Working Paper nº 19
The Europeanization of Portuguese Interest Groups? Trade Unions and Employers' Associations
30 | 11 | 2006
Sebastián Royo, Director Suffolk University Madrid Campus; Associate Professor of Government, Suffolk University-Boston; and affiliate and co-chair of the Iberian Study Group at the Minda de Gunzburg Center for European Studies, Harvard University
INTRODUCTION
The process of European integration has exerted significant influence in the industrial relationsrealm, not only through the implementation of the acquis communautaireand European regulation on social affairs, but more importantly by fosteringthe opening of the Portuguese economy to increasing competition, which has ledto privatizations, downsizing and internal restructuring of economic sectors,and the liberalization of the economy. These developments have generatedpressures and have had enormous influence in the social actors contributing tothe emergence of a new pattern of industrial relations. Yet, the legacies ofauthoritarianism and the experience of the revolutionary period have hinderedefforts to institutionalize a modern and stable industrial relations settingbased on trust and cooperation. This paper will look at the transformation ofthe Portuguese trade unions and employers’ associations and outline the mainfeatures of the Portuguese industrial relations framework.
HISTORICAL BACKGROUND
In Portugal a militarycoup installed a new authoritarian regime in 1926. In the 1930s theestablishment of an authoritarian corporatist regime (the Estado Novo,or new state) by the new dictator, António Salazar (1932<spanlang=EN-US style='line-height:150%;font-family:Symbol'>-<spanlang=EN-US style='line-height:150%;font-family:Georgia'>68), and the approvalof a new constitution in 1933, led to the replacement of all independentpolitical parties by the União Nacional (National Union, UN), and thebanning of all independent unions in favor of new corporatist bodies. Thisregime lasted for over forty years.
The long legacy of intervention by an authoritarian corporatist regime has left a strong imprinton the configuration of the Portuguese labor market and its trade unionstructure. The regime was also characterized by direct state intervention inthe economy and authoritarian regulation of labor relations through corporatistinstitutions. The state was in charge of licensing new firms, external tariffs,foreign investment, finance, planning, and control over prices, wages, andrents (Barreto 1992, 452). A modified version of the Italian National LaborStatute (the Estatuto de Trabalho National) was introduced. It wouldregulate labor relations and interest group representation for the next fortyyears. The authoritarian government sought to supersede the class struggle. Inthe industrial relations' realm, the regime created a corporatist system ofindustrial relations based on sindicatos nacionais (national tradeunions) and grémios (employers' guilds), which had a legal monopoly ofrepresentation and were controlled directly by the government. While unionmembership was voluntary, nonmembers were forced to pay dues and the governmentpromoted collective bargaining very early, although it was a state-directedprocess, and since it was voluntary, it happened very rarely at company level.Until the 1960s wages and most labor regulations were established directly bythe government. The law admitted only individual grievances. Strikes wereillegal and repressed.
The long heritage of authoritarian corporatism led to a state-dominated industrial relations'setting. During the last period of the regime, the new leader, Marcelo Caetano,tried to foster more union autonomy and strengthen collective bargaining<spanlang=EN-US style='line-height:150%;font-family:Symbol'>¾<spanlang=EN-US style='line-height:150%;font-family:Georgia'>which became legallycompulsory¾<spanlang=EN-US style='line-height:150%;font-family:Georgia'>to improveproductivity, management, and increase wages. These reforms introduced limitedautonomy and fostered collective bargaining. Strikes remained illegal, but thegovernment developed state-sponsored conciliation and arbitration procedures toaddress industrial disputes. The organization of free elections in unionorganizations resulted in the penetration of these organizations by peopleopposed to the regime, particularly Communists. They mobilized workers againstthe regime, which led to repression in the regime's final years, and a dramaticradicalization of class relations in the transition period. These activitiesresulted in a renewed membership drive, fostered by the new status andrespectability of these organizations.
The fall of the regime in 1974 resulted in the dismantling of the corporatist system. In 1974 militaryofficers concerned about the future of the country and disaffected by thecolonial wars staged a coup that ended the authoritarian regime. This triggereda democratic transition process that had enormous consequences for Portugal'slabor market and economic institutions. The transition to democracy, however,was not smooth. Democratization was threatened in 1974-75 by a Communist revolutionarymovement, which was directed toward the construction of a Socialist society,and took the country to the brink of conflict. The social and political climateduring the revolution was radically anticapitalist. The Communist Party gainedcontrol of the Ministry of Labor and another government post. This resulted ina shift in the balance of power in favor of the workers who exerted pressure,including intimidation and violence, and led to a spectacular increase in payand social security benefits.
This revolutionary period, although short, left an enduring legacy in the country. As we haveseen, in contrast to Spain, where the unions largely submerged their ambitionswithin the overall project of gradual reform, in Portugal the revolutionarynature of the transition process fostered workers' radicalization, deepenedresentment between workers and employers, and hindered the development of a newbargaining culture based on compromise. This legacy is still felt in thecountry and has hindered the modernization of the Portuguese industrialrelations system. In addition, state intervention increased during therevolution and the new constitution enshrined a new system of industrialrelations very favorable to Portuguese workers. All national banks andinsurance companies, as well as many manufacturing firms, were nationalized. Atthe same time, the revolutionary government approved new labor laws that wereinflexible. For instance, norms regulating redundancies, dismissals, and therules on severance pay were very restrictive.<spanlang=EN-US style='font-size:12.0pt;font-family:Georgia'>[1] Moreover, the constitution of 1976 enshrined the right to job security, andthis prevented successive governments from reforming the labor laws. Socialsecurity was extended to the whole population in 1974, but some benefitsremained low for European standards. Furthermore, most workers were covered bystatutory regulation, the government introduced a minimum wage in 1974 that isrevised every year, and it approved a new law in 1975 that made collectivedismissals difficult. These measured were slowly reversed in the 1980s whensuccessive governments led by the liberal-conservative Social Democratic Party,PSD, reformed the constitution and approved labor laws introducing a moreflexible legislation that facilitated collective dismissals and reduced thecosts of severance (Barreto 1992, 454-55; Barreto and Naumann 1998, 402). These developmentsresulted in a dramatic deterioration of economic conditions, with massunemployment, high inflation, huge budget deficits, and recession that exertedheavy pressures on the labor market and on companies, and led to deflationarypolicies by subsequent governments. Failed coup attempts in 1974 and 1975 gaveway to a new phase in the transition process that culminated in free electionsbased on universal suffrage in 1975 and 1976. After the elections the SocialistParty (PS), led by Mario Soares, became the largest party, and the CommunityParty was excluded from power. A new constitution was approved in 1976. Thispaved the way for the establishment of a new industrial relations framework.The following sections will outline this development.
THE MAIN ACTORS
Trade Unions
A Communist-led union coalition (Intersindical) emerged from the illegal and clandestine unionopposition movement during the authoritarian regime. This union formed thebasis of a national labor confederation after the Revolution, IntersindicalNacional, which emerged in 1974 when it gained control over most nationalunions. Two-thirds of existing unions joined Intersindical in 1974<spanlang=EN-US style='line-height:150%;font-family:Symbol'>-<spanlang=EN-US style='line-height:150%;font-family:Georgia'>75. Intersindicalsought the monopoly of the labor movement and advocated a unitary labororganization.<spanclass=MsoEndnoteReference>[2] TheCommunists' influence during the revolutionary period facilitated thisobjective, and the Intersindical achieved legal monopoly ofrepresentation under the union law of 1975. They failed, however, to controlthe rank and file. New representative bodies, the comissões de trabalhadores,or workers' commissions, emerged spontaneously in the workplaces outside ofunion control. The leaders of these commissions got involved in negotiationswith employers, organized strikes, and in some cases even managed hundreds ofsmall companies. Yet the leaders of these commissions opposed the CommunistParty and challenged the dominant position of the Intersindical. Theyreceived support from organizations and individuals opposed to the PCP, whichviewed them as an alternative to Intersindical (Barreto and Naumann1998, 409). In 1976 these commissions were legally recognized by theconstitution. Subsequently, they were regulated by a 1979 law that restrictedtheir role, and attributed to them the supervision of management and theparticipation in the administration of welfare issues within the firm (see thesection on collective bargaining below).
The end of the revolutionary period resulted in the approval of the 1976 constitution, whichabolished the legal monopoly for the Intersindical (Nataf 1995, 131;Barreto and Naumann 1998, 410). The new constitution adopted a model ofpluralistic representation, which allowed for the establishment of trade unionsat any level. Pluralism reflected the divisions of the revolutionary period.Disputes within the left between the Communists and the Socialists/SocialDemocrats who resented the Communist control over the labor movement resultedin the organization of new unions in all sectors. After the collapse of theauthoritarian regime, all parties sought roots in the working class, and partyactivists played a relevant role in the emergence of new unions. In a 1977Congress the Intersindical became the Confederação Geral dosTrabalhadores Portugueses, (the General Confederation of PortugueseWorkers, CGTP-IN).
Immediately after the formal abolition of the unity clause, thirty unions led by sectoral unions forthe banking, insurance, and office employees came together, and with thesupport of the Portuguese Socialist Party, PS, and the liberal-conservativePopular Democratic Party (PPD, later Social Democratic Party, PSD) founded the UniãoGeral de Trabalhadores, (the General Union of Workers, UGT).<spanclass=MsoEndnoteReference>[3] The major aim of the new organization wasto challenge Intersindical's monopoly of the labor movement. Thisdevelopment led to union pluralism and interunion competition at the workplacelevel. As a matter of fact, UGT was able to achieve a near monopoly in certainsectors, such as the financial sector, and grew rapidly in the manufacturingsector by signing collective agreements refused by CGTP. The Intersindical,however, has been able to maintain a position of dominance within the labormovement. It has 150 affiliated unions (UGT has 63). CGTP is dominant inmanufacturing, construction, electricity, road and urban transport, post andtelecommunications, and large sections of the civil service. UGT, for its part,is dominant in banking, insurance, several industries and services, andeducation, as well as in white-collar occupations.
In the 1980s the number of unions increased dramatically as new groups sought to represent particulargroups of workers. These new groups, however, do not consider themselves partof the union movement. This development has resulted in the fragmentation ofthe labor movement. CGTP represents 60 percent of unionized workers, UGT 30<spanlang=EN-US style='line-height:150%;font-family:Symbol'>-<spanlang=EN-US style='line-height:150%;font-family:Georgia'>35 percent, andindependent unions less than 10 percent (Barreto 1992, 464<spanlang=EN-US style='line-height:150%;font-family:Symbol'>-<spanlang=EN-US style='line-height:150%;font-family:Georgia'>66; Barreto and Naumann1998, 412). As we will see below, despite repeated attempts by UGT toconsolidate and concentrate the union movement, fragmentation and divisionshave remained. Only in 1988 did CGTP establish formal relations with UGT. Inthe 1990s there was a process of rapprochement between both unions, and someinitiatives for both organizations to merge. Nevertheless, as we will see below,the relationship between both confederations remains strained.
At this point it isimportant to stress that the Portuguese legislature has not given preferentialtreatment to any unions. In Portugal all unions are the same and have equalrights. Despite being highly interventionist (e.g., in the procedures coveringcollective bargaining), the Portuguese law does not include any criteria forrepresentatives or recognition procedures.
An important feature of Portuguese unions is their relative weakness and scarcity of financialresources (see Barreto and Naumman 1998, 412-15). As we will see below,membership declined dramatically in the 1980s after the conclusion of thedemocratic transition. They lack strong financial resources and often depend onexternal help for their survival. They also have few employees. Furthermore, amajor feature has been the support given to unions by political parties. Up tothe late 1980s, Portuguese Communist and Socialist trade unions have maintainedhistorically interlocking directorates between parties and unions. Theirdifferent ideological orientations were mirrored in their statutes andprograms. Up to the late 1980s, union leaders had party responsibilities and inmany cases political jobs. They have also been elected to Parliament. InPortugal the PS and the PSD have been dominant within the UGT, and the PCPwithin the CGTP. These institutional links between unions and parties stillprevail in Portugal, although partisan control of the unions is also waning.<ahref="#_edn4" name="_ednref4" title=""><spanclass=MsoEndnoteReference>[4]
Finally, Portugal experienced high levels of labor conflict in the 1970s. Most of it waspolitically motivated and connected to the transition to democracy. Industrialconflict, however, declined sharply in the second half of the 1980s, despitethe success of the general strike organized separately by all major unions in1988 to oppose the government's plan to liberalize the labor market andfacilitate collective dismissals.
The Union Structure
In Portugal, union fragmentation has had deleterious consequences for collective bargainingbecause it has hindered efforts to centralize and rationalize the outdatedstructure of collective bargaining. The combination of political cleavagesbetween the major unions, and the craft and territorial divisions imposed inthe "vertical unions" during the authoritarian regime have hamperedthe development of strong and articulated union structures. This problem isparticularly acute in Portugal where centrifugal pressures caused by regional,political, and occupational rivalries have generally impeded the development ofconcerted and unitary strategies by unions.
Dispersion and fragmentation are the predominant features of Portuguese union structure(Naumann and Stoleroff 2000, 557). Political schisms within Intersindical,coupled with the emergence of UGT and resistance from certain occupationalgroups (particularly office workers and professions with special functions) tointegrate into centralized organizations, hindered efforts to centralize andrationalize the outdated union structure. As a matter of fact, the number ofindividual unions increased from 307 in 1974 to 383 in 1996. This was theresult of two main processes. On the one hand, new unions were created insectors in which union activity was banned during the dictatorship (i.e., thepublic sector in central and local administration, education, health services,and public enterprises).<spanclass=MsoEndnoteReference>[5] Onthe other hand, political competition and class consciousness intensifiedcentrifugal pressures that hindered rationalization efforts.
CGTP and UGT remain confederations of vertical federations in which the degree of organizationalconsolidation varies. CGTP is a confederation of about twelve verticalfederations complemented by unions at the local level organized within twentydistrict unions or uniões that have autonomous status within theconfederation. To complicate matters further, many of CGTP's small unionaffiliates and even some federations (i.e., the teacher union) are notofficially affiliated with CGTP but are associated and integrated into CGTP'sstructure. UGT, for its part, has a dual regional and functional organization.Its structure is unbalanced. It has sixty three affiliated organizations led bythe three regional unions of bank employees, by the office workers' unions withan average of about 15,000 members, and by a large remaining group of smallerorganizations.<spanclass=MsoEndnoteReference>[6] Inaddition, federations are less important within UGT, and they focus mostly onthe coordination of collective bargaining. Furthermore, nearly 100 independentunions, mostly concentrated in the public service sector, are not affiliatedwith the two main confederations.<spanclass=MsoEndnoteReference>[7]
Union fragmentation intensified further with the foundation of all public sector unions after therevolution and the emergence of new associations to cater specific interests ofcertain groups of workers and professionals in the second half on the 1980s.Political competition and status consciousness have intensified theseprocesses. The consequence of these developments has been that since therevolution the number of service sector unions has increased considerably (seeNaumann and Stoleroff 2000, 554-57). Finally, at the end of the 1980s, the PSD labororganization, TSD, decided to create a third confederation of its own andterminate the alliance with the Socialists. This attempt failed when themajority of PSD activists within UGT rejected this proposal and remained insideUGT. Consequently the so-called Convention of Independent Unions, CSI, has alimited social base and low representativeness, with only seven occupationalunions and five sector unions. In sum, during the 1980s and 1990s there was acontradictory evolution within the trade union structures. On the one hand,CGTP and UGT attempted (with limited success in the case of UGT) to reorganizetheir structures and deepen their vertical integration. On the other hand, theemergence of new occupational independent unions intensified the fragmentationin Portuguese unionism. There are now 370 unions as compared with 328 in 1974(Barreto and Naumann 1998, 410-11).
At the beginning of the new century, the basic institutions of Portuguese industrial relations areclear. Union members at the enterprise level elect union delegates who becomethe main interlocutors with management. When there are several unions present,the unions' delegates establish an enterprise-based interunion committee(Naumann and Stoleroff 2000, 550). Based on a 1979 law, in a limited number offirms, all workers elect worker commissions (comissões de trabalhadores),which in most cases are run by the dominant union representatives (Stoleroff1995). Hence, in some medium-sized firms and in the majority of largecompanies, there is a dual model of workers' representation with trade unionrepresentation (in the form of shop stewards, joint shop-steward committees, orcomissões sindicais) and the workers' commission. In practice, however,this dual system of workers' representation stipulated by law is the exception.The existence of these representative bodies depends largely upon company sizeand to a lesser extent upon union membership density in the company (seeStoleroff 1995). Furthermore, as we will see below, these workers' commissionsonly have statutory rights of information and consultation, and they exist onlyin a considerably smaller proportion of companies than do trade unionorganizations.<spanclass=MsoEndnoteReference>[8] Inaddition, the right to call strikes, negotiate, and sign collective agreementsis reserved for union representatives. This institutional setting is closed atthe macrolevel with the Standing Committee for Social Concertation (CPCS), atripartite institution in charge of social bargaining.
Union Density
During the dictatorship membership in the "vertical" unions was compulsoryexcept in those sectors, such as the civil service, in which unionorganizations were illegal. Hence, the collapse of authoritarian regimesallowed unions to "inherit" a large number of members. In addition,the disappearance of the official unions, which motivated workers to join newunions that could articulate their demands, coupled with the euphoriaassociated with the transition to democracy and the wish by Portuguese workersto participate in public life and contribute to the democratization processes,fostered the high levels of union affiliation (Naumann and Stoleroff 2000).Consequently, during the first years of the transition process, affiliation washigh. Between 1979 and 1984, union membership (as a percentage of wage andsalary earners) reached 58.8 percent of salaried workers (Cerdeira, 1997, 46;see also Stoleroff and Naumann 1993; Naumman and Stoleroff 2000, 557).
This development, however, proved short lived. The political and economic conditions for unionparticipation deteriorated sharply in the second half of the 1970s. After theheight of the transition period, unions failed to live up to the expectationsof their affiliates and were not able to achieve outcomes favorable to theirmembers. They also failed to develop services to affiliates that would havemade membership more attractive. Therefore, once the transition euphoriadissipated, workers decided to cancel their memberships. In Portugal thisprocess was hastened by the Socialist government's decision in 1977 to repealthe automatic deduction of union dues from wages, with the aim of weakeningCGTP.<spanclass=MsoEndnoteReference>[9] The economic crisis that resulted inincreasing unemployment, the significant rise in temporary work, and informalemployment in the black economy,<spanclass=MsoEndnoteReference>[10]coupled with the growth of the service sector and the underground economy, aswell as the emergence of new forms of business organizations whereintraditional blue-collar unskilled workers were no longer dominant, have alsobeen mentioned as some of the reasons for the sharp decline in union membershipduring those years. Other explanations for falling membership include: poormember services, interunion competition, union politicization, and employers'pressures (Ribeiro, Leitão, and Harouna 1993). Finally, other authors havestressed the impact of the statutory extension of collective agreements tononmembers. Since all workers benefit from the agreements, they have littleincentive to join trade unions and pay union fees (Malo 2001; Bover, GarcíaPerea, and Portugal, 1997).
As a result of these developments, the proportion of union members in the laborforce has declined sharply over the past two decades. The level of affiliationreached its bottom in the mid-1980s.<spanclass=MsoEndnoteReference>[11] Between 1988 and 1990, there were approximately one million members or 30percent of dependent employed (Naumman and Stoleroff 2000, 557). Since thenunion membership (as a percentage of wage and salary earners) has declined 44.2percent between 1985 and 1995 and in 2000 stood at 25.6 percent. This placesPortugal in the group of Western European countries with low to medium uniondensity, significantly ahead of France or Spain. Union density is alsounequally distributed. In Portugal union density is higher in the primarysector and public services, and it is slightly below the general level inprivate industries and services. In addition, it is important to stress that inPortugal union membership is close to 100 percent in sectors where unions havethe monopoly of health care provisions (i.e., banking, insurance, andtelecommunications) (Bover, García Perea, and Portugal 1997, 14). For instance,in contrast with the general trend, banking unionism in Portugal approaches 90percent and membership has doubled since the revolution.<spanclass=MsoEndnoteReference>[12] Levels of unionization are thereforeparticularly strong in railways, banking, insurance, transport, and publiccompanies, and rather weak in construction, commerce, textiles, foodindustries, and ceramics. In Portugal the combination of increasing unionfragmentation, and an overall decline in union density has resulted in adecline in the total number of unionized workers per union (from 2,600 membersper union in the late 1980s to 2,000 in the late 1990s) (see Table 1). At theend of the 1990s, CGTP and its closely associated unions represented over 71percent of all unions members, and UGT less than 23 percent (see Naumann andStoleroff 2000, 557-58).
Table1: Reported Membership by Selected Unions in Portugal, 1995 |Ver PDF|
Business Organizations
The authoritarian corporatist legacy also left an important imprint in the configuration ofemployers' associations. However, in Portugal the business associations werenot integrated into the corporatist "national vertical unions."Businesses in Portugal created their own organizations, the grémiosnacionais, or "national guilds." Businesses, however, werereluctant to take part in the guilds. As long as they were not organized, firmsdid not have to bargain with labor, and this offered firms a strong incentiveto remain outside of the guilds. These guilds also lacked power and autonomy.The inefficiency of the system led to a profound transformation in the late1950s. Unions and guilds were viewed as classic organizations that impeded theovercoming of the class struggle. Therefore, the government introduced a newsystem based on corporaciones (corporations) that excluded single-peakassociations (Barreto 1992, 453).
Before the revolution, seven corporate groups, which have grown under the protection of the "NewState," had dominated the Portuguese economy. This situation changeddramatically during the democratic transition. Indeed, one of the mainconsequences of the Revolution of 1975 was the expropriation of the wholedomestic financial sector and important industrial and service companies(including oil, breweries, steel, transportation, and telecommunications). Thisdevelopment, however, proved short lived. The Cavaco Silva governments, as partof a comprehensive liberalization and privatization program, privatizedvirtually all of them by 1995.
After the collapse of the authoritarian regime the Portuguese business guilds (grémios) weredisbanded. During the democratic transition, employers lagged behind inestablishing their associations. Businesses are now organized in two separatestructures: the employers associations and the regional associations. Employerscreated the CIP (the Confederation of Portuguese Industry) in 1974, whichclaimed to represent all sectors, with the support of influential members ofthe two traditional regional industrial associations (Associação IndustrialPortuguesa, AIP Lisbon, and AIP Port) that had operated during the regime.Its main organizational foundations lay in regional associations in textiles,metallurgy, and construction. CIP is the dominating force on the employers'side. It was created to protect employers' interests at a time in which they werethreatened by the impetus of the revolutionary movement. At that time it wagedcampaigns against state intervention, restrictive labor regulation,"Marxist" economic strategies, and nationalizations, while leadingthe employers' struggle for survival. In more recent years its priorities laidin reducing the state role in the economy and improving the competitiveness ofPortuguese firms (Barreto and Naumann 1998, 406-8).
In addition, the CCP (the Confederation for Portuguese Commerce and Service) was founded in 1974. Itis not as powerful as the CIP because of the conflicting interests of itsaffiliates (wholesale versus retail) and the fact that employers in someimportant service sectors, such as transport, banking, and insurance, are notincluded. The third employers' confederation, the CAP (the Confederation ofPortuguese Agriculture), organizes large farmers<spanclass=MsoEndnoteReference>[13] (Naumann and Stoleroff 2000, 549<spanlang=EN-US style='line-height:150%;font-family:Symbol'>-<spanlang=EN-US style='line-height:150%;font-family:Georgia'>50). Theseorganizations have sought to defend the interest of businesses and have alsoacted as channels of communication with the government. Their major objectivein the 1980s was the reform of the prolabor legislation approved during therevolutionary period. The CIP rejected any bilateral negotiations with theunion confederation until 1990, but they participated actively in the ConselhoPermanente de Concertação Social.
These organizations provide a wide range of services to member firms. Membership data on theseassociations, however, are not reliable. The CPI is the strongest organization.It has claimed to represent 35,000 private companies, or 75 percent ofPortuguese firms (Barreto 1992, 461; Barreto and Naumann 1998, 407).<ahref="#_edn14" name="_ednref14" title=""><spanclass=MsoEndnoteReference>[14] Internal differences over strategies(i.e., on state intervention, economic policy, European integration, andcompetitiveness) and regional rivalries have hampered the functioning of theseorganizations. CIP gained further legitimacy and strength by the entry of AIPPort and AIP Lisbon in the late 1980s and early 1990s. Internal challenges aremore deeply rooted in the other two organizations. CCP is divided betweenwholesalers and retailers, and the major supermarkets created their ownassociation (APED) outside of the confederation. This has led to constantbattles between retailers and supermarkets. In addition, employers' associationsin banking, insurance, and transportation continue to be outside the confederalstructure. Finally, CAP's social base is being challenged by a newconfederation, the CAN, that organizes small and medium-sized firms, whichconstitute the majority of employers in the agricultural sector (Barreto andNaumann 1998, 408).
The business sector is also represented by regional associations that provide services such as salespromotion, fairs, training, and technological advise to member firms. Theseorganizations are smaller, but they are better organized at local levels. Thelargest one is the Associação Industrial Portuguesa, AIP, based inLisbon. This dual structure of employers' representation has resulted incompetition among them. These associations differ in critical issues such asthe role of the public sector and the state, economic polices, the EU, tradebarriers, and competition policies. These differences have prevented theintegration of these associations. Successive attempts to set up a unitaryorganization to represent business have failed. Only CIP, CCP, and CAP arerecognized by the state as employers' representatives in peak-level bodies likethe CPCS (Barreto 1992, 461; Barreto and Naumann 1998, 408).
INDUSTRIAL RELATIONSUNDER DEMOCRACY
Collective Bargainingand Wage Setting
A minimum wage is setby law each year and collective bargaining agreements set a starting wage foreach of the occupational categories established in the agreement, which alsoact as wage floors. Portugal shows high wage flexibility, and the wage floorsby categories are set in collective bargaining agreements at a much lowerrelative level, which gives employers more flexibility in wage determination.<ahref="#_edn15" name="_ednref15" title=""><spanclass=MsoEndnoteReference>[15]
Portuguese legislation does not define any criteria for "representativeness" as applied tocollective bargaining rights. The representation criteria and the rulesregulating authority to negotiate agreements are key factors that have limitedthe unions' bargaining power in Portugal. In Portugal, the representation of tradeunions and their ability to negotiate and sign collective agreements dependsmainly on the level of trade union membership.<spanlang=EN-US style='font-size:12.0pt;font-family:Georgia'>[16] The absence of criteria of representativeness means that all unions areconsidered to be representative and have the same rights.<spanclass=MsoEndnoteReference>[17] After 1976 the right to negotiate andsign collective agreements in Portugal has been reserved by law for unionrepresentatives. Workers' commissions only have statutory rights ofconsultation and information. Furthermore, collective bargaining is voluntary,since few sanctions can be imposed, and any union¾including minority unions<spanlang=EN-US style='line-height:150%;font-family:Symbol'>¾<spanlang=EN-US style='line-height:150%;font-family:Georgia'>can negotiate withmanagement. Therefore, collective bargaining depends largely on the employers'willingness to negotiate with a particular union. Both sides must comply withall legal requirements only after they have agreed to bargain formally. Theseprovisions have contributed to weakening unions in Portugal because they haveallowed employers to ignore the strongest union at the workplace and reachagreements with the "coziest" ones (Barreto and Naumann 1998, 411).
Since the Portuguese trade unions structure, as we have seen, is characterized by several unionsacting in an uncoordinated fashion, the consequence of these developments hasbeen that unions do not have as much leverage vis-à-vis employers. Otherfactors have contributed to limiting the power of unions in Portugal (Bover,García Perea and Portugal 1997, 115). Unions depend for their financing on thecontributions from their relatively small number of members.<spanclass=MsoEndnoteReference>[18] Moreover, interunion coordination isalso limited.
Furthermore, collective agreements only apply to workers represented by signatory unions. In practice,however, they are extended to all workers because the law does not allow fordifferentiated conditions within the workplace based on union membership(Barreto 1992, 470; Barreto and Naumann 1998, 417). As I indicated before, thisalso helps to explain the low levels of trade union membership in the country.Since all workers will benefit from the agreements, they have little incentiveto join trade unions and pay unions fees (see Malo 2001).
Since there is norequirement for an absolute majority of the union representatives to reach anagreement, and there are no recognition procedures or criteria of representativeness,firms in Portugal have been able to open negotiations with moderate unions withwhom they expected to reach more favorable agreements, (mostly independentunions and in some cases UGT). This has allowed employers to break the virtual"bargaining monopoly" that CGTP had in sectors such as manufacturing,construction, electricity, urban transport, post, telecommunications, and inlarge sectors of the civil service. Hence, in practice, a union, which is in aminority position in the sector, can reach an agreement with management thatcovers workers that are not members of that union because only one agreement isenforceable for the same group of workers within a company. This has limitedunions bargaining power in Portugal and hindered the establishment of uniformconditions at the national level. Therefore it is not surprising that wageincreases across sectors are not homogeneous (see Bover, García Perea, andPortugal 1997, 13). The consequences of an over-regulated and legalisticframework coupled with voluntary collective bargaining in Portugal helpsexplain the near absence of firm level bargaining in the private sector and thelittle impact it has over working conditions (Barreto and Naumann 1998, 418).
Once an agreement isreached and is registered and published by the Ministry of Employment, itremains in force until it is replaced by a new agreement, which legally cannotbe less favorable overall to the workers than the preexisting one. Theconsequence has been that employers view an agreement as a potential milestone,because once an agreement is concluded, it will form the basis of furtherdemands on the part of the unions.
Local unions or federations negotiate on wage and nonwage issues with the employers'associations, groups of companies, and in some cases large individual firms (Acordode Empresa). The major objective of bargaining has traditionally been thesettlement of wages. Yet, the government through the annual revision of minimumwages mostly does this. Employers can only negotiate the differences betweennational and industry minimum rates (Barreto 1992, 472). In practice deviationsfrom sector-level bargaining are common (Stoleroff 1995). This highly regulatedframework for collective bargaining has thus resulted in limited collectivebargaining in the private sector. Managers are reluctant to negotiate at thefirm level out of fear of activating unions' activities. Unions, weak at thefirm level, also prefer industry-level bargaining. Consequently, collectivebargaining takes place mostly at the industry level, and government regulationsstill play an important role. Firm-level collective agreements are possibleonly by setting more favorable conditions than their corresponding sectoralagreement. This helps explain the low incidence of firm-level agreements(Bover, García Perea, and Portugal 1997, 14). As we have seen, there has been atendency since the 1990s to move from regional to national industry agreements.
Differences in the union structure have also had a significant impact on wage bargaining. Theweakness of unions has hindered their attempts to set wages above the nationalminimum wage, particularly for lower and middle occupational categories ofworkers. It is not rare for firms to seek less favorable conditions than the onesestablished in sectoral-wide agreements, a process that requires theintermediation of the Ministry of Employment (Bover, García Perea, and Portugal1997, 13-<spanlang=EN-US style='line-height:150%;font-family:Georgia'>14).
Social Concertation
Following the revolutionary upheavals, intense efforts by the governments and social actorsto normalize industrial relations in Portugal led to the development of socialbargaining. Despite the antagonistic relationship between union and employersand the ideological divisions within the labor movement that had their roots inthe context of the revolution, the social actors have moved towards a lesspolarizing industrial relations model. Indeed, in Portugal globalization andEuropean integration have promoted rather that undermined social bargaining.Unable to escape from economic interdependence it has experimented with socialconcertation¾thatis, centralized agreements between business and labor organizations, often withthe participation of the state, on wages and other social goals<spanclass=MsoEndnoteReference>[19] ¾as a means to address and resolve tensions betweeneconomic interdependence and political sovereignty, and between monetary andexchange rate policies.
In Portugal social concertation started in 1987 and was consolidated throughout the 1990s. InPortugal, there have been social concertation agreements the following years:1987, 1988, 1990, 1992, and 1996, an Agreement of Strategic Concertation forthe 1997-1999 period, and two agreements in 2001.<spanclass=MsoEndnoteReference>[20]
Figure 1:Social Concertation in Portugal, 1986 -2001 |Ver PDF|
The emergence of national social bargaining in Portugal took place at the outset of a dramaticeconomic crisis that took place from 1983-85. To give an idea about themagnitude of the crisis, in one year (1984) the GDP declined 1.6 per cent,investment fell 18 per cent, unemployment shot up to 8.3per cent, inflationreached 29.3 per cent, disposable family income decreases by 3.7 per cent, andprivate consumption was down 3.0 per cent. The legislative elections of 1983had resulted in a ‘Centre Block’ coalition between the conservative SocialDemocratic Party (PSD) and the Socialist party (PS) under the leadership MarioSoares, (leader of the PS) as Prime Minister. This government implemented anIMF stabilization plan, and created the Permanent Council for SocialConcertation (CPCS) a state institution for tripartite macroeconomic and socialbargaining in 1984 (see below). The positive outcome of these polices becameevident in 1985 when the economy came out of the recession, and was harvestedby the PSD in the 1985 legislative election under the leadership of AnibalCavaco Silva.
Throughout 1986 the economy continued to improve helped by the external conjuncture and theaccession of Portugal to the EC. In order to reduce inflation the governmentpursued agreements with the social actors to implement incomes policy. Underthe guise of ‘recommendations on incomes policy’ the members of the CPCS (theUGT, the government, and the three representative employers’ associations, CIP,CCP, and CAP<spanclass=MsoEndnoteReference>[21] )reached an incomes policy agreement in 1986, which fixed wage increases at 7per cent, subject to actual inflation. This agreement dealt almost exclusivelywith the rate of growth of nominal wages for 1987 and it was based on inflationforecasts that proved correct, thus contributing to curbing inflation.
The process of social concertation continued after the legislative elections of 1987 when the PDS wona parliamentary majority. In October of that year CGTP, with the public supportof the Communist part (PCP), decided to enter the CPCS. The unions linked thegovernment’s program of structural reform (aiming at the revision of laborlegislation, privatization, and the revision of the Constitution and theAgrarian Reform) to incomes policy. On 18 January 1988 the social actorsrepresented in the CPCS reached a new agreement on incomes policy (except theCGTP and the CIP which refused to sign it).
Contrary to expectations, the disinflation process stopped in 1988, and UGT withdrew itssupport for the agreement when the government refused to adjust wage increasesto recognize higher inflation. The consequence of this development was that noagreements were reached for 1989 and 1990, although moderation continued toprevail in collective bargaining. The increase in inflation, however, fuelledby huge budget deficits pushed the social actors again to the bargaining table.In 1990 the government presented a social pact to the social partners, the Programade Progresso Económico e Social para os Años Noventa. This initiative ledto intense negotiations that concluded in the Acordo Económico e Social(AES, the Economic and Social Agreement) signed by all CPCS members except theCGTP. This pact included the reduction of the workweek from 48 to 44 hours,with the goal to pursue a gradual reduction to 40 hours by 1995, as well as awide range of other issues to be regulated by future legislation: dismissals,health, safety and hygiene at work, unemployment benefits, vocational training,working-time flexibility, supplementary social security in cases of industrialrestructuring, and employment of minors. The AES also covered collectivebargaining and included a recommendation on wage policy was also included(capping wage increases at 13.5per cent). The AES also included (for the firsttime in the course of tripartite negotiations) the annual revision of thenational minimum wage at 40,000 escudos.<spanlang=EN-US style='font-size:12.0pt;font-family:Georgia'>[22]The AES led to a new Pacote Laboral in 1991 to revise the legislation onfiring for inadaptation, work of minors, work hours, holidays, the rules ofcollective bargaining, and arbitration of labor conflict. In July of 1991, allthe CPCS members including CGTP signed two ‘sub-agreements’ on worksafety-hygiene and professional training.
Following the general elections of October 1991, which resulted in a PSD absolute majority, thesocial actors reopened negotiations in the CPCS with the aim of reaching a newAES. After gruesome and protracted negotiations over wage increases (marked bythe government’s insistence to contain wage costs), the three main employers’confederation, the UGT and the government signed a new agreement on February 15thof 1992. This pact set wage increases at 9.75 per cent, and minimum wageincreases at 11 per cent.
The victory of the Socialists Party in the 1995 general election led to the resurgence of socialbargaining with the 1996 ‘Short-Term Social Dialogue Agreement’. This pact wasfollowed by the 1996 Acordo de Concertação Estratégica, ACE (the‘Strategic Concertation Agreement’) that covered the 1997-99 period. Itcomprised a catalogue of macro-economic aims and a program for employment andcompetitiveness. Among the issues included in this pact were: the contractualdistribution of productivity gains, the promotion of competitiveness amongPortuguese companies, and a policy of overall wage growth consistent with goalsto achieve international competitiveness and the integration of Portugal intothe European Monetary Union. This agreement covered most areas of macroeconomicand social policies, including the orientation of economic policies, incomespolicies (the agreement set a reference to cap average wages and pensions),employment policy, professional training, labor legislation, collectivebargaining, social security, and the contribution to the competitiveness ofPortuguese firms. The agreement also established a commission to follow up andguarantee the fulfillment of its provisions integrated by representatives fromthe signatories.<spanclass=MsoEndnoteReference>[23]Finally, the social actors reached two social pacts in 2001: the ‘Agreement onEmployment Policies and Vocational Training” and the ‘Agreement on WorkplaceWorking Conditions, Hygiene and Safety, and to Reduce Work Accidents’.
The predominant position in Portugal is that the concertation process has been very positive.<ahref="#_edn24" name="_ednref24" title=""><spanclass=MsoEndnoteReference>[24] By allowing for a reduction of unitlabor costs, they improved the external competitiveness of Portuguese firms,contributed to the reduction in inflation from 13.4 per cent in 1990 to lessthan 3 per cent in 1999, and kept unemployment at levels below those in otherEuropean countries (around 6 per cent). Finally, they also contributed tosocial peace. Portugal, which as late as 1997 was considered an outsidecandidate for joining the Euro-zone, was able to comply comfortably with theMaastricht criteria, and, in part due to the concertation process, it was ableto do it in a relatively painless way. For instance, Portugal was the onlycountry able to reduce its budget deficit to below 3 per cent of GDP (theMaastricht criteria) while increasing current government spending. And thisstands in stark contrast with the disappointing performance of the Spanisheconomy after concertation failed in 1986.
Table2: CPI, Contractual Wages, Productivity, and Unemployment in Portugal, 1987 -2000 (percentagechange over previous year) |Ver PDF|
Finally, the process of social concertation in Portugal has also been credited for itscontribution to social bargaining, solidarity, and social cohesion. It has alsohelped develop institutional mechanisms that have allowed the social partnersto participate in the decision making process, thus deepening democracy, andfostering social peace.
The resurgence of social concertation in Portugal was the result of the reorientation of thestrategies of the social actors. A new set of constraints and opportunities hasfacilitated the emergence of new strategies among the social actors. First, inthe new context of the 1980s and 1990s, trade union organizations havesupported tripartite bargaining as a defensive strategy to retake the initiativeand influence policy outcomes. The decision by the unions to return to thebargaining table was for the most part a defensive one, motivated in part bytheir weakening at the firm level (evidenced by the relative decline in uniondensity), and their incapacity to effectively mobilize workers in a response tomanpower policies to liberalize the labor market. In other words, with theirsupport for these macroeconomic agreements, labor sought to mitigate thedecline in its bargaining power at the workplace level and participate in thepolicy-making process Royo 2002).
In addition, the resurgence of social bargaining has been fostered by a process of institutionallearning, which has led the social actors to conclude that previousconfrontational strategies were detrimental to the interest of theirconstituencies and threatened their own survival. This development alsoreflects an attempt by the social actors to reconcile the need to control coststhrough more flexibility in hiring practices and the need for cooperativerelations at the firm level in order to remain competitive. In other words,these agreements have constituted an institutional mechanism to supportbusiness competitiveness through consultative practices (see Regini 2000a).
Finally, the emergence of new institutions to promote tripartite social bargaining (i.e. the PermanentCouncil of Social Concertation, CPCS) has resulted in the institutionalizationof the political struggle among the governments, employers, and trade unions,and it has contributed to a transformation in the pattern of industrialrelations. In other words, I the choices made by the social actors were lessconditioned by preexisting institutions. On the contrary, the changing balanceof power affected the predisposition of the social actors to pursue theirstrategies through a new set of institutions. At the same time, new emergingconstraints and incentives to change largely determined their interaction andstrategies (Royo 2002).
THE PORTUGUESE SOCIALBARGAINING MODEL
Institutional and structural conditions in Portugal provide a fruitful ground for analyzing thearguments developed by the neocorporatist literature. It lacks some of theconditions specified by the literature that characterize neocorporatistsettlements: Portuguese labor unions do not organize a high proportion of theworking population and do not have a monopoly of representation. Indeed,Portugal has divided and relatively weak labor unions with relative low levelsof affiliation Fragmentation is particularly acute although two majorconfederations, UGT and CGTP, dominate the labor movement. Moreover, thecountry has a tradition of confrontation among the major confederations alongideological lines, and a Communist-oriented union has been dominant for anextended period of time. The CGTP has taken steps to break some links with theCommunist Party, but the PCP is still influential within the union and plays animportant strategic role. This has prevented the consolidation of goodrelationships between UGT (in which the PS and the PSD still play a role) andCGTP. Moreover, unions are also understaffed and lack the organizational andfinancial clout of their European counterparts. Moreover, there is alsofragmentation among employers, with three associations vying for the support offirms. Finally, Portugal has a relatively decentralized systems of collectivebargaining, a development, according to the neocorporatist literature, notconducive to wage moderation.
Other factors, however, have favored the development of social concertation. For instance, unionsprefer centralized bargaining to decentralization in order to overcome theirweakness at the firm level. Furthermore, there are relatively strong businessorganizations that monopolize the representation over business. Theseorganizations are not adamantly opposed to unions and are willing to avoidideological attacks against the labor movement. They have also been willing tonegotiate with unions to reach a social compact.
The Portuguese concertation model has been characterized by several specific features thathave configured a concertation process markedly different than the one thattook place in other countries, such as Sweden, Austria, and the Netherlands. InPortugal and the social bargaining process has been characterized by: Theprimacy of political considerations over other objectives, strong stateintervention, a unique institutional setting, specific goals related to theexisting political and economic framework, and unions' subordination to politicalparties (see Royo 2000, 210-14).
A key factor that helps to explain the evolution in industrial relations' patterns that has emerged inPortugal has been the mode of the democratic transition. The revolutionaryphases of the democratization process fostered the radicalization of workersand intensified class antagonisms (Barreto and Naumann 1998).<spanclass=MsoEndnoteReference>[25] This development has left a legacy ofdistrust among the actors and has deepened the politicization of the industrialrelations' system. Portuguese labor was a major actor during the transitionprocess and participated actively in the development of the 1976 Constitution,which resulted in the proworkers' stance of that constitution (see Durán Muñoz1997). The consequence of this development has been that successive democraticgovernments have faced constraints when they tried to reform labor laws to makethem more favorable to business. For instance, in 1987 the PortugueseConstitutional Court declared unconstitutional a labor reform approved by thePSD government. Consequently, businesses' point of view has never had hegemonicinfluence and were aware that they had to negotiate with labor to reform laborlaws.
In addition, one of the major features that facilitated the development and institutionalization ofsocial concertation in Portugal was the creation in 1983 by the PS-PSDgovernment of the Conselho Permanente de Concertação Social, (CPCS), thePermanent Council for Social Concertation. This institution was in charge offorging consensus among the social actors and facilitating concertation. Themajor function of this institution is to formalize mechanisms of participation,guarantee the secrecy and transparency of the bargaining process, and make surethat the agents' opinions are taken into consideration when approvinglegislation that affects them. The CPCS has been able to moderate CGTP'sopposition to centralized bargaining, and has fostered collaboration betweenUGT and CGTP.
Furthermore, in Portugal the party in government has never been able to forge a constitutionalmajority to impose its views¾that is, the PSD never received a sufficient majority toreform the constitution by itself, hence the need to forge alliances with theother social actors to reform the system. Institutional factors also help toaccount for outcomes. Portugal has a presidential system. While the presidentdoes not have the powers of the French president¾or even the U.S. president<spanlang=EN-US style='line-height:150%;font-family:Symbol'>¾<spanlang=EN-US style='line-height:150%;font-family:Georgia'>he has been able toblock government proposals when he opposed them. One of the major features ofthe Portuguese presidential system is the president's power to refercontroversial legislation to the Constitutional Court. This balance has beenreinforced when the country elected a president from a different party than theone in government. In the second half of the 1980s during the PSD' rule, MarioSoares was elected President with the support of the PS and PCP parties. He wasable to restrain the reform impetus of the PSD government and safeguard therights of workers. In 1986 he prevented the implementation of the labor reformapproved by the PSD government. He sent it to the Constitutional Court, whichdeclared it out of conformity with the regime's constitution. He used thispower thirty three times since 1986 and succeeded two-thirds of the time inforcing the PSD to redraft important legislation (Nataf 1995, 191).
Finally, the country’s political parties still play a critical role in the unions (and vice versa).There are representatives of unions elected to Parliament in party lists and partyrepresentatives in the unions' executives committee. This has a critical rolein concertation because it has allowed parties (particularly the PSD and PS) toinfluence unions (UGT) to reach concertation. The UGT is not only dominated bya single party; both the Socialist Party, PS, and the Social Democratic Party,PSD, control the unions that integrate UGT (in 1981 the PS controlled 20 unionsand the PSD 24). The executive is organized along party lines, and both partiesagree that the union should be involved in a national dialogue about economicpolicy. Hence, the UGT rejects a class-conflict approach and defends consensusand negotiation over confrontation (Nataf 1995, 143).
CONCLUSIONS: The Europeanizationof Interest Groups?
The process of European integration has exerted significant influence in the industrial relationsrealm, not only through the implementation of the acquis communautaireand European regulation on social affairs, but also by promoting elitesocialization and the development of transnational networks, which proved vitalfor the strengthening of interest groups (they received substantive supportfrom their European counterparts). Furthermore, the development of economicinterests and networks at the European level also strengthened the support ofeconomic actors for democracy, and the European economic and social model. Themost important effect, however, has been that Europeanization has fostered theopening of the Portuguese economy to increasing competition, which has led to privatizations,downsizing and internal restructuring of economic sectors, and theliberalization of the economy. These developments have generated pressures andhave had significant influence in the social actors thus, contributing to theemergence of a new pattern of industrial relations.
Yet, the legacies of authoritarianism and the experience of the revolutionary period have hinderedefforts to institutionalize a modern and stable industrial relations settingbased on trust. Indeed, Portuguese industrial relations are still marked by theheritage of authoritarian corporatism and the specific characteristics of thedemocratic transition, in particular, the fact that revolutionary massmobilizations fostered radicalization and class antagonism and led to stateinterventionism and regulation (Naumann and Stoleroff 2000, 547). The absenceof trust is rooted in the revolutionary turmoil, linked with the goal toeliminate capitalism, and the establishment of legislation beneficial toworkers. These developments shifted the balance of power between labor andcapital and consequently the political role of organized labor has been fairlystrong vis-à-vis organized business. The interclass conflict was aggravated bythe split between the Communists and the Socialists which led, as we have seen,to the fragmentation of the labor movement. As a result, differences instrategy, structure and practices impede closer relations among unions. Theconsequences are still felt today and have mitigated the effects of Europeanizationand limited its impact on the behavior and ideological outlook of actors, thushindering the establishment of a model based on trust and cooperation:Ideological divisions and polarization, fragmentation of the labor movement andbusiness, rigidities in the labor market (i.e. limited redundancies and narrowdefinition of fair dismissals); antagonistic relationship between labor andcapital; and high levels of mobilization and conflict.
The current state of affairs has significant consequences. One of the main challenges for theso-called under-organized economies is to build the coordinating capacity amongthe social actors that will allow them to respond to international pressuresand solve the economic problems that result from increasing internationalcompetition and market integration.<spanclass=MsoEndnoteReference>[26] Unfortunately in Portugal there have been limited improvements in technology,management, and commercial strategies, as well as limited growth ofproductivity. Competitiveness is still based on low wages. However, this modelis not sustainable in a global world in which Portugal faces increasingcompetition from the new EU member states and from the low cost economies ofEast Asia.
The competitivenes schallenge requires structural reforms and productivity growth, which willdemand higher investment in infrastructure, efforts to increase the quality ofeducation, the rigorous promotion of competition in all areas, and taxsimplification. Portugal needs to shift from a low-cost model toward high-valueadded one based on value-added the capital intensity of production. This willdemand investment in capital technology, a new culture of entrepreneurship,human capital with strong skills, and more importantly (and connected to thispaper) a flexible and adaptable industrial relations framework based on trustand cooperation. Indeed, while changes in production regimes and occupationalstructure demand greater flexibility, increasing competition rewardsinstitutional mechanisms that facilitate co-operation among the social actorsand tilt the balance of wage-setting toward the tradable sector of the economy.Hence the importance of social bargaining, which is key to promote a shift froma low-cost model toward high-value added one.
What are the prospects for national social bargaining? It is still not clear whether current trends willpersist in the future, whether they will consolidate the traditional dominantrole of the state in industrial relations, or permit the social actors to takethe initiative and assert their autonomy. The success (or failure) of theseinitiatives will determine the consolidation of this approach. As we have seen,the return of national social bargaining has had positive consequences for thePortuguese economies and contributed to sustained rapid growth. At the sametime, the preceding discussion suggests, that the motivations that led thesocial actors to return to national social bargaining, are more structural thanthe goal of participation in EMU and are likely to persist into the future. Thesocial actors should have powerful incentives to continue this approach giventhe difficulties that the government and employers had in the past controllingoverall wage growth without the support from unions, coupled with the erosionthat further fragmentation would have on the position of the mainconfederations. Furthermore, the examination of the role played by the CES andthe CPCS suggest that a co-operative strategy based on social bargaining willlast longer the more the social actors have been able to develop a capacity forstrategic learning.
At the same time, other developments favor the continuation of these processes. First, wage moderationis key to close the gap with the EU richer countries (GDP per head in Portugalis only 74 per cent of the EU average), to exploit Europe-wide specialization,and to attract investment from its European partners (average hourlycompensation in manufacturing is still less than half the German level). Inaddition, the abandonment in of comprehensive macrobargaining strategies<spanlang=EN-US style='line-height:150%;font-family:Symbol'>¾<spanlang=EN-US style='line-height:150%;font-family:Georgia'>that covered everyissue and culminated in macroagreements¾in favor of a new strategy basedon different bargaining tables is more conducive to agreements. The Portuguesesocial actors have adopted a more flexible approach through the parallel negotiationof various social concertation agreements, each of limited scope. Thisbargaining strategy is based on package deals that include both labor marketorganization and flexibility, as well as substantial social policy reforms. Thenew pacts seek to maintain equilibrium between flexibility and solidarity, andbetween equity and efficiency. They are part of a political exchange: socialbenefits and employment in exchange for flexibility and wage moderation. Incountries such as Portugal, where unilateral reforms have not been effectiveand have encountered significant resistance, governments are likely to continueusing this strategy in order to gain legitimacy for unpopular labor and socialreforms and to overcome the institutional veto by the social partners. Thesocial partners, in turn, are likely to accept this approach as long as theyparticipate in the policy-making process and receive compensation. Finally, anadditional incentive is the fact that social bargaining helps prevent anegative spillover from social policy into wage bargaining.<spanclass=MsoEndnoteReference>[27]
For Portugal, with an industrial relations’ settings deeply rooted in the law and with strong stateintervention, the challenge will be to build new institutional mechanisms thatwill provide the instruments needed for governments to adopt the adequatesupply-side policies and contain inflation while maintaining sound fiscalpolicies, and for the micro actors to have the necessary internal and externalflexibility and the lower costs to compete effectively in a globalize market.Social bargaining is the adequate instrument to achieve these goals. Itprovides the social actors with processes to achieve a balance betweenefficiency and solidarity while overcoming veto points.
Finally, European Monetary Union will mean further restrictions on domestic economic policiesbecause monetary union subjects macroeconomic policy in the EMU area to asingle monetary authority, the independent European Central Bank. Although somescholars have already predicted the dismissal of centralized concertationschemes, new analyses are proving the importance that incomes policy will havein the context of the monetary union.<spanclass=MsoEndnoteReference>[28] Incomes policy, with its influence on labor relations and labor costs, seems tocontinue to be an adequate instrument to enhance competitiveness and contributeto the convergence objective pursued by the European economies. The benefits ofcentralized wage bargaining, however, hinge largely on the ability of unionleaders to control overall wage growth in order to avoid monetary policymeasures that will result in higher unemployment.<spanclass=MsoEndnoteReference>[29] The EMU will result in thedecentralization of the level of wage bargaining across the EU because overall,the most encompassing union organizations will be less inclusive, and, therefore,they may have less incentives to internalize the inflationary pressures of wageincreases.<spanclass=MsoEndnoteReference>[30] Therisk will be that in the new EMU context, in which wage bargaining isrelatively fragmented but there is s single monetary authority for the area,wage bargainers will be less responsive to threats from the ECB. Nevertheless,since unit labor costs will still remain a critical factor in improvingcompetitiveness, there will be strong pressures on governments, employers, andunions to pursue national social bargaining.
BIBLIOGRAPHY
<spanlang=EN-US style='line-height:150%;font-family:Georgia'>Barreto, José, 1992."Portugal. Industrial Relations Under Democracy," in A. Ferner and R.Hyman, eds., Industrial Relations in the New Europe. Cambridge:Blackwell.
<spanlang=EN-US style='line-height:150%;font-family:Georgia'>Barreto, José, andReinhard Naumann, 1998. "Portugal. Industrial Relations UnderDemocracy," in A. Ferrer and R. Hyman, eds., Changing IndustrialRelations in Europe. Portugal. Cambridge: Blackwell, pp. 395–425.
<spanlang=EN-US style='line-height:150%;font-family:Georgia'>Bermeo, Nancy Gina,1998. "Learning from the Portuguese Experience. Some Quick Conclusionsabout Some Long Processes," in Antonio Costa Pinto, ed., ModernPortugal. Palo Alto, CA: The Society for the Promotion of Science andScholarship.
<spanlang=EN-US style='line-height:150%;font-family:Georgia'>Bermeo, Nancy Gina,ed., 1999. Unemployment in Southern Europe. Coping with the Consequences.Special issue in South European Society & Politics. Vol. 4, no. 3.Essex, UK: Frank Cass.
<spanlang=EN-US style='line-height:150%;font-family:Georgia'>Bover, Olympia, SamuelBentolila, and Manuel Arellano, 2000. "The Distribution of Earnings inSpain During the 1980s. The Effect of Skill, Unemployment, and UnionPower." Servicio de Estudios. Documento de Trabajo # 0015. Madrid: Banco de España.
<spanlang=ES style='line-height:150%;font-family:Georgia'>Branch, Ann P., 1998. <spanlang=EN-US style='line-height:150%;font-family:Georgia'>"The Impact of theEuropean Union on National Trade Unions." Paper presented at the AnnualMeeting of the American Political Science Association, Boston. September 3–6.
<spanlang=EN-US style='line-height:150%;font-family:Georgia'>Brandão de Brito, JoséMaria, 1998. "The Portuguese Economy. From Salazarism to the EuropeanCommunity," in Antonio Costa Pinto, ed. Modern Portugal. Palo Alto,CA: The Society for the Promotion of Science and Scholarship.
<spanstyle='line-height:150%;font-family:Georgia'>Campos Lima, Maria da Paz, andReinhard Naumann, 1997. "Social Dialogue and Social Pacts inPortugal," in Giuseppe Fajertag and Philippe Pochet, eds., SocialPacts in Europe. Brussels: ETUI.
<spanstyle='line-height:150%;font-family:Georgia'>Campos Lima, Maria da Paz, andRichard Naumann, 2000. "Social Pacts in Portugal. From Comprehensive PolicyProgrammes to the Negotiation of Concrete Industrial RelationsReforms?" in Giuseppe Fajertag and Philippe Pochet, eds. <spanstyle='line-height:150%;font-family:Georgia'>Social Pacts in Europe–NewDynamics.Brussels: ETUI.
<spanstyle='line-height:150%;font-family:Georgia'>Cabral, Antonio José, 1996. Crescimento,Competividade e Emprego. Lisbon: Conselho Economico e Social.
<spanstyle='line-height:150%;font-family:Georgia'>Cardoso, J. L., J. Brito, and F.Mendes, 1990. Empresarios e Gestores da Indústria em Portugal. Lisbon:Dom Quixote.
<spanstyle='line-height:150%;font-family:Georgia'>Carvalho da Silva, Manuel, 1997."O Sistema da Concertação Social, O Dialogo e a Negociação Colectiva emPortugal. Riscos da Sua Corporativição." Lisbon: CGTP IntersindicalNacional. Mimeo. October 22.
<spanstyle='line-height:150%;font-family:Georgia'>Carvalho da Silva, Manuel, 2000."A Reforma do Pacto Social," in Various Authors, A Reforma doPacto Social. Lisbon: INCM.
<spanstyle='line-height:150%;font-family:Georgia'>Cerdeira, Maria da Conceiçao,1997. A Evolução da Sindicalização Portuguesa de 1974 a 1995. Lisbon:Ministerio para a Qualificação e o Emprego.
<spanstyle='line-height:150%;font-family:Georgia'>Cerdeira, Maria da Conceição,1999. "Mudanças Organizacionais e Negociação Colectiva," in 8Encontro Nacional da APSIOT. Lisbon: APSIOT.
<spanstyle='line-height:150%;font-family:Georgia'>CGTP, 2000. Congresso CGTP. OSindicalismo do Século XXI. Programa de Acção e Resoluções. Lisbon: CGTP
<spanstyle='line-height:150%;font-family:Georgia'>Conselho Económico e Social, 1993.Os Acordos de Concertaçao Social em Portugal (I–Estudos). Lisbon: CES.
<spanstyle='line-height:150%;font-family:Georgia'>Da Costa, Pedro Ferraz, 2000."A Evolução Dos Salarias e a Competitivadade Externa." Mimeo.Lisbon: CIP.
<spanstyle='line-height:150%;font-family:Georgia'>Da Silva Lopes, José, 1997."A Concertação Social em Portugal." Lisbon: Conselho Economico eSocial. December 12. Mimeo.
<spanstyle='line-height:150%;font-family:Georgia'>Da Silva Lopes, José, 1998."A Flexibilidade no Mercado de Trabalho e o Emprego em Portugal," inVarious Authors, Flexibilidade e Relações de Trabalho. <spanlang=ES style='line-height:150%;font-family:Georgia'>Lisbon: CES.
<spanlang=ES style='font-size:12.0pt;line-height:150%;font-family:Georgia'>Da SilvaLópes, J., ‘El Consejo Económico y Social de Portugal’, in F. Durán López,(ed.), El Dialogo Social y su Institucionalización en España e Iberoamérica(Madrid: CES 1999), pp. 95-96.
<spanstyle='line-height:150%;font-family:Georgia'>Dornelas, António, 1999. "AsRelações Industriais em Portugal. E Possivel Mudar? E Possivel Nao Mudar?"Paperpresented during the conference "Portugal. Strategic Options in a EuropeanContext." Center for European Studies, Harvard University, Boston.November 20–21.
<spanlang=EN-US style='line-height:150%;font-family:Georgia'>Dornelas, António,2000. "InterogaçõesSobre as Perspectivas Futuras das Relações Industriais em Portugal." <spanlang=EN-US style='line-height:150%;font-family:Georgia'>Paper presented at the8th Conference of the APSIOT, Lisbon:
<spanstyle='line-height:150%;font-family:Georgia'>Dornelas, António, and Pedro Dias,1992. Neo-Corporativismo? Sobre o Desenvolvimento da Concertação Social emPortugal. Dissertação de Licenciatura em Sociologia Politica. Mimeo.Lisbon: ISCTE
<spanstyle='line-height:150%;font-family:Georgia'>Durán Muñoz, Rafael, 1997. <spanlang=ES style='line-height:150%;font-family:Georgia'>Acciones Colectivas yTransiciones a la Democracia. España y Portugal, 1974–1977<spanlang=ES style='line-height:150%;font-family:Georgia'>. Madrid: Centro deEstudios Avanzados en Ciencias Sociales.
<spanstyle='line-height:150%;font-family:Georgia'>Ferraz da Costa, Pedro, 2000."Depoimento," in Various Authors, A Reforma do Pacto Social. Lisbon:INCM.
<spanstyle='line-height:150%;font-family:Georgia'>Ferreira, António Casimiro, 1996. ProblemasActuais da Contratação Colectiva em Portugal e na Europa. Lisbon: FundaçãoFriedrich Ebert.
<spanstyle='line-height:150%;font-family:Georgia'>Freire, João, 1995. O TrabalhoIndependente em Portugal. Lisbon: Centro de Investigação e Estudos deSociologia.
<spanstyle='line-height:150%;font-family:Georgia'>Gama, Vasco da, 2000. "AReforma do Pacto Social. Painel: Negociação Colectiva e ConcertaçãoSocial," in Various Authors, A Reforma do Pacto Social. <spanlang=EN-GB style='line-height:150%;font-family:Georgia'>Lisbon: INCM.
<spanlang=EN-GB style='line-height:150%;font-family:Georgia'>Hall, Peter, and RobertFranzese, 1998. "Mixed Signals. Central Bank Independence, CoordinatedWage-Bargaining, and European Monetary Union," in InternationalOrganization, 52, no. 3, pp. 505–35.
<spanlang=EN-US style='line-height:150%;font-family:Georgia'>Hall, Peter, and DavidSoskice, eds., 2001. Varieties of Capitalism. The Institutional Foundationsof Comparative Advantage. New York: Oxford University Press.
<spanlang=EN-US style='line-height:150%;font-family:Georgia'>Hassel, Anke andBernhard Ebbinghaus, 2000. "From Means to Ends. Linking Wage Moderationand Social Policy Reform," in Giuseppe Fajertag and Philippe Pochet, eds.,Social Pacts in Europe. New Dynamics. Brussels: ETUI.
<spanlang=EN-US style='line-height:150%;font-family:Georgia'>Wage-Bargaining inOrganized Capitalism. New York: Cambridge University Press.
<spanlang=FR style='line-height:150%;font-family:Georgia'>Lima, Marinus Pires de, etal., 1996. "AOrganização da Indústria Automóvel na Península de Setúbal," in AnáliseSocial, no. 139, 1996.
Lima,Marinus Pires de, 1999. "Reflexões Sobre a Negociação Colectiva e aConcertação Social em Portugal." Paper presented at the ConfêrenciaInternacional Sobre A Reforma do Pacto Social, Lisbon: November 8 and 9.
<spanstyle='line-height:150%;font-family:Georgia'>Lima, Marinus Pires de, 2000. "Reflexõessobre a Negociação Colectiva e a Concertação Social em Portugal," inVarious Authors, A Reforma do Pacto Social. Lisbon: INCM, pp. 301–75.
<spanstyle='line-height:150%;font-family:Georgia'>Lopes, Fernando Ribeiro, 1998."A Contratação Colectiva," in Antonio Moreira, ed., I CongresoNacional de Direito do Trabalho. Coimbra: Almedina.
<spanstyle='line-height:150%;font-family:Georgia'>Lucena, Manuel, and Carlos Gaspar,1991. "Metamorfoses Corporativas? Associações de Intereses Económicos eInstitucionalização da Democracia em Portugal (I)," in Análise Social,Vol. XXVII, no.114, pp. 847–904.
<spanstyle='line-height:150%;font-family:Georgia'>Lucena, Manuel, and Carlos Gaspar,1992. "Metamorfoses Corporativas? Associações de Intereses Económicos eInstitucionalização da Democracia em Portugal (II)," in Análise Social,Vol. XXVII,no.115, pp. 65–90.
<spanlang=EN-US style='line-height:150%;font-family:Georgia'>Magone, José M., 2001. IberianTrade Unionism. Democratization Under the Impact of the European Union. <spanlang=ES style='line-height:150%;font-family:Georgia'>Somerset, NJ: TransactionBooks.
<spanlang=ES style='line-height:150%;font-family:Georgia'>Malo, Miguel Angel, 2001."Elecciones Sindicales y Comportamiento de los Sindicatos Españoles. UnaPropuesta," Estudios Sobre la Economía Española # 93. Madrid:FEDEA.
<spanlang=ES style='line-height:150%;font-family:Georgia'>Marvão, Josefina Pinto,1993. "O Acordode Segurança, Higiene e Saúde no Local de Trabalho," in Conselho Económicoe Social, Os Acordos de Concertação Social em Portugal. <spanlang=ES style='line-height:150%;font-family:Georgia'>Lisbon: Conselho Economicoe Social.
<spanlang=ES style='line-height:150%;font-family:Georgia'>Monteiro Fernandes,Antonio, 1999c. "La Concertación Social y el Tripartismo. La ConcertaciónSocial en Portugal," in Federico Durán López, ed., El Dialogo Social ysu Institucionalización en España e Iberoamerica. <spanstyle='line-height:150%;font-family:Georgia'>Madrid: CES.
<spanstyle='line-height:150%;font-family:Georgia'>Monteiro Fernandes, Antonio, 2000."Competitivaidade, Cidadania e Direito do Trabalho," in VariousAuthors, 2000. A Reforma do Pacto Social. Lisbon: INCM.
<spanstyle='line-height:150%;font-family:Georgia'>Mozzicafreddo, Juan, 1995."Concertação Social e Exclusão Social," in O&T, pp.97–119.
<spanstyle='line-height:150%;font-family:Georgia'>Mozzicafreddo, Juan (1997) 2000. Estado-Providenciae Cidadania em Portugal. Oeiras: Celta Editora.
<spanstyle='line-height:150%;font-family:Georgia'>Mozzicafreddo, Juan, 2000a. "ConcertaçãoSocial. Processos de Institucionalização e Efeitos Sociais," in Mozzicafreddo,Juan, Estado-Providencia e Cidadania em Portugal. <spanlang=EN-US style='line-height:150%;font-family:Georgia'>Oeiras: Celta Editora,pp. 71–94.
<spanlang=EN-US style='line-height:150%;font-family:Georgia'>Nataf, Daniel, 1995. Democratizationand Social Settlements. The Politics of Change in Contemporary Portugal.Albany, NY: State University of New York Press.
<spanlang=EN-US style='line-height:150%;font-family:Georgia'>Naumann, Richard, 1997."Portugal" in Various authors, Collective Bargaining in WesternEurope 1996–1997. Brussels: ETUI.
<spanlang=EN-US style='line-height:150%;font-family:Georgia'>Naumann, Richard, 1998."Portugal" in Various authors, Collective Bargaining in WesternEurope 1997–1998. Brussels: ETUI.
<spanlang=EN-US style='line-height:150%;font-family:Georgia'>Naumann, Richard andAlan Stoleroff, 1996. Handbook of Trade Unions in Europe. Portugal. Brussels:ETUI.
<spanlang=EN-US style='line-height:150%;font-family:Georgia'>Naumann, Reinhard andAlan Stoleroff, 2000. "Portugal," in Bernhard Ebbinghaus and JelleVisser, eds.. The Societies of Europe. Trade Unions in Western Europe Since1945. New York: Grove's Dictionaries.
<spanlang=EN-US style='line-height:150%;font-family:Georgia'>Pérez, Sofía, 1998."Yet the Century? The Return to National Social Bargaining in Italy andSpain, and Some Possible Implications." Paper prepared for delivery at the1998 Annual Meeting of the American Political Science Association, Boston,August.
<spanstyle='line-height:150%;font-family:Georgia'>Proença, Joao, 1999."Diálogo, Negociação e Concertação em Portugal." Lisbon: Uniao Geralde Trabalhadores. Mimeo.
<spanstyle='line-height:150%;font-family:Georgia'>Proença, João, 2000."Diálogo, Negociação e Concertação em Portugal. Comentario," inVarious Authors, A Reforma do Pacto Social. Lisbon: INCM
<spanstyle='line-height:150%;font-family:Georgia'>Ribeiro, J., P. Granjo, N. Leitão,and A. Harouna, 1993. Posições Face à Sindicalização, Desafios de Mudança.Lisbon: Edições Cosmos.
<spanstyle='line-height:150%;font-family:Georgia'>Rodrigues, H. Nascimento, 1996."Os Acordos de Concertação Social" in Barreto, Antonio. A SituaçãoSocial em Portugal 1960–1995, Lisbon: ICS.
<spanstyle='line-height:150%;font-family:Georgia'>Rodrigues, H. Nascimento, 2000. "Depoimento,"in Various Authors, A Reforma do Pacto Social. Lisbon: INCM.
<spanstyle='line-height:150%;font-family:Georgia'>Rodrigues Lopes, Ernâni, 1993."Concertação Social e Política Económica. O Caso Portugues 1974–1992,"in Conselho Económico e Social, Os Acordos de Concertação Social em Portugal.Lisbon:Conselho Económico e Social.
<spanlang=EN-GB style='line-height:150%;font-family:Georgia'>Royo, Sebastián, 2000. FromSocial Democracy to Neoliberalism. The Consequences of Party Hegemonyin Spain 1983–1996 . NewYork: St. Martin's Press.
<spanstyle='line-height:150%;font-family:Georgia'>Royo, Sebastián 2001. "Aindao Século do Corporativismo? – O Corporativismo na Europa Meridional. Espanha ePortugal numa Perspectiva Comparativa", in Análise Social. Lisbon:no. 158. June.
<spanlang=EN-US style='line-height:150%;font-family:Georgia'>Royo, Sebastiám, 2002, ANew Century of Corporatism? Spain and Portugal in Comparative Perspective.(Westport: Praeger).
<spanlang=EN-US style='line-height:150%;font-family:Georgia'>Royo, Sebastiám, 2002a.“A New Century of Corporatism? Spain and Portugal in ComparativePerspective," in West European politics. July Vol.25, No.3.
<spanlang=EN-US style='line-height:150%;font-family:Georgia'>Schmitter, Philippe C.,1974b. Corporatism and Public Policy in Authoritarian in Portugal. <spanstyle='line-height:150%;font-family:Georgia'>Beverly Hills, CA: SagePublications.
<spanstyle='line-height:150%;font-family:Georgia'>Soares, Maria Cândida, 1993."Os Acordos de Concertação Social e o Emprego," in Conselho Económicoe Social, Os Acordos de Concertação Social em Portugal. <spanlang=EN-US style='line-height:150%;font-family:Georgia'>Lisbon: ConselhoEconomico e Social.
<spanlang=EN-US style='line-height:150%;font-family:Georgia'>Stoleroff, Alan D.,1992. "Between Corporatism and Class Struggle. The Portuguese LabourMovement and the Cavaco Silva Governments," in West European Politics,vol. 15, no.4, pp. 118–50.
<spanstyle='line-height:150%;font-family:Georgia'>Stoleroff, Alan, 1995."Elementos do Padrao Emergente de Relações Industriais em Portugal,"in Organizações e Trabalho, no. 13. April.
<spanlang=EN-US style='line-height:150%;font-family:Georgia'>Stoleroff, Alan, 1999."Trade Unionism, Industrial Relations, Politics and the State in Portugal.Between Democratization and European Integration." Paper presented at theconference Contemporary Portugal. Reflecting on 25 Years of Democracy.Center for Portuguese Studies and Culture, University ofMassachusetts–Dartmouth. October 2–3.
<spanlang=EN-US style='line-height:150%;font-family:Georgia'>Stoleroff, Alan, 2000."Portugal. Union Development within the Changing Contexts of PoliticalEconomy and Industrial Relations," in Jeremy Waddington and ReinerHoffman, 2000. Trade Unions in Europe. Facing Challenges and Searching forSolutions.Brussels: ETUI.
<spanlang=EN-US style='line-height:150%;font-family:Georgia'>
<spanlang=EN-US style='line-height:150%;font-family:Georgia'>NOTES
<spanclass=MsoEndnoteReference><spanlang=EN-US style='font-size:9.0pt;font-family:Georgia;vertical-align:baseline'>[1] <spanlang=EN-US style='font-size:9.0pt;font-family:Georgia'>. A <spanlang=EN-US style='font-family:Georgia'>paradox, however, was that legal rulescovering temporary hiring were permissive. This allowed Portuguese employers tohire workers on a temporary basis and bypass the restrictions covering dismissalsand the high costs of severance pay. The result of this development has been<spanlang=EN-US style='font-family:Symbol'>¾as in Spain in the second half of the 1980s<spanlang=EN-US style='font-family:Symbol'>¾the increasing segmentation of the labor market anda sharp increase in temporary hiring.
<spanclass=MsoEndnoteReference>[2] <spanlang=EN-US style='font-family:Georgia'>. United union activism during the dictatorshipin had been facilitated by the common struggle for democracy. Unions pursueddifferent strategies. While the radical Left, the Communists, and the Catholiclabor movement sought to overcome the existing capitalist system, the SocialDemocrats supported a more reformist strategy. These contrasting politicalstrategies became critical during the transition and hindered unificationefforts. The struggles among labor activists were mirrored by partisanconflicts that split the unions movement into two groups, with Communist andnon-Communist currents. (see Naumann and Stoleroff 2000, 552<spanlang=EN-US style='font-family:Symbol'>-53).
<spanclass=MsoEndnoteReference>[3] <spanlang=EN-US style='font-family:Georgia'>. The Socialist and Social DemocraticParties had at that time very limited influence in the unions. The SocialistParty (PS) was founded in 1875, but it had virtually disappeared in the 1930s.The Popular Democratic Party was founded shortly after the fall of theauthoritarian regime. In contrast, the Communist Party had survived thedictatorship and had infiltrated the corporatist unions, which gave the Communistsleverage during the transition because the unions were at the forefront of theprocess (Barreto and Naumann 1998, 409).
<spanclass=MsoEndnoteReference>[4] <spanlang=EN-US style='font-family:Georgia'>. In Portugal, although formally onlypersonal ties exist between unions and parties, in reality union leaders andactivists are given political jobs and party responsibilities and arefrequently appointed to party executive bodies (although this is theoreticallyprohibited by union laws). For instance, during the 1980s between 5 and 9percent of MPs were UGT and Intersindical union officers or confederalleaders. Consequently, unions have functioned largely as vehicles of politicalinfluence. Some of the factors that explain the predominance of politicalaction in Portuguese trade unionism include the historical role of societal self-regulationcompared to statutory regulation, partisan control of the unions, unionsendemic weakness, and the tendency on the part of employers to rely on thegovernment to achieve its goals. The economic crisis of the 1980s reinforcedthese tendencies. The unions have used political action, including theorganization of a general strike in 1988, to defend the protective laborlegislation inherited from the revolution that protected union rights and jobsecurity (Barreto and Naumann 1998, 414).
<spanclass=MsoEndnoteReference>[5] <spanlang=EN-US style='font-family:Georgia'>. There are now more than 150independent unions, most of them small and occupational based (e.g., airlinepilots, train drivers, civil servants, and dockers). They operate as labormarket cartels or lobbying groups. Many of them are highly cohesive andeffective. These unions seek to defend the particular interests of theirconstituencies and to preserve their autonomy. They oppose solidaristicpolicies. They are deeply resented by UGT and CGTP, which view them asegocentric organizations that defend the privileges of certain groups (Barretoand Naumann 1998, 410).
<spanclass=MsoEndnoteReference>[6] <spanlang=EN-US style='font-family:Georgia'>. UGT with close links with Scandinavianand Central European unions, wanted to follow the organizational structure ofthe German or Austrian unions, characterized by a limited number of nationalindustrial unions. The opposition from existing unions (particularly thestronger ones in sectors such as banking, insurance, services, or education),which have defended traditional demarcations and mergers, has hindered plans toachieve the vertical integration of these unions. In addition, the nationalindustry-based UGT unions in sectors such as clothing, chemicals, textiles,metal, construction, and so forth, are weaker than the corresponding Intersindicalfederations (Barreto and Naumann 1998, 410).
<spanclass=MsoEndnoteReference>[7] <spanlang=EN-US style='font-family:Georgia'>. A group of independent unions, joinedin the Convention of Independent Unions, were founded by the labor wing of thePSD. They have not been able to challenge the dominant position of the majorconfederations and have low representativeness.
<spanclass=MsoEndnoteReference>[8] <spanlang=EN-US style='font-family:Georgia'>. For instance, an Intersindicalsurvey revealed that in 1993 about 60 percent of 1,076 registered commissionswere inactive (Barreto and Naumann 1998, 415).
<spanclass=MsoEndnoteReference>[9] <spanlang=EN-US style='font-family:Georgia'>. Public enterprises have agreed todeduct fees since 1977, but private firms and employers' associations have refusedto cooperate, hence, contributions are now mostly collected by unions (Barretoand Naumann 1998, 412).
<spanclass=MsoEndnoteReference>[10] <spanlang=EN-US style='font-family:Georgia'>. This problem is particularly acute insome economic sectors such as construction (where the estimated proportion ofinformal employment is 50%, and union density reaches barely 10%), clothing andfootwear industries, as well as certain services (Barreto and Naumann 1998,412).
<spanclass=MsoEndnoteReference>[11] <spanlang=EN-US style='font-family:Georgia'>. It is important to emphasize that dueto the lack of systematically collected data, it has been difficult to estimatethe exact number of union members. Unions are not particularly forthcomingeither about distributing this information. This has been a veryconfrontational topic among researchers in Portugal. See, among others,Cerdeira 1997; Stoleroff and Naumann 1993; Naumann and Stoleroff 2000.
<spanclass=MsoEndnoteReference><spanclass=MsoEndnoteReference>[12] <spanlang=EN-US style='font-family:Georgia;vertical-align:baseline'><spanclass=MsoEndnoteReference>[12]<spanlang=EN-US style='font-family:Georgia'>. In the banking sector services tounion members are well developed, collective bargaining and industrial disputesprocedures work very effectively, strikes are subject to ballots, and internalelection for unions governing bodies are well contested and have a highturnover (Barreto and Naumann 1998, 413).
<spanclass=MsoEndnoteReference>[13] <spanlang=EN-US style='font-family:Georgia'>. Small and medium-sized farmers aremainly organized by the CAN (the National Confederation of Farmers).
<spanclass=MsoEndnoteReference>[14] <spanlang=EN-US style='font-family:Georgia'>. This claim is disputed. Other scholars(Cardoso, Brito, and Mendes 1990) argue that new empirical evidence indicates a60 percent rate of affiliation. Unions for their part argue that employers'membership is even lower than unions'.
<spanclass=MsoEndnoteReference>[15] <spanlang=EN-US style='font-family:Georgia'>. A consequence of this development hasbeen that in Portugal actual wages generally exceed industry wage agreements, adevelopment that does not take place in Spain. In this country agreed-uponwages are binding for unskilled and semi-skilled workers (see Bover, GarcíaPerea, and Portugal 1997, 11).
<spanclass=MsoEndnoteReference>[16] <spanlang=EN-US style='font-family:Georgia'>. One of the key outcomes of the 2001 "Agreementon Workplace Working Conditions, Hygiene and Safety, and to Reduce WorkAccidents" will be that it will help clarify the actual representativenessof Portuguese unions. This pact renews the commitment (established in 1991) tocreate Work Place Committees for Health and Safety and establishes a six monthdeadline to develop the legal regulations for election procedures forrepresentatives of workers in these committees. These elections will clarifythe actual support of workers to individual unions.
<spanclass=MsoEndnoteReference>[17] <spanlang=EN-US style='font-family:Georgia'>. Although there are some legalrequirements, they are not enforced on the grounds that they may beunconstitutional (Barreto and Naumann 1998, 411).
<spanclass=MsoEndnoteReference>[18] <spanlang=EN-US style='font-family:Georgia'>. The government gives unions a small"allowance" for their participation in the CPCS (generally less than10% of their annual income). Declining membership has led to increasingfinancial difficulties, particularly now that aid from foreign union movementshas largely dried up. Confederations rely increasingly on the contributionsfrom a small number of unions and European state agencies. In 1990, forinstance, over 50 percent of UGT income came from just one of its then sixtyone affiliates, the Union of Banking Employees of Southern Portugal (Barretoand Naumann 1998, 412-<spanlang=EN-US style='font-family:Georgia'>15).
<spanclass=MsoEndnoteReference>[19] <spanlang=EN-US style='font-family:Georgia'>. As I indicated elsewhere (Royo 2000245-46), social concertation or concertation refers tocentralized agreements between leaders of unions and business associationspursuing shared macroeconomic objectives. Although this term is less common inthe United States, it is used by the neocorporatist literature both in WesternEurope, Latin America, and the United Kingdom. In these agreements unions arewilling to moderate and limit wage growth. Government's participation is notmandatory. These agreements are usually negotiated and signed by trade unionsand business organizations with centralized structures and hierarchical powersand are followed (and implemented) by the majority of business and workers.They cover incomes policies and industrial relation topics, as well as other issues<spanlang=EN-US style='font-family:Symbol'>¾that is, productivity, absenteeism, working hours,training, and so on. They also include provisions dealing with macroeconomicissues¾<spanlang=EN-US style='font-family:Georgia'>that is, redistribution, inflationtargets, competitiveness, and so on¾and institutionalissues¾<spanlang=EN-US style='font-family:Georgia'>that is, participation of the socialactors in economic policy making, participation in state institutions, and soon. SD governments have often participated in these agreements seeking tofulfill their economic objectives and have offered compensation<spanlang=EN-US style='font-family:Symbol'>¾such as, subsidies, increases in publicexpenditures, public jobs, fiscal benefits, and so on¾tothe social actors for their cooperation. In this book I shall refer to thesearrangements indistinctly as "social democratic corporatism,""social bargaining," "corporatism," "neocorporatism,"or "concertation." These definitions were explored in Schmitter1974a. In Spain, when writing in Spanish, some authors use corporativismoto refer to the "old" corporatism, and the neologism corporatismofor the "new" corporatism. See Martínez-Alier and Roca 1986a, 23<spanlang=EN-US style='font-family:Symbol'>-26. In Portugal they refer to this system ofinterest representation as corporativismo..
<spanclass=MsoEndnoteReference>[20] <spanlang=EN-US style='font-family:Georgia'>. In 1991 the social actors signed twocomplementary agreements regulating professional training, hygiene, andsecurity in the workplace.
<spanclass=MsoEndnoteReference>[21] <spanlang=EN-US style='font-family:Georgia'>. The Confederation of PortugueseIndustry (CIP), the Confederation of Portuguese Commerce (CCP), and theConfederation of Portuguese Agriculture (CAP). The Communist union (CGTP),which had refused to participate in the CPCS and pursued a strategy of strike politicisation,refused to participate in this agreement.
<spanclass=MsoEndnoteReference>[22] <spanlang=EN-US style='font-family:Georgia'>. The CGTP, demanding a 15 per centwage-increase and a minimum wage of 41,500 escudos, refused to sign theagreement, although its secretary general, Carvalho da Silva, insisted that‘positive things have been negotiated’ and agreed to take the agreement to theCGTP plenary for debate. The CAP also refused to sign this agreement. See A.Stoleroff, ‘Between Corporatism and Class Struggle: The Portuguese LabourMovement and the Cavaco Silva Governments’, West European Politics 15/4(Oct. 1992), pp. 118-150.
<spanclass=MsoEndnoteReference>[23] <spanlang=ES style='font-family:Georgia'>. See J. Da Silva Lópes, ‘El ConsejoEconómico y Social de Portugal’, in F. Durán López, (ed.), El Dialogo Socialy su Institucionalización en España e Iberoamérica (Madrid: CES 1999), pp.95-96.
<spanclass=MsoEndnoteReference>[24] <spanlang=EN-GB style='font-family:Georgia'>. Da Silva Lópes, ‘El Consejo Económicoy Social de Portugal’, p. 95. Fora more sceptical view of concertation’s effects see Stoleroff, ‘BetweenCorporatism and Class Struggle.’
<spanclass=MsoEndnoteReference><spanclass=MsoEndnoteReference>[25] . Other scholars have argued that the Spanish model seems to confirmthat a coalition of "intraregime softliners" and "extraregimesoftliners" results in a more conflictive model of industrial relationsthat diminishes the role of unions because they are not necessary for theconsolidation of that coalition's goals. In Portugal, in contrast,"extraregime softliners" played a central role in the democratizationprocess, and this resulted in a more inclusive system of industrial relations,because they needed labor to consolidate their program (Nataf 1995, 210).
<spanclass=MsoEndnoteReference>[26] <spanlang=EN-US style='font-family:Georgia'>. Hall and Soskice, Varieties ofCapitalism pp. 1-70.
<spanclass=MsoEndnoteReference>[27] <spanlang=EN-US style='font-family:Georgia'>. A. Hassell, and B. Ebbinghaus, ‘FromMeans to Ends. Linking Wage Moderation and Social Policy Reform’, in G.Fajertag and P. Pochet, (eds.), Social Pacts in Europe. New Dynamics(Brussels: ETUI 2000).
<spanclass=MsoEndnoteReference>[28] <spanlang=EN-US style='font-family:Georgia'>. T. Iversen, Contested EconomicInstitutions: The Politics of Macroeconomic and Wage-Bargaining in OrganisedCapitalism (New York: Cambridge University Press 1999).
<spanclass=MsoEndnoteReference><spanlang=EN-US style='font-size:10.0pt;font-family:Georgia;vertical-align:baseline'>[29] <spanlang=EN-US style='font-size:10.0pt;font-family:Georgia'>. Pérez ‘Yet theCentury?’, p. 22; and P. Hall, and R. Franzese, ‘Mixed Signals: Central BankIndependence, Co-ordinated Wage-Bargaining, and European Monetary Union’, in InternationalOrganisation, 52/ 3 (1998), pp. 505-535.
<spanclass=MsoEndnoteReference>[30] <spanlang=EN-US style='font-family:Georgia'>. ‘Towards a Euro Wage?’ by the U.K.research institute, Industrial Relations Services, suggests that the Euro willpush bargaining systems both ways, toward centralisation and decentralisation,depending on the regions, economic sectors, and firms. See Financial Times,October 13, 1998, p. 3. Sirkka Hamalainen from the European Central Bank'sexecutive board stated in a speech in London that labor flexibility hasimproved and wage settlements have become more moderate since the euro'sintroduction. She stated that "there is evidence of a very significantchange in labor market behavior in the euro area countries, particularly in thefiled of wage negotiations…discipline has greatly improved in that field, withwage demands apparently assuming a permanently lower level of inflation andadjusting faster to cyclical conditions that was the case prior to theintroduction of the euro." See 'ECB hails euro effects on labour markets,'in Financial Times, Tuesday February 26, 2002, p.4.
<spanlang=EN-US style='font-size:11.0pt;font-family:Georgia'>
