Is There Hope for Social Solidarity and Income Equality in Liberal Market Economies? an Analysis of Labour Market Divergence in Ireland, the UK, Australia and New Zealand.

Within the comparative industrial relations literature, recent analysis has focused on the trend towards greater liberalisation and an apparent convergence on an Anglo-American model of industrial relations with increasing decentralisation of bargaining and only a state-mandated safety net ensuring workers have a basic standard of protection at work (e.g. Baccaro & Howell, 2011; Colvin & Darbishire, 2013). In contrast to the proponents of the liberal convergence thesis, we argue that significant institutional and regulatory differences exist, and that these differences have tangible impacts on social solidarity and income equality.

Our analysis focuses on the industrial relations systems of four liberal market economies (LMEs). In particular, we contrast the situation in Australia and Ireland with that of New Zealand and the UK over the past 15 or so years. In Australia the award system of industry and occupational-specific safety nets have been strengthened, while in Ireland the residual effects of 20 years of social partnership are evident with a (pending) re-instigation of the Joint Labour Committees for collective bargaining in low-paid sectors and an Irish form of the ‘right to collective bargaining’, as well as recent signals about a return to some (albeit limited) form of centralised wage bargaining. In contrast, indelible marks have been left on the labour market following the radical deregulation of the Employment Contracts Act 1991 in New Zealand and the destruction of collective institutions in the 1980s and 1990s in the United Kingdom. Bargaining remains highly decentralised and individualised despite prolonged periods of Labour-led government in both countries during the period since.

In explaining these differences, our analysis differs from much of the comparative IR literature that has focused on institutions. Instead we utilise comparative politics and political economy theories to argue that ideology, legitimation and political will, and the interaction between them, play a more significant role than has hitherto been acknowledge in the industrial relations literature. This approach does not deny the influence of institutions but emphasises the role of agency. In doing so, it rejects the deterministic and depressing picture inherent in some accounts of contemporary developments in LMEs and offers hope for protecting workers’ interests and their employment rights going forward. The case analysis draws on previous empirical research the authors have conducted in the four countries, including over 100 interviews with government representatives, employers’ associations and trade unions, as well as secondary sources.