Why DO workers join trade unions?

Given how the media in the UK discusses trade unions, it is amazing that anybody actually joins them. They are presented as out of date, obstructive, selfish - a relic of the past. But it is a surprising fact that the TUC is the largest voluntary organisation in the country - much bigger than say, the National Trust. And more than 100,000 trade union members volunteer for unpaid roles within their unions to help members on issues such as health and safety, training, equality, grievance and discipline. That is the “big society” in action.

One obvious answer is that the trade unions secure a better income for their members; the trade union premium is round about 12%. In other words, if you are a trade union member you are likely to get 12% more pay than a non-trade union member in a comparable job.

I’ve been trying to find out whether this applies in other countries. Good data is hard to find but in Kenya the trade union premium is 11.7%.

The premium is much more significant in the USA. On average it is 27% (measured by median weekly earnings for full-time workers). But there are some very interesting variations. Some groups that are generally disadvantaged and discriminated against receive a higher trade union premium. For example, younger workers and women workers.

Black women get a trade union premium of 34%, and Hispanic women 44%. So if you’re an Hispanic woman in the USA, joining a union will increase your pay by nearly 50%.

Now the public image of trade unions is that they are led by older white men and this is probably largely true in the UK and in the USA. But this doesn’t seem to stop trade unions from effectively representing the disadvantaged groups.

In the UK, the TUC regularly surveys member unions to find out what they are doing on equality issues and how they are using collective bargaining to build on the legal minimum for maternity and paternity leave.

In 50% of cases, collective bargaining has improved on the legal floor for pregnant women workers. In 75% of cases, trade unions have got better paternity leave.

It’s obvious why workers want to join trade unions, despite their very poor public image. So it is rational behaviour by employers to try to prevent trade unions getting a foothold in their workplaces, surely?

No. It seems counterintuitive, but trade unions are good for business.

In previous blogs I've pointed out that a trade union presence can benefit a business. The most obvious impact is the reduction of turnover. Not only will workers stay if they receive better pay and benefits, a voice at work through their trade union means that if there is something they don’t like, they have a better chance of getting it fixed. Happier workers, lower staff turnover, lower recruitment and training costs; no loss production while new workers get up to speed.

Then there are the huge savings from lower accidents and ill health. Having a trade union on the premises reduces accidents by 50%. 

Trade unions = lower costs.

The short term view sees trade unions as leading to higher costs, so employers will resist them. Many commentators on what is called the Anglo-American model of capitalism have pointed out that short termism is one of its major drawbacks. Tracking the share price and chasing the dividend have led to too many bad business decisions.

Looks like putting up barriers to trade unions is another example of the short-term behaviour which in the long run makes a business, and the economy as a whole, weaker.