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

Trade union functions

1.    Collective Bargaining

Aim to raise wages=MPPxMR. 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%

4.    restricts apprentices

5.    closed shop illegal

6.    equality

Labour relations in the UK.

1/2(13m) in 1970, 1/3(9.5m) now belong to unions

No. of strikes and belonging to unions has fallen significantly after 1980(coz supply side)

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%, now45%

Regional policy-Cumulative decline - history of trade unions discourages new firms to enter

UK hasn't done as well as other West-European countries coz unions

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 and unemployment.

7.     pay inequality rose(1/5 income10%in79, 6%in92, richest35%79, 43%92, female75%88, 80%94, av.wages2.7x80in94)

8.     more flexible markets(inequality and many lowpaid parttime jobs)

a.     numerical-atypical cheap labour, effective plant operation(24h), stress, high turnover, unmotivated, lot in UK

b.     functional-adopts to demand, range of products with same workforce, investment in human capital, high wage, core labour, good when demand stable

9.     wage councils abolished

10.   public sector pay frozen

Effects to productivity, controversial


1.     Union supports management efficiency

2.     Encourages cooperation

3.     Improving communications by collective voice


1.     No techics

2.     No organisational change

3.     Wrong working rules

4.     Overstaffing

5.     Demarcation(ships)-maintain demand for labour

Why membership declined

1.     Recession and unemployment fear factor

2.     rising real wages and low inflation

3.     antiunion legislation(supply-side)

4.     younger workforce

5.     less co.s recognise unions(success rate)(manufacture declines, firms that recognised haven't closed, new firms dont recognise-aggressive management)

6.     more private sector

7.     competition, IT

8.     contracting-out of manual services in public co.

9.     high among teacher

10.   many co. birth

11.   part-time work


1.     craft-similar job(NGA)

2.     industrial union-open to all in industry(NUM)

3.     general-all unskilled(TGWU)

4.     white collar(NUteachers)

5.     TUC-trade union congress(general represen)
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