Labor-Management Relations in the New Economy

This chapter reviews the growing literature on the linkages between labor-management relations and technological change in the new economy. The new economy is characterized by the rise of industrial robots, artificial intelligence, digital platforms and remote work, all of which reshape the world of work considerably. Results so far indicate that labor market institutions such as trade unions, works councils, collective bargaining systems as well as alternative forms of worker representation are of considerable importance for the way in which the benefits and costs of technological change are distributed among workers, firms and society. Evidence for Germany suggests that works councils may act as complements to automation by facilitating training, promoting the adoption of higher-quality technologies and protecting incumbent workers. Evidence for the United States, by contrast, points to net negative employment and wage effects of automation in the absence of strong institutional buffers. Furthermore, the chapter discusses why artificial intelligence and algorithmic management raise qualitatively new questions for labor relations, why generative artificial intelligence shifts automation exposure toward high-skill occupations which have historically been least organized, how platform work affects traditional employment relationships, and how remote work as well as the green transition generate new fields of labor activism. Comparative evidence from coordinated, liberal, East Asian and emerging economies finally shows that technological progress in itself does not determine outcomes. It is rather the institutional setting which decides whether the gains are shared broadly or accrue to a narrow group.