Labor Law and Industrial Peace: A Comparative Analysis of the United States, the United Kingdom, Germany, and Japan Under the Bargaining Model

Abstract

In this Article, Professor Dau-Schmidt provides a comparative analysis of the labor laws of the United States, the United Kingdom, Germany, and Japan for the purpose of identifying which characteristics of a country’s labor laws are likely to reduce strike incidence and intensity and promote industrial peace. To identify which characteristics of a country’s law are likely to encourage industrial peace, Professor Dau-Schmidt presents game theory arguments based on his analysis of unions and collective bargaining. Dau-Schmidt then provides a simple empirical test as to the relative success of different countries’ laws in advancing industrial peace by comparing data on the number of days lost per thousand organized workers for each of the examined countries.

Dau-Schmidt finds that countries, such as Germany and Japan, that encourage the sharing of information between employers and employees and effectively prohibit certain strategic behaviors by the parties, enjoy the most success in promoting industrial peace. In contrast, the United Kingdom, which has historically left collective bargaining unregulated even to the point of not enforcing voluntary agreements to arbitrate, suffers by far the worst record of encouraging industrial peace. Somewhere in between these two extremes lies the United States with requirements for limited exchanges of information and less effective prohibitions on strategic behavior, and intermediate success in encouraging industrial peace.