introduction to trade unionism

1. TRADE UNIONISM

2.  Definition
 Trade union, also called labour union, association of workers in a
particular trade, industry, or company created for the purpose of
securing improvements in pay, benefits, working conditions, or
social and political status through collective bargaining.
 Meaning
 A trade union (or a labor union in American English), often
simply called a union, is an organization of workers who have
come together to achieve many common goals, such as protecting
the integrity of their trade, improving safety standards, and
attaining better wages, benefits (such as vacation, health care,
and retirement), and working conditions through the increased
bargaining power wielded by the creation of a monopoly of the
workers.

3.  Meaning and Definition of Trade Union:
 A trade union is an association of workers formed with the object of improving the conditions of workers. It is formed for
protecting the interests of workers. Workers have little bargaining capacity when they are unorganized. In fact, trade
union movement began against the exploitation of workers by certain managements under the capitalist system

 Historical development
 As an organized movement, trade unionism (also called organized labour) originated in the 19th century in Great
Britain, continental Europe, and the United States. In many countries trade unionism is synonymous with the term
labour movement. Smaller associations of workers started appearing in Britain in the 18th century, but they remained
sporadic and short-lived through most of the 19th century, in part because of the hostility they encountered from
employers and government groups that resented this new form of political and economic activism. At that time unions
and unionists were regularly prosecuted under various restraint-of-trade and conspiracy statutes inboth Britain and the
United States.
 While union organizers in both countries faced similar obstacles, their approaches evolved quite differently: the British
movement favoured political activism, which led to the formation of the Labour Party in 1906, while American unions
pursued collective bargaining as a means of winning economic gains for their worker

 Modern developments
 During the 20th century, craft unions lost ground to industrial unions. This shift was both historic and controversial
because the earliest unions had developed in order to represent skilled workers. These groups believed that unskilled
workers were unsuitable for union organization. In 1935, for example, the AFL opposed attempts to organize the
unskilled and ultimately expelled a small group of member unions that were attempting to do so. The expelled unions
formed the Congress of Industrial Organizations (CIO), which by 1941 had assured the success of industrial unionism by
organizing the steel and automobile industries. When the AFL and the CIO merged to form the AFL-CIO in 1955, they
represented between them some 15 million workers. At the same time, mass unions began appearing in Britain and
several European countries, and before the end of the century the industrial unions—embracing large numbers of
unskilled or semiskilled workers—were recognized as powerful negotiating forces

4.  Indian Trade Union Act 1926:
 “Any combination whether temporary or permanent
formed primarily for the purpose of regulating the
relations between the workmen and employers”
 To improve the economic lot of workers by securing
them better wages

5.  Indian Trade Union Act 1926:
 “Any combination whether temporary or permanent formed primarily
for the purpose of regulating the relations between the workmen and
employers”
 To improve the economic lot of workers by securing them better wages.
 To secure for workers better working conditions.
 To secure bonus for the workers from the profits of the
enterprise/organization.
 To provide legal assistance to workers in connection with disputes
regarding work and payment of wages
 To protect the jobs of labour against retrenchment and layoff etc.
 To ensure that workers get as per rules provident fund, pension and
other benefits.
 To secure for the workers better safety and health welfare schemes.
 To secure workers participation in management.

6.  Functions of Trade Unions:
 1) Collective bargaining with the management for securing better
work environment for the workers/ employees.
 (2) Providing security to the workers and keeping check over the
hiring and firing of workers.
 (3) Helping the management in redressal of grievances of workers
at appropriate level.
 (4) If any dispute/matter remains unsettled referring the matter
for arbitration.
 (5) To negotiate with management certain matters like hours of
work, fringe benefits, wages and medical facilities and other
welfare schemes.
 (6) To develop cooperation with employers.
 (7) To arouse public opinion in favour of labour/workers.

7.  Benefits of Trade Union:
 Workers join trade union because of a number of reasons as given below:
 1. A worker feels very weak when he is alone. Union provides him an opportunity to achieve
his objectives with the support of his fellow colleagues.
 2. Union protects the economic interest of the workers and ensures a reasonable wage
rates and wage plans for them.
 3. Union helps the workers in getting certain amenities for them in addition to higher
wages.
 4. Union also provides in certain cases cash assistance at the time of sickness or some
other emergencies.
 5. Union organize negotiation between workers and management and are instruments for
settlement of disputes.
 6. Trade union is also beneficial to employer as it organizes the workers under one banner
and encourages them follow to peaceful means for getting their demands accepted.
 7. Trade union imparts self-confidence to the workers and they feel that they are an
important part of the organization.
 8. It provides for promotion and training and also helps the workers to go to higher
positions

8.  Advantages of Trades Unions
 1. Increase wages for its members
Industries with trade unions tend to have higher wages than non-unionised industries. Trade unions can pursue collective bargaining giving
workers a greater influence in negotiating a fairer pay settlement.
The efficiency wage theory states that higher wages can also lead to increased productivity. If workers feel they are getting a higher wage, they
can feel more loyalty towards the firm and seek to work for its success.
2. Represent workers
Trades Unions can also protect workers from exploitation, and help to uphold health and safety legislation. Trades unions can give
representation to workers facing legal action or unfair dismissal.
3. Productivity deals
Trades unions can help to negotiate and implement new working practices which help to increase productivity. For example, in wage
negotiations, firms may agree to increase pay, on the condition of implementing new practices, which lead to higher productivity. If the trade
union is on board, then they can help create good working relationships between the owners and workers.
4. Poor wage growth in non-unionised workforce
Modern labour markets are increasingly flexible with weaker trade unions. These new developments in labour markets have led to a rise in job
insecurity, low-wage growth and the rise of zero-hour contracts. Non-unionised labour helps firms be more profitable, but wages as a share of
GDP has declined since 2007. Unions could help redress the monopoly power of modern multinationals.
In 2011 there were 6,135,126 members in TUC-affiliated unions, down from a peak of 12,172,508 in 1980. Trade union density was 14.1% in the
private sector and 56.5% in the public sector.
5. Reduce inequality
From the late 1890s to 1980s, the UK saw a growth in trade union membership. This was also a period of falling inequality and a reduction in
relative poverty. Since trade union membership peaked in the early 1980s, this trend of reduced inequality has been reversed and inequality has
increased.

9.  Potential disadvantage of Trades Unions
 1. Create Unemployment
 If labour markets are competitive, and trade unions are successful in pushing for higher wages, it can cause disequilibrium unemployment (real wage unemployment of Q3-
Q2). Union members can benefit from higher wages, but outside the union, there will be higher unemployment.
It is also argued that if unions are very powerful and disruptive, it can discourage firms from investing and creating employment in the jobs. If firms fear frequent strikes and a non-
cooperative union, they may prefer to invest in another country with better labour relations. For example, in the 1970s, the UK experienced widespread industrial unrest and this is
cited as a factor behind the UK's relative decline.
2. Ignore non-members
Trades unions only consider the needs of its members, they often ignore the plight of those excluded from the labour markets, e.g. the unemployed.
3. Lost Productivity
If unions go on strike and work unproductively (work to rule) it can lead to lost sales and output. Therefore their company may go out of business and be unable to employ workers
at all. In many industries, trade unions have created a situation of a confrontational approach.
 Decline in trade union density has led to a decline in days lost to strikes.
4. Wage-inflation
If unions become too powerful they can bargain for higher wages above the rate of inflation. If this occurs it may contribute to wage-inflation. Powerful trades unions were a
significant cause of the UK's inflation rate of 25% in 1975.

Evaluation
The benefits of trades unions depend on their circumstances. If they face a monopsony employer they can help counterbalance the employers market power. In this case, they can
increase wages without causing unemployment. If unions become too powerful and they force wages to be too high, then they may cause unemployment and inflation
It also depends very much on the nature of the relationship between trade unions and employers. If relations are good and constructive, the union can be a partner with the firm in
maintaining successful business, which helps protect jobs and higher wages. However, if the relationship between trade unions and the management become confrontational, it can
escalate into destructive partnerships which cause a decline in profitability and puts the long-term security of jobs at risk