Contents

Summary

• Recent long-running and disruptive strike action has revived interest in a trade union movement which has been in long-term decline.


• Economists have always been in two minds about unions, seeing them as a possible countervailing power to over-powerful employers but also potentially using monopoly powers to distort labour markets.


• British trade unions have a long history; for many years their legal status was shaky and it was not until 1871 that members were free from the possibility of criminal prosecution and 1906 before union funds were safe from claims for damages for strike action.


• In the twentieth century two world wars led to the role of unions being enhanced and after the second war becoming an increasingly accepted part of the economic and political establishment.


• The post-war years, however, led to an arguably excessive growth in union power and influence that created problems for the UK economy and sometimes involved an unacceptable degree of coercion and disorder.


• Successive governments in the 1960s and 1970s attempted unsuccessfully to reform industrial relations, with widespread strike action in the late 1970s culminating in the Winter of Discontent.


• Under Margaret Thatcher and John Major, militant trade unions were taken on and successive pieces of legislation clipped back their ability to disrupt the economy.


• Since then, there has been a long period of decline in union membership and the coverage of collective bargaining. This is not, however, unique to the UK, suggesting ‘anti-union’ legislation cannot be the only explanation.


• Today’s union membership is very different from that in the past, with women now outnumbering men and with concentrations of union strength among well-qualified employees in the public sector or privatised industries which were once nationalised.


• Union membership still carries a wage premium and members also enjoy other employment advantages, but these advantages have been declining as across-the-board employment regulation has proliferated, supporting non-union as well as union workers.


• Unionised businesses display slow productivity growth and employment in non-unionised businesses grows faster.


• Strikes are now concentrated in the public sector, and they are aimed at inconveniencing the public in the belief that this is the best way to pressure governments to concede improvements in pay and conditions.


• There is unlikely to be a spontaneous revival in union membership, and attempts by government to encourage such a revival are not an effective vehicle for pursuing ‘economic justice’.


• While unions have a legitimate role in the economy and civil society, serious disruptions to parts of the public sector where the citizen has no effective choice and where there is potential damage to health, safety and important government functions, may call for some restrictions.


• Governments in other comparable countries make use of compulsory arbitration and strike bans in some important public services. If we were to see a return to continuing costly disruption on the lines of the 1970s, these options might have to be explored even by a Labour government.

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