Not Much to Show for Smashing the Unions
Chote, Robert, The Independent (London, England)
IN 1979, the trade union movement stood condemned as the main agent of Britain's economic decline, guilty of fostering inefficient working practices and inflationary pay settlements. Fifteen years later, as last week's TUC conference showed, the movement is a shadow of its former self. But where is the evidence that the economy has benefited as a result?
The humbling of the unions has been more dramatic than even the most hardened free-marketeer could have wished. Membership has dropped from nearly 13.3 million in 1979 to around 7.2 million in 1994. This has cut the proportion of the workforce with union membership from more than half to barely a third. Collective bargaining over pay and conditions now takes place in only a minority of workplaces, compared to nearly three-quarters in the mid-1970s.
Several factors explain this decline. Some economists blame it entirely on higher unemployment. Rising joblessness has certainly done the unions no favours, but remember that their membership continued to drop even when unemployment was falling fast.
The changing composition of the workforce may be more important. Unions have never been good at recruiting women, part-timers, non-manual workers and people in service industries. All these groups have been growing at the expense of the unions' traditionally male and blue-collar constituency. The unions have reacted defensively, pursuing mergers rather than boosting aggregate membership.
But the Government's step-by- step legislative attack on the unions is surely the most important cause of their emasculation. Statutory procedures for union recognition have been abolished, picketing limited, the closed shop outlawed, legal immunities weakened and pre-strike ballots enforced. It is hardly surprising that strike activity has fallen to record lows. Having said this, the number of "grievances" notified to Acas, the arbitration service, is little changed from the late 1970s. This suggests the strike figures overstate the improvement in the climate of industrial relations. They may simply reflect the unions' more limited room for manoeuvre.
The combination of adverse legislation and an unfavourable economic tide has tipped the balance of power away from the unions and towards management. As a result, unions have found it increasingly difficult to deliver the goods. In 1984, semi-skilled employees in a unionised workplace earned 8 per cent more than their non-unionised counterparts. By 1990, this mark-up had dropped to 6 per cent and has presumably shrunk even further since then.
This mark-up disappears entirely in companies which operate in highly competitive markets. Only when firms have a significant degree of monopoly power do they have sufficient "excess" revenue over which the union and management can meaningfully bargain. This suggests the fall in the union mark-up during the 1980s can be explained in part by the increasing integration of the European economy, which has exposed more companies to competition from overseas rivals. At the same time government subsidies have been withdrawn from many monopolistic, highly unionised industries.
Falling union membership and the growing inability of unions to secure higher pay for their members have certainly helped contribute to the dramatic growth in inequality in Britain during the past 15 years. One study argued that declining unionisation explained a fifth of the rise in semi-skilled wage inequality during the 1980s.
But the evidence that the decline of the unions has boosted employment and other measures of economic performance is much less clear cut. Professors …
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Publication information: Article title: Not Much to Show for Smashing the Unions. Contributors: Chote, Robert - Author. Newspaper title: The Independent (London, England). Publication date: September 11, 1994. Page number: Not available. © 2009 The Independent - London. Provided by ProQuest LLC. All Rights Reserved.