Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.

New model unions - Operating Models for the 21st Century

237 views

Published on

Presentation delivered at a Fringe Event at the 2019 TUC Congress, organised by Unions21.

Published in: Government & Nonprofit
  • Be the first to comment

  • Be the first to like this

New model unions - Operating Models for the 21st Century

  1. 1. New Model Unions: Options for the 21st Century Paul Willman, LSE Alex Bryson, UCL John Forth, Cass TUC Fringe, 10th September 2019 John.forth@city.ac.uk
  2. 2. The argument in brief ■The organisational model adopted by most major UK unions is in trouble ■ Weak balance sheets ■ Reliance on ‘off balance sheet’ resources that are not guaranteed ■Pressures are intensified by an operating model in which collective action dominates over benefit provision or welfare administration ■Various options for the future ■ Do nothing and hope for the best …. ■ Reduce expenditure, e.g. by moving activities off the balance sheet ■ Increase income via subscriptions ■ Diversify revenue streams via a platform business model
  3. 3. The current operating model ■UK unions have an operating model based around collective action ■Unions amass members and seek to negotiate with employers ■This benefits everyone in the bargaining unit -> danger of free-riding ■ Can be limited by: coercion (closed shop – now outlawed); provision of membership- specific benefits (e.g. sick pay – now covered by the welfare state) or provision of membership-specific services (individual representation, which is costly) ■First-order problem = how to stimulate and maintain collective action ■Second-order problem = how to control the costs of doing so
  4. 4. The current operating model ■Historically, membership income insufficient to cover costs ■Shortfall covered via: ■“off balance sheet resources”: ■ membership activism ■ provision of facilities for union activity by employers ■income from investment yields or disposal of assets
  5. 5. Weakness of the model increasingly apparent Base: employees covered by collective bargaining Source: Labour Force Survey Fewer covered employees are paying union subscriptions …
  6. 6. Weakness of the model increasingly apparent Income barely covers expenditure …
  7. 7. Weakness of the model increasingly apparent Reserves are being depleted relative to outgoings …
  8. 8. Weakness of the operating model accentuated by the ‘cost-disease’ ■Productivity improvements in other sectors (e.g. due to technology) raise wages for workers in those sectors ■Unions must then also raise wages by a similar amount to recruit and retain quality staff ■But scope for own productivity growth among unions has historically been low, so wages and costs rise above inflation Which is, in turn, accentuated by the moral imperative ■Unions need to be seen to provide good jobs (e.g. final salary pensions)
  9. 9. Possible solutions ■Test price sensitivity by raising subscriptions ■Secure state or private subsidy ■Union default (unlikely) ■Enhanced employer contributions (also unlikely) ■Reduce expenditure ■Move items off the balance sheet: requires a reversal of decline in member activism ■Use of technology (e.g. social media) to reduce costs of collective action
  10. 10. A new operating model? ■Extensive adoption of the platform business model: ■Free / low-cost access to the platform for ‘customers’ ■Alliances to build the network (scale effects) ■Generate ‘big data’ ■ Enhances services to members (e.g. info on wage rates) ■ Provides commercial opportunities (e.g. income from advertising) ■Shift from subscription model to transactional model ■ Members buy high-cost services through the app ■Issue: Administrative rationality vs Democratic rationality ■Can existing unions adapt, or does the future belong to new entrants?
  11. 11. Further reading ■Unions21 discussion paper to follow – contact Unions21 ■You can read the underlying academic paper here: Willman P, Bryson A and Forth J (2019) “UK Unions, Collective Action and the Cost Disease”, British Journal of Industrial Relations, May. ■Or if you do not have access to the BJIR, you can find an open-access working paper version here: Willman P, Bryson A and Forth J (2019) “UK Unions, Collective Action and the Cost Disease”, IZA Discussion Paper No. 10043
  12. 12. New Model Unions: Options for the 21st Century Paul Willman, LSE Alex Bryson, UCL John Forth, Cass TUC Fringe, 10th September 2019 John.forth@city.ac.uk

×