Critical Reflection

HR & IR SystemsWilliam Kwok Enoch Ng Ainsley Hart Martina NikicAxel Durand-Smet Mahmoud Abu Hannoud

Table of Contents

• Introduction• Discussion on the assigned article• Common theme of the assigned articles• Discussion on the additional articles• Shared theme and scope• Centralized Wage Bargaining• Government Intervention / Partisanship

• Conclusion & Factbook Application

Introduction

• Questions to think about:• 1. What are the factors that you think contribute to the

income equality/inequality of the countries?• The levels of wage inequality and its determinants is a

fundamental component of HRM• Importance of understanding the research structures,

sampling, and measurement methodologies

Assigned Articles

• Article 1: Comparative Research in Human Resource Management: A Review and an Example by Brewster, C., Tregaskis O., Hegewisch, A. & Mayne L. (1996)

• Article 2:Wage-Setting Institutions and Pay Inequality in Advanced Industrial Societies by Michael Wallerstein (1999)

Common Theme of Articles

• Article 1 • Provides a deep understanding of the importance of the

research structures, sampling, and measurement methodologies

• Serves as the backbone and provides a comprehensive standard

• Article 2• Depicts the wage-setting determinants• Gives us ideas of the dimensions and variables to focus on

Additional Articles

• Article 3:Economic Globalization, Domestic Politics, and Income Inequality in the Developed Countries: A Cross-National Study by Vincent Mahler (2004)

• Explains the impact of four 'domestic political' and three 'economic globalization' factors towards income inequality√

• Extracted data from the Luxemburg Income Study√• Concludes that political factors are more significant

determinantså Limitation: Lack of comprehensive explanations on how each

factor affect income inequalityX

Additional Articles

• Article 4:Institutions, Partisanship, and Inequality in the LongRun by Scheve and Stasavage (2009)

• The political effect on income inequality is minimal, especially in the long run√

• The decrease of income inequality had presented before collective bargaining was introduced √

• This article provides a more precise and accurate test on the proposed factors √

Additional Articles

• Article 5Has the national minimum wage reduced UK wage inequality? by Dickens and Manning (2004)

• Supports the previous article that government partisanships and collective centralization are not the major determinants of income inequality√

• The effect of the national minimum wage established in the UK towards income inequality is minimal√

• Demonstrates an empirical example from a developed country, which may provide support to the previous article to some extent√

• Research was done in only one countryX

Additional Articles

• Article 6Diverging Developments in Wage Inequality: Which Institutions Matter? by Rebecca Oliver (2008)

• that the major determinant of wage inequality is whether the wage-bargaining practices in a country include the use of wage scale√

• Concludes that the increase in the inequality of wage is less likely to occur√

• Wage scale provides an insightful perspective to look at the factors that lead to wage inequality√

Shared Theme and Scope

1. Data analyzed & methodologies in regards to the determinants of wage inequality

2. Two Major Determinants of Wage Inequality• Centralized Bargaining• Government intervention

• Mahler’s three reasons:• More efficient• Improve political

position of workers• Contributes to

distributive justice

• Wallerstein’s explanations:• Economical• Political• Ideological

Centralized Wage Bargaining

• Positive relationship between centralization and egalitarian distribution of wage

• Mahler and Wallerstein’s explanations corresponding

Centralized Wage Bargaining

• Scheve DISAGREED with the previous findings!

• His study shows no evidence of a positive relationship between centralized bargainingand income equality

• Wage inequality is instead affected by another underlying economic force

• There is NOT a casual correlation

Government Intervention /Partisanship

• Spectrum of government intervention (degree)• Left governments assumptions• Empirical results• Causal relationship?• Example: National Minimum Wage• Minimal effect on entire labor sector

Conclusion

• Limitations: appropriateness and compatibility of methodologies (Article 1)

• Centralized bargaining: a controversial matterWhat is the appropriate method of research?

Factbook Application

• Difference in level of wage bargaining between countries

• Degree of government intervention in wage setting of countries

• Poland (conservative liberalism ) vs Switzerland (democratic)

THANK YOU