What Effect Do Unions Have On Relative Wages In Great Britain?
| Author | David Blanchflower |
| Date | 01 July 1986 |
| Published date | 01 July 1986 |
| DOI | http://doi.org/10.1111/j.1467-8543.1986.tb00681.x |
British
Journal
of
Industrial Relations
24:2
July
1986
0007-1080
$3.00
What Effect
Do
Unions Have On
Relative Wages In Great Britain?
David
Blanch
flo
wer*
A
recent book by two Harvard economists, Freeman and Medoff (1984)
summarised the results of research into the role and influence
of
trade
unions in the United States. The book caused a good deal
of
controversy
when
it
was published, (see the discussion in the Industrial and Labour
Relations Review,
Vol.
38 pp.
244263,
1985) not least because
of
their
conclusion that ‘unionisation appears to improve rather than harm the social
and economic system’ (1984, p. 19). Freeman and Medoff identified two
‘faces’
of
unionism:
1)
the undesirable face, which enables unions
to
raise wages above the
competitive level. This reduces national output and distorts the distribution
of income.
2)
the desirable face
of
unionism, which is its collective voice. This enables
unions to channel worker discontent into improved workplace conditions,
fundamentally altering the social relations of production. On the basis
of
their findings, the authors judged that the damaging effects
of
monopoly
power were outweighed by the beneficial effects
of
collective voice in the US
economy.
Despite the fact that trade unions are one of the key institutions in the
operation of the labour market in Great Britain, surprisingly little empirical
micro-economic evidence exists on their overall impact. (See Oswald’s
paper to this conference for a discussion
of
the large body
of
macro-
economic evidence that exists.) Such empirical work that is available has
tended
to
concentrate on the ‘monopoly face’
of
unions, largely ignoring the
‘collective voice’ element. The major reason
for
this, in my view, does not
stem
so
much from lethargy on the part
of
the academic community, but
rather from totally inadequate data. Suitable information has simply not
been available for labour economists to examine the extent to which unions
in Great Britain have influenced turnover rates, quit rates, productivity,
fringe benefits, profits
or
wage inequality, in a way that has been possible for
the United States. (For an exception see Green, Hadjimatheou and Smail,
1985.) Consequently, it is not possible for us to compare the two faces
of
unionism in Great Britain in the same way as Freeman and Medoff have
*
Research
Fellow,
Institute
for
Employment Research, University
of
Warwick.
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