Trade Union

A trade union is an association which represents the interest of a group of workers

Trade unions are associations of workers formed to represent their interests and improve their pay and working conditions

There are 4 main types:

  1. Craft unions: these represent workers with particular skills e.g. plumbers. These workers may be employed in a number of industries
  2. General unions: these unions include workers with a range of skills from a range of industries
  3. Industrial unions: these seek to represent all the workers of a particular industry, e.g. rail industry
  4. White collar unions: these unions represent particular professions including pilots and teachers

Unions in a country often belong to a national union organization

The role of trade unions

  • They negotiate on behalf of their members on wages, job security, working hours and conditions
  • These areas can include basic pay, overtime payments, maternity and paternity rights and job security
  • Unions try to protect or improve workers’ rights

Collective bargaining

-representatives of workers, negotiating with employers’ associations

-workers tend to have limited bargaining powers. If she/he presses for a rise (or something), the employer may dismiss her/him and take someone as a replacement

-trade unions enable workers to press their claims through collective bargaining

The basic wage claims

-there are a number of arguments a trade union can put forward while asking for a wage rise

-workers deserve to be paid more as they have been working harder and have increased productivity

-if the industry’s profit has risen, they can afford to pay higher wages

-3rd argument is known as comparability argument. A union may argue that workers pay rise should align with a similar worker. e.g. if a doctors pay has increased then the nurses pay should also increase in that hospital too

-workers wage rise need to meet the increased cost of living. If the price level is rising by 6% then the workers wages should increase by 6% at least. This is sometimes referred to as maintain their real income (income adjusted for inflation)

Factors affecting the strength of a trade union

-A high level of economic activity: if output and income in a country are increasing, most industries are likely to be doing well, and so should be able to improve the pay and conditions of workers. When output reaches high levels and most people who want to work are employed, firms will be competing for workers. To retain their existing workers and recruit more workers, firms are likely to be more willing to agree to union requests for higher pay and better working conditions

-A high level of workers: more members a union has, the more funds it is likely to have finance its activities. Employees will find it hard to replace union labour by non-union labour

-A high level of skill: unions representing skilled workers are relatively strong position and it would be hard for employers to replace them

-A consistent demand for the products produced by the workers

-Favourable government legislation: a union will be in a stronger position if laws allow trade unions to take industrial action.

Industrial action: when workers disrupt production to put pressure on employers to agree to their demands

-industrial action can be initiated by a union in support of its claim, like,

– overtime ban with workers refusing to work longer than contracted hours

-‘work to role’ where workers undertaking tasks required by their contractors ONLY

Most well known form of industrial action is strike

strike: a group of workers stopping work to put pressure on an employer to agree to their demands

Strike action can be measured in three main ways

  1. Number of strikes
  2. Number of workers involved
  3. The number of working days cost

The last measure gives a clear indication of the impact of the strike on the economy

-governments often try to prevent strikes by encouraging unions and employers representatives to go to arbitration, in case negotiations break down, it’s the involvement of a third party seeking to reach an agreement

Advantages and disadvantages of trade union membership

Firms and workers- firms can be harmed by industrial action taken by trade unions. The amount of revenue lost by strikes and damage done to the reputation of a particular firm by strike will be influenced by the effect on rival firms and the length of the strike

Trade unions can provide benefits to the firms. It takes less time and its cheaper to negotiate with workers as a group than individual workers

Unions provide a channel of communication between employers and workers

Trade unions and the government

  • The role of trade unions varies around the world and in some countries it can be illegal. In other countries, government intervention can reduce the effectiveness of the trade unions
  • Government can also ban any strike that can cause serious hardship for the community


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