- What is a trade union?
Many workers do not negotiate their wages individually with their employers. The wages of many workers are decided by collective bargaining, or negotiations, between worker and employer representatives.
A trade union is an organization that represents the interests of workers in negotiations about improving wages and working conditions with employers and governments. Yes that’s right! What you thought was wrong. A trade union is not a formal body which looks after trade in a particular region such as the EU. It is an entirely different thing.
- Types of trade union
(i) General Unions: represent workers from many different occupations and industries. For example, the Transport and General Workers Union (TGWU) represents all sorts of clerical, manufacturing, transport and commercial workers.
(ii) Industrial Unions: represent workers in the same industry – For example, the communications workers union
(iii) Craft Unions: are often small and few in number today. They usually represent workers with the same skill across different industries. For e.g Amalgamated Engineers and Electrical Union (AEEU)
(iv) Non-manual unions and staff associations represent workers in professional and commercial jobs – for example, the National Union of Teachers.
- How can trade unions influence wages?
If a trade union wishes to raise the wages of its members, it must influence the supply and demand for labour ( check out lecture 18 a and b for supply and demand for labour.)
A trade union can try to raise their members wages by restricting the supply of labour to an occupation or place of work by :-
(a) negotiating a single union agreement with an employer. This means one union will represent all the workers in a particular place of work. Employers benefit by having to negotiate on wages and working conditions with only one union rather than many.
(b) restricting their membership to only those workers who have served long apprenticeships and undertaken a long period of training to develop their skills.
A trade union may also try raise wages by agreeing to improve productivity. The demand for their labour may increase if labour productivity rises.
- Industrial disputes
If a union demands a wage increase that is not matched by an increase in productivity, business costs will rise and profits will fall. Demands for reduced working hours, increased holiday entitlements, better pensions, healthcare and other benefits will also raise the cost of employing labour. For this reason disputes can occur between unions and employers.