t e d r e g r e s s i o n s ( r ) and u n r e s t r i c t e d r e g r e s s i o n s ( u ) . The r e s t r i c t e d r e g r e s s i o n 138 e q u a t i o n s c o n s i s t e d o f e i t h e r e q u a t i o n (12) o r e q u a t i o n (13) and c o v e r e d t h e 1950-75 t i m e p e r i o d . Each u n r e s t r i c t e d r e g r e s s i o n e q u a -t i o n c o n s i s t e d o f a r e s t r i c t e d r e g r e s s i o n t o which a s e t o f a d d i -t i o n a l r e g r e s s o r s had been added. The a d d i t i o n a l r e g r e s s o r s c o r -responded t o one o f t h e t h r e e s u b - p e r i o d s o f 1950-75 ( 1 9 5 3 - 7 5 , 1960-75 o r 1 9 6 6 - 7 5 ) . They were c o n s t r u c t e d by m u l t i p l y i n g each r e -g r e s s o r from t h e c o r r e s p o n d i n g r e s t r i c t e d r e g r e s s i o n e q u a t i o n by a dummy v a r i a b l e whose v a l u e was one f o r y e a r s w i t h i n t h e g i v e n s u b -p e r i o d o f 1970-75 ( e . g . , 1960-75) but whose v a l u e was z e r o f o r y e a r s o u t s i d e the s u b - p e r i o d ( i . e . , 1 9 5 0 - 5 9 ) . Dummy v a r i a b l e c o n f i g u r a -t i o n s were not i n c l u d e d i n the r e s t r i c t e d e s t i m a t e s , i n o r d e r t o c o n -s e r v e degrees o f freedom ( p a r t i c u l a r l y i n r e g r e s s i o n s i n v o l v i n g a n -nual o b s e r v a t i o n s ) . An F - t e s t was used t o t e s t whether o r not t h e r e s t r i c t e d and u n r e s t r i c t e d e s t i m a t e s d i f f e r e d s t a t i s t i c a l l y . The f o r m u l a t h a t was used t o c a l c u l a t e the F - s t a t i s t i c was: VAr - K (T-K> F ( L , T - K ) = ~ y T 2 • _ R u - Rl . (T"K) . . . (14) where e a r e r e s i d u a l s from r e g r e s s i o n s , T i s t h e number o f o b s e r v a -t i o n s , K i s t h e number o f parameters f i t t e d i n t h e u n r e s t r i c t e d v e r -s i o n (u) and L i s t h e number o f r e s t r i c t i o n s i n the r e s t r i c t e d 139 v e r s i o n ( r ) . The F - s t a t i s t i c has L and (T-K) degrees o f f r e e d o m . The r e s u l t s t h a t were o b t a i n e d from a p p l y i n g t h e Chow t e s t t o the 1950-75 p e r i o d and the s u b - p e r i o d s , 1 9 5 3 - 7 5 , 1960-75 and 1966-7 5 , a r e p r e s e n t e d i n T a b l e 14. There were s i x c a s e s where t h e e s t -i m a t e s o f the u n r e s t r i c t e d r e g r e s s i o n s d i f f e r e d a t a s t a t i s t i c a l l y s i g n i f i c a n t l e v e l from t h e e s t i m a t e s o f the c o r r e s p o n d i n g r e s t r i c t e d r e g r e s s i o n s . The s i x c a s e s , denoted by t h e r e g r e s s a n t , were as f o l -l o w s : N S ^ C (1966-75 q u a r t e r l y ) , NS3 (1953-75 f o r both q u a r t e r l y and annual d a t a ) , and DUR^ (1953-75 q u a r t e r l y ) . Thus most o f t h e s e c a s e s i n v o l v e d s t r i k e s d u r i n g the term and q u a r t e r l y d a t a . I t i s i n f e r r e d , f o r e x a m p l e , t h a t t h e 1953-75 t i m e p e r i o d i s a p p r o p r i a t e f o r q u a r t e r l y r e g r e s s i o n s i n v o l v i n g NS^, NS^/F and DURg and f o r annual r e g r e s s i o n s i n v o l v i n g NS^. The l a t t e r case i s t h e o n l y case i n which an annual r e g r e s s i o n s h o u l d be c a r r i e d out o v e r a s u b - p e r i o d o f t h e 1950-75 time p e r i o d . T h i s case would not have been an e x c e p t i o n , had we d e c i d e d t o a c c e p t the a l t e r n a t i v e h y p o t h e s i s a t l e v e l s o f s i g n i f i c a n c e as low as f i v e p e r c e n t . (See T a b l e 1 4 . ) However, i t was d e c i d e d t h a t the t h r e s h o l d l e v e l f o r a c c e p t i n g t h e a l t e r n a t i v e h y p o t h e s i s would be t e n p e r c e n t f o r annual r e g r e s s i o n s , s i n c e the annual r e g r e s s i o n s i n v o l v e r e l a t i v e l y few degrees o f f r e e d o m — e s p e c i a l l y as compared w i t h t h e q u a r t e r l y r e -25 g r e s s i o n s . 24 S e e , f o r i n s t a n c e , J o h n s t o n , 1972b, 206-207 o r N e t e r and Wasserman, 1974, 2 6 2 - 2 6 4 . 2 5 S e e , f o r e x a m p l e , T a b l e 14. T A B L E 1 4 F - T e s t T h a t E s t i m a t e s U s i n g t h e Same R e g r e s s i o n E q u a t i o n b u t D i f f e r e n t Time P e r i o d s A r e S t a t i s t i c a l l y D i f f e r e n t R e g r e s s a n t s N S ^ C N S , DUR1 N S 2 / X N S 2 DUR2 NS3/F N S 3 DUR, A N N U A L 1 9 5 0 - 7 5 ( A n n u a l ) ( F ) . 3 1 5 ( 1 . 8 3 6 ) ' . 5 5 0 * * * ( 4 . 8 9 8 ) . 2 5 2 ( 1 . 3 8 5 ) . 8 1 0 * ( 1 7 . 0 3 7 ) . 8 5 4 * ( 2 3 . 4 3 2 ) . 2 6 2 ( 1 . 4 1 8 ) . 3 7 9 ( 7 . 0 2 7 ) * * . 3 3 6 * * ( 5 . 8 2 9 ) . 0 6 6 ( 0 . 8 0 6 ) V a r i a b l e s T h a t D i f f e r S t a t i s t i c a l l y From Z e r o - A * * + P * * 1 9 5 3 - 7 5 ( A n n u a l ) . 3 6 1 a . 5 7 9 . 2 9 3 . 8 4 7 . 8 7 5 . 3 6 9 . 5 2 6 . 5 4 1 . 2 3 9 F - S t a t i s t i c (OF) . 4 0 8 ( 3 , 1 7 . 3 9 0 ( 3 , 1 7 . 2 8 9 ( 3 , 1 7 1 . 3 7 0 ( 3 , 1 7 1 . 4 0 4 ( 3 , 1 7 . 9 6 1 ( 3 , 1 7 2 . 0 6 0 ( 3 , 2 0 2 . 9 8 t ( 3 , 2 0 1 . 5 2 ( 3 , 2 0 1 9 6 0 - 7 5 ( A n n u a l ) . 4 6 7 . 6 7 6 . 5 8 4 . 8 5 4 . 8 8 3 . 4 6 6 . c . c . c F - S t a t i s t i c (DF) * S t a t i s t i c a l l y d i f f e r e n t f r o m z e r o a t t h e .1% l e v e l o f s i g n i f i c a n c e * * S t a t i s t i c a l l y d i f f e r e n t f r o m z e r o a t t h e 1% l e v e l o f s i g n i f i c a n c e * * * S t a t i s t i c a l l y d i f f e r e n t f r o m z e r o a t t h e 5% l e v e l o f s i g n i f i c a n c e t S t a t i s t i c a l l y d i f f e r e n t f r o m z e r o a t t h e 10% l e v e l o f s i g n i f i c a n c e + . P o s i t i v e c o e f f i c i e n t . - N e g a t i v e c o e f f i c i e n t R|j R f o r t h e u n r e s t r i c t e d r e g r e s s i o n R* R 2 f o r t h e r e s t r i c t e d r e g r e s s i o n . 6 6 5 ( 6 , 1 4 ) . 9 0 7 ( 6 . 1 4 ) 1 . 8 3 4 ( 6 . 1 4 ) . 7 0 3 ( 6 , 1 4 ) . 6 0 0 ( 6 , 1 4 ) . 8 9 1 ( 6 , 1 4 ) Q U A R T E R L Y 1 9 5 0 - 7 5 ( Q u a r t e r l y ) ( F ) . 2 4 1 * ( 7 . 4 7 5 ) . 1 2 7 * * ( 3 . 4 4 2 ) . 2 8 7 * ( 9 . 5 1 9 ) . 5 7 8 * ( 3 5 . 0 7 3 ) . 0 8 7 ( 2 . 2 4 2 ) . 1 1 5 * ( 7 . 8 5 6 ) . 2 1 8 * ( 1 6 . 8 3 4 ) . 0 6 3 * * ( 4 . 0 9 7 ) V a r i a b l e s T h a t D i f f e r S t a t i s t i c a l l y From Z e r o + P * + P * + 1 * + P * + 1 * +Xt,* + 1 * - U * . 2 4 9 . 1 4 3 . 2 9 8 . 6 0 5 . 0 9 0 . 1 6 7 . 3 5 3 . 1 2 2 1 9 5 3 - 7 5 ( Q u a r t e r l y ) F - S t a t i s t i c (DF) .241 ( 5 , 1 1 3 ) . 4 2 2 ( 5 , 1 1 3 ) . 3 5 4 ( 5 , 1 1 3 ) 1 . 5 3 7 ( 5 , 1 1 3 ) . 0 7 5 ( 5 , 1 1 3 ) 2 . 4 5 5 * * * ( 3 , 1 1 8 ) 8 . 2 0 7 * ( 3 , 1 1 8 ) 2 . 6 4 3 * * ( 3 , 1 1 8 ) . 3 0 7 . 2 8 8 . 3 2 0 . 6 3 8 . 1 0 6 _ c _ c - C 1 9 6 6 - 7 5 ( Q u a r t e r l y ) F - S t a t i s t i c (DF) 2 . 1 5 2 T ( 5 , 1 1 3 ) 5 . 1 1 0 * ( 5 , 1 1 3 ) 1 . 1 1 0 ( 5 , 1 1 3 ) 2 . 5 0 0 * * ( 5 , 1 1 3 ) . 4 8 0 ( 5 , 1 1 3 ) I n t h e c a s e s w h e r e t h e d e g r e e s o f f r e e d o m , ( D F ) , w e r e ( 3 , 1 7 ) f o r a n n u a l r e g r e s s i o n s , t h e p o o l e d r e g r e s s i o n s i n w h i c h t h e r e w e r e more r e g r e s s o r s r e s u l t e d i n m a t r i c i e s t h a t were n o t p o s i t i v e - d e f i n i t e Q u a r t e r l y d a t a c o n c e r n i n g new c e r t i f i c a t e s w e r e n o t a v a i l a b l e " " P r o f i t d a t a , w h i c h w e r e b a c k c a s t f r o m 1959 t h r o u g h 1950 f o r a n n u a l d a t a and f r o m 1965 t h r o u g h 1950 f o r q u a r t e r l y d a t a , w e r e n o t , a r e g r e s s o r o f s t r i k e s d u r i n g t h e t e r m . C o n s e q u e n t l y , no u n r e s t r i c t e d r e g r e s s i o n s w e r e r u n f o r t h o s e t i m e p e r i o d s 141 There a r e s e v e r a l o t h e r key f e a t u r e s t o the r e g r e s s i o n r e -r e s u l t s p r e s e n t e d i n T a b l e 14. For i n s t a n c e , t h e r e s t r i c t e d r e g r e s -s i o n e q u a t i o n s g e n e r a l l y had y i e l d e d h i g h e r R s when t h e y were a p p l i e d t o a n n u a l , as opposed t o q u a r t e r l y d a t a . However, more q u a r t e r l y than annual r e s t r i c t e d r e g r e s s i o n s d i f f e r e d from z e r o a t a l e v e l o f s t a t i s t i c a l s i g n i f i c a n c e , presumably because t h e f o r m e r r e g r e s s i o n s i n v o l v e d many more degrees o f freedom than the l a t t e r o n e s . In a d d i -t i o n , n i n e r e s t r i c t e d r e g r e s s i o n l i n e s were s t a t i s t i c a l l y d i f f e r e n t from z e r o a t f i v e p e r c e n t o r h i g h e r l e v e l s o f s i g n i f i c a n c e . They i n -c l u d e d r e g r e s s i o n s h a v i n g the f o l l o w i n g r e g r e s s a n t s : HS^ (annual and q u a r t e r l y , DUR^  ( q u a r t e r l y ) , ^ / X (annual • and' q u a r t e r l y ) , NSg (annual and q u a r t e r l y ) , NS 3 /F (annual and q u a r t e r l y , and NS3 (annual and q u a r t e r l y ) . T h i s has economic s i g n i f i c a n c e , i n t h a t t h e economic " d e t e r m i n a n t s " i n (12) and (13) seem t o have e x p l a i n e d much o f t h e v a r i a t i o n i n s t r i k e a c t i v i t y , p a r t i c u l a r l y c o n t r a c t renewal s t r i k e s . The f a c t t h a t the r e s t r i c t e d r e g r e s s i o n l i n e s e x p l a i n r e -l a t i v e l y l i t t l e o f the v a r i a t i o n i n t h e d u r a t i o n , as opposed t o t h e number and i n c i d e n c e o f s t r i k e s i s c o n s i s t e n t w i t h t h e r e s u l t s t h a t o t h e r s t u d e n t s o f s t r i k e a c t i v i t y o b t a i n e d . ( S e e , f o r i n s t a n c e , W a l s h , 1975, 5 0 - 5 3 and e s p e c i a l l y S t e r n , 1978, 3 8 . ) P e r h a p s , the most c o n v i n c i n g argument t h a t t h i s s h o u l d be t h e case was put f o r w a r d by S t e r n ( 1 9 7 8 ) . He argued t h a t d u r a t i o n responded " p r i m a r i l y t o s p e c i f i c l o c a l c o n d i t i o n s ( i n d u s t r y , community, p l a n t , and i n t e r -p e r s o n a l ) , t y p e o f s t r i k e ( e . g . , w i l d c a t o r new c o n t r a c t ) , and s e c o n d a r i l y t o o r g a n i z a t i o n and economic c o n d i t i o n s (1978, 3 9 ) . " 142 T h i s s t u d y demonstrated t h a t d u r a t i o n c e r t a i n l y responded t o t y p e o f 26 s t r i k e . ( S e e , f o r e x a m p l e , T a b l e 2 a b o v e . ) One o f t h e l o c a l c o n -d i t i o n s t h a t S t e r n s u g g e s t e d was an i m p o r t a n t d e t e r m i n a n t o f t h e d u r a t i o n o f s t r i k e s was t h e p a s t h i s t o r y o f n e g o t i a t i o n s ( 1 9 7 5 , 4 1 ) . The b a r g a i n i n g t h e o r y o f C h a p t e r 2 i n c o r p o r a t e d t h e p a s t h i s t o r y o f n e g o t i a t i o n s but no r e g r e s s o r i n e i t h e r e q u a t i o n (12) o r e q u a t i o n (13) c a p t u r e s the p a s t h i s t o r y o f n e g o t i a t i o n s , l a r g e l y because i t i s so d i f f i c u l t t o q u a n t i f y . I n c i d e n t a l l y , t h e b a r g a i n i n g t h e o r y o f C h a p t e r 2 a l s o s u g g e s t e d c e r t a i n s e c o n d a r y economic c o n d i t i o n s which i n f l u e n c e t h e d u r a t i o n o f s t r i k e a c t i v i t y , such as t h e d a t e s on which u n i o n and f i r m d e f e n c e funds e x p i r e . Such d a t a were not i n c l u d e d i n 27 (12) and (13) because o f t h e h i g h c o s t s o f c o l l e c t i n g them. In a d d i t i o n , c e r t a i n economic v a r i a b l e s d i f f e r e d from z e r o a t t h e 10% o r l o w e r l e v e l s o f s t a t i s t i c a l s i g n i f i c a n c e i n t h e q u a r t e r l y and annual r e s t r i c t e d r e g r e s s i o n s p r e s e n t e d i n T a b l e 14. A l l o f them had t h e s i g n s t h a t e a r l i e r s t u d e n t s o f C a n a d i a n s t r i k e a c t i v i t y e x p e c t e d . In p a r t i c u l a r , t h e unemployment r a t e (U) and average age o f t h e n o n - a g r i c u l t u r a l work f o r c e (A) were i n v e r s e l y r e l a t e d t o s t r i k e m e a s u r e s . By c o n t r a s t , p r o f i t s (P) and t h e p e r c e n t a g e change i n consumer p r i c e i n d e x (X^) were p o s i t i v e l y r e l a t e d t o s t r i k e m e a s u r e s . 2 6 S e e a l s o pages 9 8 , 99 and 102 o f C h a p t e r 3 . ^ I n d e e d , one o f t h e key f e a t u r e s o f t h e b a r g a i n i n g t h e o r y p r e s e n t e d i n C h a p t e r 2 was t h a t c e r t a i n f a c t o r s w h i c h a r e n o t c a p t u r e d i n the economic " . d e t e r m i n a n t s " o f s t r i k e a c t i v i t y , govern t h e d u r a t i o n o f t h e s t r i k e . They i n c l u d e d the degree o f f i n a n c i a l s t r e s s t h a t l a -bour and management e x p e r i e n c e d u r i n g t h e s t r i k e , t h e d a t e s on w h i c h u n i o n a n d / o r f i r m d e f e n c e funds e x p i r e , and d i v e r g e n c e s i n b a r g a i n e r s ' p e r c e p t i o n s and e x p e c t a t i o n s as t o the l i k e l i h o o d o f a t t a i n i n g v a r i o u s p o s s i b l e outcomes t o n e g o t i a t i o n s . 143 P r i m a r i l y f o r f i n a n c i a l r e a s o n s , r e g r e s s i o n s i n v o l v i n g a n -nual d a t a w i l l be used t o conduct t h e r e g r e s s i o n a n a l y s i s o f the e f -f e c t s o f changes i n l a b o u r l e g i s l a t i o n on s t r i k e a c t i v i t y i n B r i t i s h Columbia which f o l l o w s . When d e c i s i o n - m a k e r s d e c i d e t o s t r i k e o r l o c k o u t , t h e y p r o b a b l y r e l y much more on annual d a t a r a t h e r than on q u a r t e r l y d a t a , p a r t i c u l a r l y f o r such i n d i c a t o r s as p r o f i t s and unem-p l o y m e n t . The advantage o f annual d a t a , as opposed t o q u a r t e r l y d a t a , i s t h a t annual d a t a embody t h e r e s u l t s o f market a c t i v i t y d u r i n g each o f t h e f o u r q u a r t e r s . As s u c h , t h e y presumably p r o v i d e d a more a c c u r a t e i n d i c a t i o n o f t h e g e n e r a l t r e n d i n economic a c t i v i t y than do q u a r t e r l y d a t a , even i f the q u a r t e r l y d a t a were s e a s o n a l l y a d j u s t e d (as was done i n the c u r r e n t s t u d y ) . F i n a l l y , s i n c e t h e q u a r t e r l y r e -g r e s s i o n s and t h e i r annual c o u n t e r p a r t s y i e l d e d s i m i l a r r e s u l t s (see T a b l e 1 4 ) , we s h a l l f o c u s below e x c l u s i v e l y on the r e s u l t s c o n c e r n i n g annual r e g r e s s i o n s . 4 . 4 1945-75 Changes i n B r i t i s h Columbia Labour L e g i s l a t i o n  and T h e i r Expected E f f e c t s on S t r i k e A c t i v i t y A g e n e r a l s h i f t took p l a c e i n B r i t i s h C o l u m b i a ' s d i s p u t e r e s o l u t i o n p o l i c y from 1945 t h r o u g h 1975. The l a b o u r s t a t u t e s o f B r i t i s h Columbia g e n e r a l l y p r o v i d e d c o m p u l s o r y , n o r m a t i v e and l e g a l i s -t i c forms o f d i s p u t e r e s o l u t i o n d u r i n g t h e f i r s t two decades o r so 28 o f the 1945-75 time p e r i o d . They a l s o s e t out p u n i t i v e measures 28 Changes i n B r i t i s h C o l u m b i a ' s Labour l e g i s l a t i o n a r e e x -p l a i n e d i n more d e t a i l i n Appendix B. They were a l s o e x p l a i n e d t o some e x t e n t i n C h a p t e r 3 . 144 f o r d e a l i n g w i t h u n l a w f u l a c t i v i t y — i n c l u d i n g s t r i k e s d u r i n g t h e term which t h e s e s t a t u t e s p r o s c r i b e d . Compulsory t w o - s t a g e c o n c i l i a t i o n p r o c e d u r e s were the mechanism t h a t t h e s e s t a t u t e s p r o v i d e d f o r r e s o l v i n g i n t e r e s t d i s p u t e s . They'were compulsory i n t h e sense t h a t t h e y ( a l o n g w i t h c e r t a i n o t h e r p r o c e d u r e s ) had t o be c o m p l i e d w i t h b e f o r e l a b o u r and management c o u l d l a w f u l l y s t r i k e o r l o c k o u t . The f i r s t s t a g e o f t h e s e c o n c i l i a t i o n p r o c e d u r e s c o n s i s t e d o f i n t e r v e n t i o n by a c o n c i l i a t i o n o f f i c e r . T h i s i n t e r v e n t i o n amounted t o m e d i a t i o n and was an accommodative form o f t h i r d p a r t y i n t e r v e n t i o n . I t was accommodative i n t h a t i t a c t e d t h r o u g h , r a t h e r than o u t s i d e the c o l l e c t i v e b a r g a i n i n g p r o c e s s . For e x a m p l e , one o f the c o n c i l i a t i o n o f f i c e r ' s main t o o l s was p e r s u a s i o n . The second s t a g e o f t h e s e c o n c i l i a t i o n p r o c e d u r e s c o n s i s t e d o f i n t e r -v e n t i o n by a c o n c i l i a t i o n b o a r d . The c o n c i l i a t i o n b o a r d ' s c o m p o s i -t i o n was t r i - p a r t i t e , i n v o l v i n g one l a b o u r r e p r e s e n t a t i v e , one 29 management r e p r e s e n t a t i v e and a n e u t r a l c h a i r m a n . I n t e r v e n t i o n by the c o n c i l i a t i o n board was n o r m a t i v e ( o r a d j u d i c a t i v e ) . I t o p e r a t e d o u t s i d e t h e c o l l e c t i v e b a r g a i n i n g p r o c e s s , f o r i t i n v o l v e d c o u r t -l i k e p r o c e e d i n g s and awards by t h i r d p a r t i e s . The awards were the c o n t r a c t s e t t l e m e n t s which the c o n c i l i a t i o n boards proposed (but which were not b i n d i n g ) . 3 ^ 29 U n t i l 1954 c o n c i l i a t i o n boards a u t o m a t i c a l l y were e s t a b -l i s h e d a f t e r a c o n c i l i a t i o n o f f i c e r had "booked o f f " a d i s p u t e . How-e v e r , t h e r e a f t e r they were e s t a b l i s h e d a t the d i s c r e t i o n o f t h e m i n i s t e r o f l a b o u r . ( S e e , f o r e x a m p l e , J a m i e s o n , 1973, 1 2 8 - 1 2 9 . ) S e e , f o r e x a m p l e , Woods, 1973, 157-159. 145 A d j u d i c a t i o n was t h e p r i m a r y method f o r d e a l i n g w i t h u n -l a w f u l a c t i v i t y , i n c l u d i n g w i l d c a t s t r i k e s . The c o u r t s o f B r i t i s h Columbia d e a l t w i t h u n l a w f u l s t r i k e s . The c o u r t s were empowered t o t a k e p u n i t i v e a c t i o n s , such as f i n i n g employees f o r engaging i n u n -l a w f u l s t r i k e a c t i v i t y , and t h e y o f t e n took such a c t i o n s . ( S e e , f o r e x a m p l e , C a r r u t h e r s , 1 9 6 0 . ) C o m p u l s o r y , a d j u d i c a t i v e , l e g a l i s t i c , and p u n i t i v e methods o f d i s p u t e r e s o l u t i o n were s u p p l a n t e d d u r i n g the l a s t decade o f 1945-75 by v o l u n t a r y , accommodative forms o f t h i r d p a r t y i n t e r v e n t i o n . For i n s t a n c e , v o l u n t a r y m e d i a t i o n was t h e mechanism f o r t h i r d p a r t y i n t e r v e n t i o n i n t o i n t e r e s t d i s p u t e s . I t was v o l u n t a r y i n t h a t e i t h e r l a b o u r o r management u n i l a t e r a l l y c o u l d r e q u e s t i n t e r v e n t i o n by a m e d i a t o r . In a d d i t i o n , r i g h t s d i s p u t e s , i n c l u d i n g t h o s e r i g h t s d i s -putes t h a t had d e v e l o p e d i n t o w i l d c a t s t r i k e s , c o u l d be r e s o l v e d t h r o u g h a v o l u n t a r y accommodative t e c h n i q u e . F o l l o w i n g u n i o n o r employer r e q u e s t , the Labour R e l a t i o n s Board o f B r i t i s h Columbia c o u l d d i s p a t c h i n d u s t r i a l r e l a t i o n s o f f i c e r s who i n t e r v e n e d as m e d i a t o r s , f o r e x a m p l e , t o u n c l o g g r i e v a n c e m a c h i n e r i e s t h a t had become c l o g g e d . The aims o f t h i s accommodative approach t o r i g h t s d i s p u t e s and w i l d c a t s t r i k e s i n c l u d e d opening up t h e c h a n n e l s o f communica-t i o n s between l a b o u r and management, a t t a c k i n g t h e c a u s e s o f g r i e v -ances and t h e r e b y a v o i d i n g t h e f e s t e r i n g o f g r i e v a n c e s , so t h a t fewer w i l d c a t s t r i k e s might o c c u r . By c o n t r a s t , proponents o f t h e accommo-d a t i v e approach t o l a b o u r r e l a t i o n s c l a i m e d , f o r e x a m p l e , t h a t an a d j u d i c a t i v e o r l i t i g i o u s approach t o l a b o u r r e l a t i o n s was d i r e c t e d 146 a t the symptom r a t h e r than the u n d e r l y i n g cause o f i n d u s t r i a l d i s -p u t e s — p a r t i c u l a r l y w i l d c a t s t r i k e s . ( S e e , f o r i n s t a n c e , W e i l e r , 1977, 6 6 - 7 1 . ) The accommodative approach t o l a b o u r r e l a t i o n s a l s o c a l l e d f o r governmental i n t e r v e n t i o n , a d j u d i c a t i o n and the i m p o s i t i o n o f p u n i t i v e r e m e d i e s , i n o r d e r t o p r o t e c t the p u b l i c i n t e r e s t . Such a c t i o n s were t r e a t e d and used as l a s t r e s o r t s . F o r i n s t a n c e , t h e Labour R e l a t i o n s Board o f B r i t i s h C o l u m b i a , t o whom the a u t h o r i t y t o d e t e r m i n e the l e g a l i t y o f s t r i k e s , l o c k o u t s and p i c k e t i n g was t r a n s -f e r r e d from t h e c o u r t s o f B r i t i s h C o l u m b i a , v e r y r a r e l y i n v o k e d p u n i t i v e remedies (see W e i l e r , 1977). The Labour R e l a t i o n s Board a l s o was empowered t o a r b i t r a t e n e g o t i a t i o n s f o r a f i r s t agreement, i f i t c o n s i d e r e d t h a t e i t h e r l a b o u r o r , more l i k e l y , management were g u i l t y o f not " b a r g a i n i n g i n 'good f a i t h . 1 " But i t a p p l i e d t h i s remedy i n -f r e q u e n t l y (see W e i l e r , 1976, 77) . The t h r e a t o f i n t e r v e n t i o n a d -j u d i c a t i o n and p u n i t i v e remedies was employed t o encourage l a b o u r and management t o use accommodative i n t e r v e n t i o n and t h e r e b y t o d e v e l o p 31 t h e a b i l i t y t o r e s o l v e t h e i r l a b o u r r e l a t i o n s problems by t h e m s e l v e s . C o m p u l s o r y , n o r m a t i v e , l e g a l i s t i c , o r p u n i t i v e forms a r e e x p e c t e d t o have an ambiguous e f f e c t on the l e v e l o f s t r i k e a c t i v i t y , czt. pan. Compulsion may promote s t r i k e a c t i v i t y , r a t h e r than impede i t . Elements t h a t w i l l c o n t r i b u t e t o the s u c c e s s o r f a i l u r e o f c o m p u l -s i o n i n c l u d e the t i m e l i n e s s o f i n t e r v e n t i o n , the s k i l l s p o s s e s s e d by the t h i r d p a r t i e s who i n t e r v e n e , and l a b o u r and management's commitment A l s o see C h a p t e r 3 above. 147 t o c o m p u l s i o n . I f , f o r e x a m p l e , l a b o u r and management a r e not com-m i t t e d t o c o m p u l s i o n , t h e y , i n e f f e c t , may postpone n e g o t i a t i o n s and s t r i k e a c t i o n u n t i l a f t e r they have c o m p l i e d w i t h the compulsory d i s -pute r e s o l u t i o n p r o c e d u r e s f o r i n t e r e s t d i s p u t e s . C o n t r a c t s e t t l e m e n t s proposed t h r o u g h n o r m a t i v e t h i r d p a r t y i n t e r v e n t i o n i n t o i n t e r e s t d i s -putes need not be a c c e p t a b l e t o l a b o u r and management. M o r e o v e r , t h e y e s t a b l i s h . o b j e c t i v e s which l a b o u r and mangement, whose i n t e r e s t s o f t e n c o n f l i c t , m i g h t s t r i v e t o improve upon. T h u s , they may provoke more impasses o r p r o l o n g i n d u s t r i a l d i s p u t e s l o n g e r than o t h e r w i s e . F i n a l l y , the t h r e a t o f l e g a l s o l u t i o n s o r p u n i t i v e r e m e d i a l a c t i o n presumably w i l l not d e t e r e i t h e r l a b o u r o r management from engaging i n u n l a w f u l a c t i v i t y , i n c l u d i n g u n l a w f u l s t r i k e s , i f e i t h e r o f them p e r -c e i v e s t h a t the b e n e f i t s o f u n l a w f u l s t r i k e a c t i v i t y outweigh t h e c o s t s 32 t h e r e o f . By c o n t r a s t , accommodative, v o l u n t a r y methods o f d i s p u t e r e -s o l u t i o n which a r e backed by the t h r e a t o f a d j u d i c a t i o n o r p u n i t i v e remedies as a l a s t r e s o r t a r e e x p e c t e d t o reduce t h e l e v e l o f s t r i k e a c t i v i t y , e v e r y t h i n g e l s e t h e same. T h i s e x p e c t a t i o n i s based p r i -m a r i l y upon the p r o b l e m - s o l v i n g p o s s i b i l i t i e s o f accommodative i n t e r -v e n t i o n . The Labour R e l a t i o n s Board o f B r i t i s h Columbia c l a i m e d , f o r e x a m p l e , t h a t i t had been r e l a t i v e l y s u c c e s s f u l i n r e s o l v i n g d i s p u t e s where i n d u s t r i a l r e l a t i o n s o f f i c e r s were d i s p a t c h e d as m e d i a t o r s , f o r 33 e x a m p l e , t o u n c l o g c l o g g e d g r i e v a n c e m a c h i n e r i e s . The r e s o l u t i o n 32 S e e , f o r e x a m p l e , J a m i e s o n , 1973, 125-142. 33 See Labour R e l a t i o n s Board o f B r i t i s h C o l u m b i a , Annual  R e p o r t s , 1975-76 o r C a r t e r , 1976, 6 - 7 . 148 o f t h e s e g r i e v a n c e s presumably r e s u l t e d i n fewer w i l d c a t s t r i k e s . More-o v e r , v o l u n t a r i s m , as compared w i t h , s a y , c o m p u l s i o n , might a l l o w f o r more t i m e l y t h i r d p a r t y a d j u d i c a t i o n — p r o v i d e d t h a t n e i t h e r l a b o u r nor management r e g a r d e d r e q u e s t i n g m e d i a t i o n as a s i g n o f weakness. F i n a l l y , the t h r e a t o f a d j u d i c a t i o n o r p u n i t i v e remedies s h o u l d encourage l a b o u r . and management t o r e l y upon t h e p r o b l e m - s o l v i n g f e a t u r e s o f accommo-d a t i o n , s i n c e the Labour R e l a t i o n s Board o f B r i t i s h C o l u m b i a , the 34 C a b i n e t and t h e M i n i s t e r o f Labour i n f r e q u e n t l y i n v o k e d such m e a s u r e s . D u r i n g 1945-75 b a s i c a l l y two l a b o u r s t a t u t e s embodied the accommodative approach t o l a b o u r r e l a t i o n s : t h e M e d i a t i o n S e r v i c e s A c t (1972) and the Labour Code o f B r i t i s h Columbia ( 1 9 7 3 ) . The M e d i a -t i o n S e r v i c e s A c t p r o v i d e d v o l u n t a r y m e d i a t i o n as t h e mechanism f o r r e s o l v i n g i n t e r e s t d i s p u t e s . The Labour Code e n s h r i n e d t h e accommoda-35 t i v e approach t o l a b o u r r e l a t i o n s . Those two s t a t u t e s , t h e r e f o r e , s h o u l d have a n e g a t i v e i n f l u e n c e on 1970-75 s t r i k e a c t i v i t y i n B r i t i s h C o l u m b i a . By c o n t r a s t , the r e m a i n d e r o f B r i t i s h C o l u m b i a ' s 1945-75 l a b o u r s t a t u t e s g e n e r a l l y s e t out c o m p u l s o r y , n o r m a t i v e , l e g a l i s t i c o r p u n i t i v e forms o f d i s p u t e r e s o l u t i o n . T h e y , c o n s e q u e n t l y , s h o u l d have an ambiguous e f f e c t on s t r i k e a c t i v i t y i n B r i t i s h Columbia from 1945 t h r o u g h 1975. Changes i n l a b o u r l e g i s l a t i o n were o r g a n i z e d i n t o c a t e g o r i e s , i n o r d e r t o s t u d y q u a l i t a t i v e d i f f e r e n c e s i n t h e i r impact on s t r i k e a c t i v i t y . The c r i t e r i o n t h a t was used t o d i s t i n g u i s h among t h e s e 34 See C h a p t e r 3 f o r a d i s c u s s i o n o f the use o f weapons from the " a r s e n a l o f weapons" as l a s t r e s o r t s . 3 5 S e e , f o r e x a m p l e , A r t h u r s ( 1 9 7 5 ) , W e i l e r ( 1 9 7 6 ) , M a t k i n ( 1 9 7 5 ) , and I n t e r n a t i o n a l Labor Law Committee, S e c t i o n o f Labor Re-l a t i o n s L a w s , American Bar A s s o c i a t i o n ( 1 9 7 7 ) . See a l s o Appendix B b e l o w . 149 c a t e g o r i e s was the e x t e n t t o which the s t a t u t o r y changes seemed t o a f f e c t t h o s e p o r t i o n s o f t h e g e n e r a l l a b o u r r e l a t i o n s laws which were deemed t o most i n f l u e n c e s t r i k e a c t i v i t y . The l a t t e r i n c l u d e d s e c t i o n s d e a l i n g w i t h (1) t h e n a t u r e and o p e r a t i o n o f the d i s p u t e r e s o l u t i o n m a c h i n e r i e s t h a t t h e s e a c t s s e t o u t , (2) t h e r e m e d i a l a c t i o n s t h a t c o u l d be t a k e n a g a i n s t u n l a w f u l a c t i v i t y , i n c l u d i n g w i l d c a t s t r i k e s , (3) the n a t u r e and scope o f p i c k e t i n g and l a w f u l s t r i k e and l o c k o u t a c t i v i t y , (4) t h e groups o f employees t o whom l e g a l l y s a n c t i o n e d c o l l e c t i v e b a r g a i n i n g was a v a i l a b l e , and (5) the p r o c e s s whereby u n i o n s and e m p l o y e r s ' a s s o c i a t i o n s a c q u i r e e x c l u s i v e b a r g a i n i n g r i g h t s ( i . e . , the c e r t i f i c a t i o n and a c c r e d i t a t i o n p r o -c e s s e s , r e s p e c t i v e l y ) . These f a c t o r s i n f l u e n c e t h e r a t e o f r e a c h i n g impasse as f o l l o w s : f a c t o r s (1) and ( 2 ) , as e x p l a i n e d a b o v e ; f a c t o r (3) t h r o u g h t h e u n i o n and f i r m ' s " b a r g a i n i n g p o w e r , " as d i s c u s s e d by C h a m b e r l a i n ( 1 9 5 1 ) , f o r example; and f a c t o r s (4) and (5) t h r o u g h t h e scope and s t r u c t u r e o f b a r g a i n i n g . Four c a t e g o r i e s were i d e n t i f i e d : " a l l changes" ( A C ) , " n e a r l y a l l changes" (NAC), " i m p o r t a n t changes" ( I C ) , and " f e w e s t i m p o r t a n t changes" ( F I C ) . AC s h o u l d have t h e l e a s t s t a t i s t i c a l l y s i g -n i f i c a n t impact on s t r i k e a c t i v i t y , ceX. pan.., s i n c e i t i n c l u d e s a l l s t a t u t o r y c h a n g e s . NAC s h o u l d have s l i g h t l y more o f a s t a t i s t i c a l l y s i g n i f i c a n t impact than AC on s t r i k e a c t i v i t y , s i n c e v e r y minor changes which were i n c l u d e d i n AC were d e l e t e d from NAC. In t u r n , NAC, which i n c l u d e s t h o s e s t a t u t o r y changes t h a t c o u l d have an i m -p o r t a n t s t a t i s t i c a l i n f l u e n c e on s t r i k e a c t i v i t y , s h o u l d e x e r t a 150 l e s s e r i n f l u e n c e on s t r i k e a c t i v i t y than. I C , which i n c l u d e s a l l changes which were c o n s i d e r e d t o e x e r t an i m p o r t a n t i n f l u e n c e on s t r i k e a c -t i v i t y . M a r g i n a l l y i m p o r t a n t s t a t u t e s were d e l e t e d from IC t o form F I C , which s h o u l d i n f l u e n c e s t r i k e a c t i v i t y the most i n a s t a t i s t i c a l l y s i g n i f i c a n t s e n s e . 4 . 5 Hypotheses t o be T e s t e d and Dummy  V a r i a b l e C o n f i g u r a t i o n s Two a l t e r n a t i v e h y p o t h e s e s , H^ and H ^ , w i l l be t e s t e d . H | h o l d s t h a t changes i n the l e v e l o f s t r i k e a c t i v i t y accompany each change i n l a b o u r l e g i s l a t i o n . w i l l be s a i d t o t e s t f o r " s t r u c t u r a l s h i f t s . " H 2 h o l d s t h a t b r i e f ( o n e - y e a r o r t w o - y e a r ) changes i n t h e l e v e l o f s t r i k e a c t i v i t y accompany each change i n l a b o u r l e g i s l a t i o n , but t h a t t h e r e a f t e r t h e r e i s a r e t u r n t o t h e p r e v i o u s l e v e l o f s t r i k e a c t i v i t y . w i l l a l s o be r e f e r r e d t o as the " l e a r n i n g t o p l a y t h e o l d game a c c o r d i n g t o the new r u l e s " h y p o t h e s i s . The n u l l h y p o t h e s i s , H Q , i s t h a t changes i n l a b o u r l e g i s l a t i o n have no e f f e c t on t h e l e v e l o f s t r i k e a c t i v i t y . S t r u c t u r a l dummy v a r i a b l e c o n f i g u r a t i o n s were c o n s t r u c t e d f o r a l l f o u r c a t e g o r i e s o f changes i n l a b o u r l e g i s l a t i o n - - A C , NAC, I C , and F I C . They w i l l be denoted r e s p e c t i v e l y as " a l l dummies" ( A D ) , " n e a r l y a l l dummies" (NAD), " i m p o r t a n t dummies" (ID) and " f e w e s t i m p o r t a n t dummies" ( F I D ) . I t was assumed t h a t o n l y the most s i g n i f i -c a n t changes i n l a b o u r l e g i s l a t i o n would e x e r t b r i e f e f f e c t s on s t r i k e a c t i v i t y . The l a t t e r w i l l be denoted as " l e a r n i n g t h e new r u l e s i n one y e a r " (LNR1) and "1 e a r n i n g " t h e new r u l e s i n two y e a r s (LNR2). 151 The dummy v a r i a b l e s c h e m e s - - A D , NAD, I D , F I D , LNR1, and L N R 2 - - a r e d e p i c t e d i n T a b l e s 1 5 , 16 and 17 b e l o w . They d i f f e r a c c o r d -i n g t o t y p e o f s t r i k e : f i r s t agreement s t r i k e , c o n t r a c t renewal s t r i k e , o r s t r i k e d u r i n g the t e r m . Each dummy v a r i a b l e i n the schemes was t u r n e d " o n " ( i . e . , took on a v a l u e o f one) d u r i n g t h e y e a r i n which t h e c o r r e s p o n d i n g s t a t u t e came i n t o f o r c e , u n l e s s t h a t s t a t u t e was i n f o r c e d u r i n g l e s s than o n e - h a l f o f t h a t y e a r . O t h e r -w i s e , the dummy v a r i a b l e was t u r n e d "on" d u r i n g the f o l l o w i n g y e a r . Each dummy v a r i a b l e i n the s t r u c t u r a l c o n f i g u r a t i o n s (AD, NAD, I D , FID) remained " o n " d u r i n g s u c c e s s i v e y e a r s u n t i l the next s t a t u t e o f the g i v e n c o n f i g u r a t i o n was i n f o r c e f o r o v e r h a l f a y e a r . By c o n t r a s t , each dummy v a r i a b l e i n the c o n f i g u r a t i o n , LRN1 (LNR2) was " o n " d u r i n g the f i r s t y e a r (and the n e x t y e a r ) t h a t the c o r r e s p o n d i n g s t a t u t e was i n f o r c e f o r o v e r h a l f a y e a r . A l l dummy v a r i a b l e s were "