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Citation Information

Type Journal Article - The American Economic Review
Title Compulsory centralization of collective bargaining in South Africa
Volume 86
Issue 2
Publication (Day/Month/Year) 1996
Page numbers 326-329
Since the 1920's the chief locus in South Africa for bargaining over wages and working conditions in much of the non primary private sector (i.e., excluding agriculture and mining) occurred in the context of the industrial councils. An industrial council (IC) is formed on a voluntary basis by representative firms and unions in an industry. The IC's possess "ergoomnes" ' rules which enable the Minister of Labor to extend the council rulings on wages and working conditions to all employers in the industry, irrespective of whether they participated in the negotiations. Some believe that such compulsory centralization is a condition of industrial peace, while others believe that it encourages inefficiency and creates unemployment. This paper develops a simple model of ergo omnes and summarizes some statistical evidence in its support; this research program is still under way.

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