19. Trade Unions
A trade union is an organization formed by workers to safeguard their rights and improve working conditions. Types include craft, industrial, general, and white-collar unions. Their functions involve negotiating better wages, job security, benefits, and fair treatment. Through collective bargaining, unions negotiate with employers, especially in monopsony markets. They may use industrial action like strikes and go-slows to press demands. Wage claims are based on productivity, profitability, comparability, and cost of living. Union strength depends on membership size, skill level, economic conditions, and legislation. Governments may support or restrict union powers, and unions often influence labor laws and policies.
What is a Trade Union?
A trade union is an organization formed by workers to protect their rights and interests. It acts as a collective voice for its members in dealing with employers about wages, working hours, job security, and workplace conditions.
Types of Trade Unions
- Craft Unions – Represent workers with a specific skill or trade (e.g., electricians, plumbers).
- Industrial Unions – Represent all workers in a particular industry, regardless of their job (e.g., steel or automobile industries).
- General Unions – Open to workers from different industries and occupations.
- White-collar Unions – Represent non-manual, professional or administrative workers.
Functions and Objectives
Trade unions aim to:
- Negotiate higher wages for members.
- Improve workplace conditions (safety, sanitation, hours).
- Prevent job loss and promote job security.
- Secure additional benefits like paid leave, pensions, and health insurance.
- Protect against unfair dismissal or discrimination.
- Maintain wage differentials to reward skills and experience.
- Ensure a fair grievance redressal mechanism.
Key Concepts
Collective Bargaining
- A process where union representatives negotiate with employers to set employment terms.
- Involves discussions about pay, hours, leave, safety, etc.
Monopsony Power
- A market situation where one employer dominates hiring.
- Leads to suppressed wages.
- Trade unions counter this by increasing workers’ bargaining power.
Industrial Action
1. Methods unions use to pressure employers, including:
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- Strikes (complete work stoppage)
- Work-to-rule (doing only what’s in the job description)
- Go-slow (deliberate reduction in work pace)
- Picketing (protests at the workplace)
Wage Claim Arguments
- Productivity Argument – Workers should be paid more if they produce more.
- Profitability Argument – If a firm’s profits increase, workers deserve a share.
- Comparability Argument – Wages should align with those in similar roles elsewhere.
- Cost of Living Argument – Wages must keep up with inflation to maintain purchasing power.
Strength of Trade Unions – Influencing Factors
- Economic Activity – Stronger during booms; weaker in recessions.
- Size of Membership – More members = greater influence.
- Skill Level of Workers – High-skill workers are harder to replace, so stronger leverage.
- Demand for Product – If demand is constant, employers can’t afford disruption.
- Government Legislation – Laws can either protect or weaken union power.
Union Strategies to Enforce Compliance
- Closed Shops – Only union members can be employed.
- High Entry Standards – Limit new workers by setting skill/qualification barriers.
- Threat of Industrial Action – Used as leverage in negotiations.
Trade Unions and the Government
1. The government may:
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- Support unions through pro-labor laws (e.g., minimum wage, workplace safety).
- Limit union power through anti-strike regulations, banning closed shops, or encouraging individual contracts.
2. Trade unions often influence public policy and political movements.
Functions of Trade Unions
Trade unions aim to improve wages, working conditions, job security, and protect workers from unfair dismissal. They also negotiate for benefits like pensions, paid leave, and fair grievance handling.
Collective Bargaining & Industrial Action
Collective bargaining is negotiation between trade unions and employers. If talks fail, unions may use industrial actions such as strikes, go-slow tactics, or work-to-rule to press for demands.
Wage Claim Arguments
Trade unions justify wage increases using: 1. Increased worker productivity 2. Company profitability 3. Comparison with similar jobs 4. Cost of living adjustments (real income maintenance)