The System of Industrial Relations in New Zealand. by A. J. GeareReview by: John E. DrotningIndustrial and Labor Relations Review, Vol. 44, No. 2 (Jan., 1991), pp. 368-369Published by: Cornell University, School of Industrial & Labor RelationsStable URL: http://www.jstor.org/stable/2524816 .

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368 INDUSTRIAL AND LABOR RELATIONS REVIEW

enhances job stability in this sector. Public sector unions appear to have few effects on the total expenditures (budgets) of municipal gov- ernments, however, even though they do raise the expenditures of unionized agencies and departments. It is not clear to me how public sector unions can enhance employment stabil- ity in government and yet not enlarge govern- mental budgets, and this apparent conundrum is not addressed by the editors.

Two of the final four papers in this collection focus on public schools. One of them shows that increases in state aid to local school districts result in reduced taxes rather than in pay or employment increases. This finding helps us understand why some teacher unions have recently sought legislation earmarking state aid for teacher salaries. The second paper ventures into particularly murky water, namely, school performance, and finds that teacher unionism is positively associated with student test scores. Neither the authors' analy- ses nor the editors' comments, however, help the reader understand what other factors-for example, management practices, school capital and classroom facilities, and parental control- contribute to student test score differentials. Few researchers and fewer practitioners are likely to accept the implication of the limited empirical finding that stems from this paper, namely, that teacher unionization enhances student performance.

Potential readers also deserve a word or two about what this volume does not contain. Perhaps the most notable omission is a paper dealing with a theory of public sector unioniza- tion. In an era in which the public sector has been virtually the only arena of union expan- sion in the United States, it is striking that so few attempts have been made to explain this phenomenon theoretically. This book provides some of the best empirical work yet done on the effects of public sector unions and the effects of bargaining laws on public sector unionization, but it does not fundamentally address the question of why U.S. public sector workers have organized so substantially in the past quarter-century.

Also, of note, and as occasionally noted by the editors, other institutional forces besides unionism can affect terms and conditions of employment in government. Chief among these institutions is the civil service system, which is pervasive in federal, state, and local governments. None of the papers represented in this collection attempts to separate the effects of civil service from the effects of unionism on public sector wages, employment, layoffs, quits, budgets, and other outcomes.

Hence, the empirical results of these papers- which otherwise have much to commend them-reflect a dominant research approach that sacrifices breadth for depth.

Still, no student of public sector labor relations can afford to ignore this volume. Its positive attributes are many and notable, and it has stimulated me to rethink several important analytical dimensions of public sector labor relations. One could hardly ask more of any volume, let alone a collection of conference papers.

David Lewin Professor of Business Columbia University

The System of Industrial Relations in New Zealand, 2nd ed. By A. J. Geare. Welling- ton, New Zealand: Butterworths, 1988. xiii, 496 pp. $77.00.

A. J. Geare covers a wide range of topics in this book, providing, for example, an introduc- tion to the New Zealand system of industrial relations, the parties in the labor relations process, and the country's rules and legislation, along with comments on conflict, strikes, wages, and grievance activity in New Zealand's private and public sectors.

A major section focuses on rule-making and interpretation, beginning with the Indus- trial Conciliation and Arbitration Act of 1894. Geare discusses the Industrial Relations Act (1973), the Labor Relations Act (1987), and the State Sector Act (1988), which applied the provisions of the 1987 Act to New Zealand's public employees. The 1987 Act is important because it combined the formerly separate Conciliation and Mediation Services and, as a result, blurred the difference between the roles of mediators and conciliators.

The expansive scope of Geare's book is both its shortcoming and its strength. In about 500 pages, Geare comments on 35 distinct statutes and 100 labor cases. The result is sometimes a bit tedious. But on the other hand, the book constitutes an extremely comprehensive view of New Zealand's labor relations. If one wants to understand industrial conflict and concomi- tant legislation in a country in which unions have organized almost 65% of private and

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BOOK REVIEWS 369

public employees, one need look no further than A. J. Geare's book.

John E. Drotning Professor of Industrial Relations Weatherhead School of Management Case Western Reserve University

Labor and Employment Law

Strikers and Subsidies: The Influence of Government Transfer Programs on Strike Activity. By Robert Hutchens, David Lip- sky, and Robert Stern. Kalamazoo, Mich.: W.E. Upjohn Institute, 1989. 210 pp. $21.95 cloth, $12.95 paper.

Strikers and Subsidies is a thoroughly re- searched, well-written, and highly informative work, particularly in its examination of the various ways in which workers involved in labor disputes may qualify for government transfer payments. Its statistical findings on the influence of government transfer programs on strike activity and derivative policy recommen- dations fill a long-standing void that the authors indicate has long troubled courts ruling on challenges to worker eligibility for payments under such programs, although those results and recommendations may be too late to have a fundamental impact on estab- lished state and federal policy.

The first chapter of the book serves as both an introduction to and executive summary of the work. It begins with a summary of the rhetoric surrounding the issue of state subsi- dies for strikers. It then introduces the reader to such eligibility rules as "stoppage of work," lockout, and "innocent bystander" provisions through which "a majority of other [than New York and Rhode Island] states allow workers unemployed because of a labor dispute to collect unemployment benefits under certain conditions" (p. 5). Finally, the chapter provides a tantalizing taste of the authors' findings that "there is a link between the unemployment insurance system and strike activity" but not between welfare programs and strike activity (p. 12) and their opinion that "the present system is seriously flawed" (p. 12).

Chapters 2 and 3 provide a detailed descrip- tion of the ways in which workers involved in labor disputes may qualify for unemployment compensation, including "interim employ- ment" provisions not cited in Chapter 1. The

authors' flow charts on pp. 60-61 are particu- larly helpful. One thing that is missing, however, is a state-by-state chart of eligibility possibilities-data the authors had to have for their statistical analysis of subsidies and strikes. The chapters also provide an outline of the legislative and judicial history of striker eligibil- ity for unemployment benefits. Chapter 4 does much the same for welfare benefits such as AFDC-U, food stamps, and general assistance.

In Chapter 5, the authors discuss various theories of strike activity before settling on that of Reder and Neumann as most appropriate for their purposes. In the words of the authors, that theory predicts that "the frequency and duration of strikes is a decreasing function of the combined [union plus management] cost of strikes" (p. 138). Based on that theory, the authors predict that, ceteris paribus, states with more liberal eligibility requirements for unem- ployment benefits and welfare will have more and longer strikes-hypotheses that are tested in Chapter 6 on data for 1960-74.

In Chapter 6 the authors find the predicted positive relationship between unemployment benefit eligibility rules and strike frequency but not duration. The latter unexpected finding the authors attribute to deficiencies in data on average duration of strikes, which in turn are related to a lack of data on the number of bargaining units and strike exposures by state and year-which ultimately brings one back to the authors' admitted problem of the lack of congruence between the structure of subsidy eligibility and the structure of collective bar- gaining. Those problems, plus the lack of a well-articulated rationale for the 27 control variables, are disquieting but do not discredit the authors' findings.

The final chapter presents the authors' answer to the question, "What is the proper policy?" It is the only chapter that seems over-written and over-rationalized, leaving the reader with the impression that the authors struggled long and hard to reach consensus. That consensus is that strikers should be eligible for welfare on the basis of need and for unemployment benefits after a protracted waiting period (except for innocent bystand- ers), as is current policy in New York and Rhode Island. The issues left open for further rhetoric and debate are the length of the waiting period for eligibility and how to implement the authors' recommendation that strike-related benefits should be financed

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