Chapter 20: Trade Unions

Types of Trade Unions

· Craft Unions – Workers with particular skills. These

workers may be employed into a number of industries.
Eg: Plumbers and weavers

· General Unions- Workers with a range of skills and

from a range of industries.

· Industrial Unions- Represent all workers in a

particular industry. Eg: Those in a rail industry

· White collar Unions- Represent particular

professions for example: pilots and teachers.

Unions in a country often belong to a national union

organization. For example: In India a number of unions
belong to the AITUC.

Some also belong to the international trade union

organization such as International Confederation Of Free
Trade Unions

Definition- An association that represents the interests of

a group of workers.
Role of Trade Unions

· Negotiate on behalf of the members on pay scales,

working hours and working conditions. Eg: basic pay,
overtime pay, health safety, promotion prospects.

· Protect or improve workers’ rights

· Provide information on a range of issues for their

members. Eg: Pensions

· Help with education and training schemes

· Participate in measures designed to increase

demand for the product, thus increasing the demand for
labour.

· Provide range of benefits to their members

including strike pay, sickness pay and unemployment pay

· May pressurize govt. to adopt a legislation- which

will benefit workers by fixing a national minimum wage.

Collective Bargaining

An individual worker may not have the time or skill or

willingness to negotiate with his or her employer. A
worker will also have a limited bargaining power. The
employer may dismiss an individual worker and replace
him if he asks for a higher wage.

Unions however enable workers to press their claims

through collective bargaining. This incolves negotiations
between the union officials, representative of a group of
workers and representative of a group of employees.

Collective Bargaining: Representatives of workers

negotiating with employers’ associations.

Basis Of Wage Claims

· Workers need a wage raise because:

· because they have been working hard and
have increased productivity.
· The industry is making more profits and
workers have been linked to those profits
· Comparability argument- The workers it hires
should receive a pay rise in order to keep their pay IN
LINE (not the same) as similar workers. Eg: If doctors
get a pay raise, then the union of nurses will demand
a higher pay as well.
· Meet their cost of living

Factors affecting the strength of the union

· Factors affecting the strength of the economic
activity- If output and input in the country are the
increasing, industries will be doing well. When output
reaches high levels and those want to work are already
employed firms will be competing for workers. To retain
existing workers and to hire more workers, firms will
agree to union requests and pay higher wages and allow
better working conditions.

· A high number of members- The more number

of members a union has: the more funds it is likely
to have to finance its activities and the harder it is to
replace the union labour with the non-union labour.
· A high level of skill- Unions representing skilled
workers are in a stronger position as it can be
difficult to replace those workers
· A consistent demand for the product produced
by the workers. Unions that represent workers make
goods and services that are essential to consumers
are in a strong position to bargain.

Industrial Action

· Workers may refuse to work overtime

· Workers may undertake the tasks required by
the contracts only.
· They can strike- Official strike- Strike
 approved by union. Unofficial strike- One that the
union does not agree with, or is over before the
union has time to approve it.
· Strike action can be measured by: No. of
strikes, numbers of workers involved and number of
working days lost.

Question: Why do govt.s try to prevent strikes.?

They do this by asking unions and employers to go into

arbitration, in case negotiations don’t work.

Inluence on the supply of labour

· Unions can raise the workers’ wages by restricting

the entry of workers into the industry by either insisting
that the workers have high qualifications or by
maintaining a closed shop- Firms are not allowed to
emply non-union workers.

Trade unions, Firms and Workers

Firms can be harmed if industrial action is taken against

them. A firm’s costs and flexibility will also be affected by
overtime bans and a ‘work to rule action.’(Doing only
what is required and nothing more.)
Unions also do benefits to firms. The firms will have to
negotiate with the union and not every individual worker.
Unions also encourage workers to gain education and
pursue training, which promotes health and safety and
raises productivity.

Unions also benefit non-union members too as they also

receive the high wages.

Disadvantages of unions- They can make people lose

jobs. They can restrict the entry of workers into the
company. They can get all the workers kicked out.

Unions around the world-

High union power in European Countries- The public

supports things like strikes

Some countries ban trade unions

Managers threaten the workers that they will close down

the factory if they form unions.