Why trade unions are a good thing

Why trade unions are a good thing

ETI is not just a British idea you know. It has spread. I was in Norway a few weeks ago, doing some training for the Norwegian ETI. It was a special version of our course on Worker Voice and Freedom of Association.

Apart from the eye watering prices for beer, I had a really good time. 

The punters on the course were all from companies and what they wanted to know was why trade unions are a good thing for business.  So I have decided to put the arguments together in one place. Here goes.

Trade unions reduce inequality

We are all against inequality, right? The usual suggestions for improving the quality of things like removing glass ceilings, or helping women entrepreneurs.  Nothing wrong with that, but if you really want to reduce inequality at work, get a trade union.

For example, nearly half of UK trade unions have reported negotiating better terms for flexible working hours than the law allows (See the TUC's equality audit, and this ILO blog on equality and collective bargaining.)

Through collective bargaining and union membership, disadvantage workers get a substantial pay premium. In the USA, black women get a trade union pay premium of 34% more than their non-unionised sisters. For Hispanic women workers, this rises to 44%. So if you’re an Hispanic woman in the USA, joining a union will increase your pay by nearly 50%

Trade unions increase training in the workplace

The UK has one of the worst records in the European Union for workplace training, which is bad for companies and bad for the economy as a whole. A study in Scotland showed that over half of employees in unionised workplaces believe that they would be more likely to undertake learning if it was organised through a union. And where unions are recognised and negotiate over training, employees are 24 per cent more likely to report receiving training at work.

Trade unions improve well-being in the workplace

There is now a huge industry around wellbeing at work.  All kinds of nonsense is being sold to gullible companies. They can save their money. A trade union organiser will come in for free.

Having a union representative in the workplace can reduce employees’ stress levels, improve their work-life balance, and increase their wellbeing overall, according to academic research. The survey found that workers’ perceptions of job quality were more favourable in organisations where an onsite representative was present.

This is important for employers across all sectors, the report said, as higher job quality can lead to higher productivity, and fewer workers quitting their jobs.

Trade unions reduce child poverty and promote social mobility

Areas with higher union membership demonstrate better results for children from low-income families, resulting in more social mobility. The researchers found that a 10% increase in union density is associated with a 4.5 percent increase in the income of an area’s children.

Trade unions are good for the economy

The decline in union density in the UK, from its peak in 1975 to today has reduced wages significantly.  The share of national income going to wages declined from its 1975 peak of 76% to an historic low of 67% today. This has led directly to a loss of GDP. Restoring union density to the levels seen in the early 1980s would, thanks to the impact on the wage share, add £27.2 billion to UK GDP.

That’s right. Helping unions to organise would give a boost to the British economy of nearly £30 billion.

Trade unions reduce accidents

The Olympic Games held in London in 2012 were the first Olympic Games when nobody was killed constructing the venues. That’s because right from the very beginning, trade unions were involved in dialogue with the Olympic Delivery Authority and the London Organising Committee. The next best games from the safety point of view was Sydney, where only one worker was killed. That also had very high level involvement by the trade unions. In contrast, Athens killed 40 construction workers, the Sochi Winter Olympic Games killed 60. The prognosis for worker safety as Qatar prepares for the 2022 World Cup looks bleak.

Canadian research on insurance claims from building sites found a link between unionisation and better safety. To quote the researchers: “The lower rates of lost-time claims might also suggest that unionized workplaces are safer”

Trade unions are good for the environment

The Trade union Congress has supported setting up a new kind of workers representative in companies: the environmental representative.  Case studies of six companies in the UK found that these trade union representatives had contributed to: a fall in CO2 emissions per employee by 54.8%; nitrous oxide levels falling by an average of 10% over a four-year period and fall of 80% in sulphur dioxide levels. 

Trade union members are more loyal

This is controversial, and seems counter intuitive. There is a substantial literature around Albert Hirschman’s classic 1970 book on voice or exit. His theory was: if you are unhappy in an organisation and you cannot change it you leave, or absenteeism rises.  He originally wrote this about consumer choice.

Many academics have researched to see if this applies to trade unions and the workplace. If you can improve things through a voice, then you stay. The classic study is by Freeman. Freeman concluded that the voice or exit hypothesis does apply to the workplace. Where workers do have an effective voice and can change things, like health and safety, improving the behaviour of their supervisor, then they are more likely to stay. This has benefits for the business.

Freeman is sometimes seen as being too pro-trade union, so there is another discussion here

These two scholars conclude: “The results suggest that there is a positive influence of collective agreements at firm level on absenteeism.” In other words, union members take less time off.

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Convinced? Want to find out more? You can enjoy the whole course in London. No need to go to Oslo and spend £10 on a beer.

The course is running again on 25 November. Sign up here


ETI's blog covers issues at the intersection of business, news and ethical trade. We welcome a range of insights and opinions from our guest bloggers, though don't necessarily agree with everything they say.