3.4 - Trade Unions Flashcards
What are the interests of workers?
The interests of the worker include
Wage & non-wage benefits of employment
Health & safety in the working environment
What is a trade union?
A trade union is an organisation that represents the interests of its workers in negotiations with a firm’s management or owners
What are the different types of trade unions?
General union - These represent the skilled and unskilled workers in any industry
Industrial union - These represent workers in the same industry. Anyone in industry can join, irrespective of skill level or seniority
Craft union - These represent skilled workers with specific trade
White collar union - These represent professional office based workers
Why do people g to work?
To go on holiday
discounts earn experience for another job
enjoy working
job security
to earn income to pay for necessities food mortgages bills
working conditions
bonuses benefit
commission discounts
What is a wage factor?
The pay on offer that influences what job a person decides to do
What is a non wage factors?
The factors other than ways or money that influences a person decision on a job
What determines the wage rate?
Demand for labour: Those workers who employers are willing and able to purchase labour.
Supply of labour: Those who are willing and able to supply their labour for a given wage
Productivity of workers
Labour costs as a percentage of a total costs.
Labour is a derived demand meaning that it depends on the demand for the product they are producing
What are wage differention?
Difference in wage rates
What are the benefit of trade unions?
Collective bargaining
Job-specific training
Legal representation in disputes
Discounts on a wide range of goods/services
What do trade unions do?
Collective bargaining: Representatives of workers negotiating with employees associations provide information via training and education benefits to workers including strike pay legal advice pressure on the government to adopt legal legislation beneficial to workers. Negotiates for acceptable wage levels - often well above the minimum wage
Industrial action: When workers disrupt production to put pressure on employers to agree to their demands such as strikes
Protecting the employment of their workers: Negotiates for the retention & redeployment of workers when machinery (capital) replaces labour Negotiates resettlement packages when firms relocate from one region to another & redundancy terms for those unable to relocate
What factors can influence the strength of trade unions?
The higher the percentage of workers from a firm that belong to a trade union, the greater the collective bargaining power of that union with the employer
The unemployment level - the higher the unemployment level the weaker the bargaining power as firms can more easily replace existing workers
Swapping labour for capital - the nearer the replacement cost of capital for labour to meeting the increased costs demanded by the union, the weaker the bargaining power
The level of profits - higher profits strengthen the unions demands for higher wages
What are the disadvantages of trade unions?
If wages rise firms will see a rise in their cost of production and this can negatively affect profits and eventually lead to less jobs
Negetive externalities when workers are striking with the trade union if their job is a important job were there is high risk people can die and there is many third part effects of this
When trade unions have limited memberships, it is hard to achieve successful collective bargaining and this is typically the case for the lowest paid industries
What are the advantages of trade unions?
Unions can help to prevent unemployment by campaigning against job losses, and provide education and training their members which improves their productivity and human capital
Trade unions use their collective bargaining to increase the real wages of their members therefore improve their welfare/ living standards
Unions can act as a counter to the powerful companies/ employers who may pay lower wages and spend less money on worker training
What is the primary sector?
Obtains raw materials from nature
What is the secondary sector?
Transforms raw materials into manufacturing materials
