THE STATE OF THE UNIONS: TRADE UNION FINANCES, 1975–1985
| DOI | https://doi.org/10.1108/eb055120 |
| Published date | 01 February 1988 |
| Date | 01 February 1988 |
| Pages | 17-21 |
| Author | Paul Willman,Tim Morris |
| Subject Matter | HR & organizational behaviour |
THE STATE OF THE UNIONS: TRADE
UNION FINANCES, 1975-1985
by
Paul Willman
and Tim Morris
London Business School'
Introduction
There has been a certain amount of research recently on the extent to which trade unions have adapted to
the changed economic, political and legal climate of the 1980s. This work has focused on the state of workplace
organisation, the extent of union membership and recognition, and the role of full time officials [1]; it has tended
to proceed from the assumption that the environment of the 1980s is more difficult for trade unions than
that of the 1970s, and questions have even been raised about the future of trade union organisation in the UK.
This work has not, however, looked at one basic dimension of union activity — the financial status and
performance of trade unions. In fact, little has been written about the finances of trade unions, and the extent
to which unions have experienced financial difficulties across most of the last two decades.
This is surprising, for at least two reasons: firstly, there
has been a good deal of publicity, both about the
financial status of some unions, such as the National
Union of Mineworkers and the National
Communications Union immediately after their
involvement in large disputes, and more recently about
the finances of the TUC itself. Secondly, because the
data necessary to perform a financial assessment of
the trade union movement exist. Statute requires annual
returns, which contain statements of income,
expenditure and assets, a balance sheet and a copy of
the union rules, including those relating to financial
matters, to be made to the Certification Officer by all
unions.
A complete series of these data is available for the
period 1975 to 1985; in fact, one can go back much
further [2]. Similar returns provided the basis for the only
previous systematic study of the finances of British trade
unions, that of Latta [3], covering the period 1960 to
1970.
These data offer a fair picture of the financial
status of trade unions across a decade during which
they experienced both their most rapid post-war
expansion and their most rapid decline. They enable an
assessment both of the "state of the unions" and of
the role of membership change in financial
performance. As we shall show, the data reveal that
unions are, in the main, in surprisingly good financial
health,
given their membership loss. In fact, the data
raise serious questions about the financial benefits of
the expansion in trade union membership which
occurred in the late 1970s. In financial terms, unions
have prospered rather more since 1981 than in the six
years prior to that.
*This article arises from work sponsored by the Department
of Employment. We are grateful for the assistance of the
Certification Officer and his staff, and for the research
assistance of Phillipa Buckland. All errors and omissions, and
the views expressed, are the responsibility of the authors alone.
The Research
The results reported here represent the preliminary
findings of a project concerned to analyse in depth the
financial performance and status of all large unions [4].
We are concerned here primarily with the aggregate
picture, and the reported data refer to all unions filing
returns, both TUC affiliates and others. We shall refer
to the disaggregated data only for illustration.
The raw data on the aggregate picture are given
annually in the Certification Officer's Report. They cover
income, expenditure and assets, and give figures for the
unions' "net
worth",
i.e. assets minus liabilities [5]. From
these data, we have calculated the following ratios:
(1) subscription dependency, i.e. subscription
income divided by total income in a given year;
(2) solvency, i.e. the balance of total income over
total expenditure in a given year;
(3) subscription income per member, i.e. the per
capita subscription return;
(4) administrative costs per member, i.e. the per
capita running cost, and
(5) net worth per capita, i.e. per capita funds at the
end of the year.
For the income and expenditure data, and for the final
three ratios, we present data at constant prices to allow
comparisons over time.
These are relatively crude measures, but the returns do
not allow more sophisticated ones. They do not itemise
organising costs, or officials' salaries, or numbers
employed by the union. A further problem is that,
although the returns are standardised, certain
accounting policies are not. Unions differ in their
policies on depreciation, and in their allocation of certain
expenditure items to different funds [6]. These data
shortcomings should be borne in mind in the analysis
to follow.
ER 10,2
1988
17
To continue reading
Request your trial