The future of Employment Relations in the United States: The ‘Low’ or the ‘High’ Road?

Hello and welcome to my first international employment relations blog entry for the semester. As it happens, I am also conducting this upcoming week’s tutorial presentation for this topic so I thought I would take the opportunity to provide you all with some additional information regarding the topic of modern employment relations in the United States with particular reference to the diametrically opposed approaches to work, labour relations and business of two extremely large American multinational retail companies.

In considering the future of employment relations in the United States, and subsequently Australia’s ER outlook, Goodwin and Machonachie’s 2006 article entitled, ‘Wal-Mart or Costco: Australia’s 21^st century choice?’ introduces an extremely interesting concept in ‘Institutional Isomorphism’. This idea is defined as a ‘constraining process that forces one unit in a population to resemble other units that face the same set of environmental conditions’ (DiMaggio and Powell 1983) and essentially involves organisations duplicating the structures, strategies and practices of other similar organisations.

Essentially this concept of Institutional Isomorphism means that new business within the United States must replicate other successful organisations in order to be profitable and this in where the idea of the 'low' and 'high' road approaches to employment relations become relevant. The 'low' road is an approach exemplified by extremely successful American retail company Wal-Mart which involves extremely low wages, a strong anti-union stance and poor working conditions. Meanwhile, one of its major competitors in Costco exemplifies the 'high' road approach which involves a belief that employees deserve a fair share of the profit that they help generate, a supportive view of union involvement, high working conditions and even a strong health care system.

(‘The high and low road’s exemplified at Costco and Wal-Mart respectively can be thought of as good and evil for American retail workers)

In researching this area of international employment relations, it became extremely apparent to me that more and more US organisations looked likely to follow the ‘low’ road in a process called ‘Wal-Martisation’ whereby labour costs need to be minimised in order to assist shareholders’ needs. However, I personally believe that this is an extremely negative path for employment relations to be taking as it gives the already dominant employer even more power in the employment relationship.

References-

• ·         Bamber, GJ, Lansbury, RD & Wailes, N (2011) (eds), International and comparative employment relations: globalisation and change, Allen & Unwin, Sydney. Chapter 3.
•    Dimagio, P & Powell, W (1983), ‘The iron cage revisited: Institutional isomorphism and collective rationality in organizational fields’, American Sociological Review, 48, pp. 147-60.
•   Goodwin, M & Maconachie, G (2006), ‘Wal-Mart or Costco: Australia’s 21st century choice?’ 21st Century Work: High Road or Low Road: proceedings of the 20th conference of the Association of Industrial Relations Academics of Australia and New Zealand, vol. 1. Refereed papers.