Organized Labor and Restructuring : Coal Mines in the Czech Republic and Romania

We conduct a case study of the role of organized labor in the restructuring experience of two coal mining regions in the 1990's: Ostrava in the Czech Republic and Jiu Valley in Romania. Under similar external circumstances, the Ostrava region undertook gradual restructuring from early on whereas in Jiu Valley there was no restructuring until 1997, followed by massive layoffs over two years. Our quantitative exercise shows that the delay in restructuring in Jiu Valley was grossly inefficient in view of the region's overall restructuring path and in comparison to Ostrava's path. The proximate reason for the delay was the Jiu Valley miners' action against restructuring. Essential for the miners' success was their alliance with the conservative faction of the government; the alliance itself was arbitrated by the Romanian electorate. We interpret the Jiu Valley miners' militancy as behaviorally conditioned rather than rationally determined, which accords with their history of militancy in contrast to the absence of militancy among Ostravian miners