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P. 21. The determination of wages&Trade Unions, p. 296.

Trade union functions

1.    Collective Bargaining

Aim to raise wages. Economic factors affecting:
a.     The elasticity of the final product
b.     The proportion of labour costs to total
c.     The ease of factor substitution
d.     Level of profits
e.     Macroeconomic influences

      State of the economy (economic growth - wage rises easier)


2.    Political action to enforce laws (young employment, elderly, safety)

3.    Union markup 10%

Labour relations in the UK.

1/2 in 1970, 1/3 now belong to unions. No. of strikes and belonging to unions has fallen significantly after 1980. Majority of strikes is for higher wages. Sympathetic strikes (support other unions, illegal) and political strikes are rare in UK. 1975Employment protection act favoured unions, union density up to 55%.

Since conserv.

1.     Employment act 1980 outlawed secondary picketing

2.     Trade union act1984 PRESTRIKE BALLOT(employer makes a better offer after ballot), 5year representative ballot.

3.     Restrictive labour practices - closed shop, now unlawful.

4.    1970-4 2900, 1990-3 350stoppages/year. 14m,<1m days lost

5.     New workplaces have no unions and old close down.

6.     Main reasons were economic-restructuring of economy+unemployment.

Effects to productivity, controversial


Union supports management efficiency

Encourages cooperation

Improving communications by collective voice


No techics

No organisational change

Wrong working rules


Demarcation(ships)-maintain demand for labour

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