The attitude of employers towards unions is an ambiguous explanation for their decline. It is questionable whether employers became more hostile towards unions in the 1980’s and 1990’s. Evidence to prove this theory is difficult to gather as unionised workplaces faced closures as much as non-unionised firms in this recessionary period. Reported hostility amongst the media would account for the bitterness that union’s disputes generated, particularly the political sourness that followed the Winter of Discontent in 1979. The ‘inability for unions to achieve recognition in newer workplaces’ (Metcalf, 2005) is, however, an accurate justification for union’s continued slump in membership levels. Both attitudes and compositional factors are negligible explanations for decline in membership although they could imply a more harmonised working environment.
The most apparent reasons for the decline in collective industrial action in the last 20 years relate largely to costs and benefits to the individual. Firstly, there is an increased opportunity cost to striking because of pleasing real wage growth since the 1980’s. Previously, only small gains from striking could be achieved, unless individuals were fortunate to hold the Marshallian conditions. Buoyant real wage growth has been further backed by the introduction of the Minimum Wage where low earning individuals are also subject to strong wage growth. This makes the role of trade unions redundant even for the low paid (often manual, unskilled workers; a group that particularly benefited from the backing of a union in the 1979’s and 1980’s, i.e. coal workers). Machin (2001) is revealing in his findings, stating that “For men it used to pay to be in a union in the early 1990’s, and it used to pay to join a union, but by the end of the 1990’s it does not. For women…it does pay to be in a union, but not by as much as it used to, and it does not pay to newly join”. The opportunity cost of withdrawing cooperation is calculated to be an expensive and often unnecessary mistake.
The increased cost in organising stoppages due to new legislation such as 1980 Picketing Act and the implementation of Secret Postal Balloting in 1993 has made union processes expensive and provided many administrative, as well as legal, barriers when complying with the law. The tightening up of the law has reformed the actions of trade unions and again decreased their involvement in industrial matters. A legislation index calculated by Freeman and Pelletier (1990) suggested that the changes in the law were “responsible for the entire decline” in union membership density levels. Conversely, individual rights in the workplace have heightened, the individual voice being given more notice and the right of appeal encouraged. The law has undermined collectivism - possibly the greatest reason for the demise of unionism. Lastly, the rate of return to striking is insignificant. Industrial disruption demands immediate returns to the individual, but nowadays strike action involves a high rate of discount. This realisation makes strikes less favourable, especially when equal settlements are achieved without strike action. Drinkwater and Ingram (2005), used evidence from the CBI Pay Settlements Survey to illustrate that the most relevant reason for industrial halts is due to factors concerning a request for an increase in pay. However, it was proven that unlike the 1980’s, the average return to strike action since 1989 is negligible.
Pay settlements with and without strikes in manufacturing
Source : Ingram & Drinkwater (2000), Updated figures from CBI Pay Settlements Survey
As the custom of striking and the sense of belonging to a union falls, individuals with grievances have found alternative measures of expressing workplace discontent, even when trade unions are unavailable to articulate their individual problems. Individuals tend to move away from collective grievances to substitutes which are more rewarding to the worker and not subject to any legal restrictions. Employment tribunals and individual ACAS cases (Advisory, Conciliation and Arbitration Service) have shown an increase since the late 1980’s. Even in the last 5 years, tribunal applications have increased by almost 90% (ETS, Annual Report, 2004). This suggests that individual conflicts have replaced the earlier collective disruption.
Applications Registered by employment tribunals:
Source: Employment Tribunals Service, Annual Report, 2003-2004
Other unofficial forms of disruption occur instead of the formal actions that a trade union promotes such as strikes, go-slows, overtime bans and work-to-rule.
Does this necessarily mean that industrial relations have improved? Individual discontent must be recognised in many small, yet costly ways. Without the presence of a trade unions, employees are more likely to feel like ‘a small fish in a big pond’ and so will exercise their problems by leaving their job, lowering average job tenure and increasing labour turnover rates costing the firm in replacement labour and training. Employees will show their unhappiness by neglectful attitudes at work, by disrupting the flow of work or through low productivity as a consequence of low morale and dissatisfaction. The firm suffers with absenteeism in the form of unregistered or uncertified sickness. According to the Confederation of British Industry (CBI), (2005), the cost of sickness for UK businesses in 2002 was aggregated to be at least £11.6 billion. These circumstances are easy to ignore or be overlooked by employers but all are very expensive to the firm and a detrimental way of relieving grievances. Particularly so, as their gripes are often unheard and so are never given the opportunity to resolve. Firms may have appearance of satisfied employees because of no ‘loud’ group action, but this is not always a true reflection on the general feeling of industrial relations. It would appear that the impact of fewer collective strikes under the umbrella of the trade union is offset by individual grievances and disruptions.
In conclusion, it is likely that discontent within industries will be present even without the confidence of guaranteed support from a union. Unions are considered unwelcome and unnecessary by many employers and employees. The era of militancy seems to be over but it is an impossibility to keep all British the workers happy. The rising occurrence of tribunals and ACAS cases are perhaps illustrating the increasing difficulties unions have in expressing the views of the workforce due to legal and administrative restrictions imposed. Individuals have at their disposal alternative options which they can pursue leading to more lucrative rewards, and because of the currently booming economy that has not encountered a severe recession in the last decades, there is more likely to be a disregard for a collective bargaining tool that battles for positive real wage growth; this is already present. Industry composition factors and attitudes against unions make union membership far less appealing and not as essential as was evident in previous decades. Finally, it is understood that discord in the workplace is an inevitability, but is not clear as to the extent to which declining membership levels can be directly correlated to more harmonised relations in the workforce.
WORD COUNT: 1366
References
Books
Borjas, G. J. (2004), Labour Economics, 3rd Edition, McGraw-Hill
Hamermesh, D., Rees, A. (1988), The Economics of Work and Pay, 4th Edition, Harper & Row
Websites
Journals
Brook, K (2001), “Trade Union Membership: an analysis of data from the autumn 2001 LFS”, Labour Market Trends, July 2002, pp 343-352
Freeman, R. & Pelletier, J. (1991), “The Impact of Industrial Relations Legislation on British Union Density” British Journal of Industrial Relations,
Machin, S. (2000), “Union Decline in Britain”, British Journal of Industrial Relations, Vol 38, no. 4, pp 631-645
Papers & Publications
Drinkwater, S. & Ingram, P. K (2003), “From Collective Disputes to Individual Grievances”, www.econ.surrey.ac.uk/people/teachings/
Machin, S. (2001) “Does it Still Pay to be in or Join a Union?”, Centre for Economic Performance, London School of Economics
Metcalf, D., “British Unions: Resurgence or Perdition?”, The Work Foundation, Provocation Series
