Trade Union Flashcards
(15 cards)
What is the Trade Union?
An organised group of employees who work together to represent and protect the rights of workers, usually by using collective bargaining techniques.
What do Trade Unions aim to do?
Trade unions aim to gain better wages, protect jobs, improve non-monetary aspects of jobs
eg pension rights, protect against unfair dismissal, ensure health and safety at work, counterbalance any monopsony power
Factors making it easier for a trade union to gain a pay increase with no job loss?
• Labour is a small percentage of total costs
• Impossible or difficult to substitute labour with other factors of
production
• Demand for the final product is inelastic (costs can be passed on by firm to consumers) and/or increasing
• Trade unions control the supply of labour (closed shops)
• Firm is already making substantial profits
• Pay claim is accompanied by a productivity rise (labour demand may shift right too)
Arguments supporting a Trade Union?
• Better wages and working conditions
• Trade union wage premium = higher wages
• Lower wage inequality
• Ensure real wages are not eroded
• Counterbalances monopsony power of employers
• Can improve industrial relations if union works well with management
Arguments against a Trade Union?
• Reduces employment flexibility
• Prevents efficient working of labour markets
• Adds to business costs if wage is higher with no improvement in productivity
• Reduces profits of companies
• Can delay introduction of new technology
Factors of a Competitive Labour Market?
For a labour market to be competitive it has:
• Many buyers (employers) and sellers (workers)
• Perfect Information
• Homogeneous Labour
• Mobility of Labour
• No Monopsony Power
Wages are determined by the interaction of demand and supply; the market will adjust to changes in the conditions of labour demand and supply
Factors of a Non-Competitive Market?
Most labour markets are not competitive because:
• Monopsony employer
• Barriers to entry
• Information asymmetry between employer and workers
• NMW
• Trade Unions & collective bargaining
• Lack of labour mobility (geographical & occupational)
• Discrimination
• Employment laws/regulations
Policies to improve Geographical Mobility?
• Regional policy
• Investment in transport & infrastructure
• Addressing difference in house prices.
Policies to improve Occupational Mobility?
• More & better education and training
• Investment in schools and universities.
Policies to reduce discrimination?
• Anti-Discrimination Laws and Regulations
- Enforce and strengthen existing anti-discrimination laws that prohibit discrimination the Equal Pay Act
Affirmative Action / Diversity Initiatives by employers
• Access to Quality Education and Training
- Provide opportunities for
individuals from marginalized groups to acquire the skills needed to access higher-paying jobs. Reform entry to universities.
What is the Gig Economy?
Firms that operate digital platforms/apps – which allow
individuals to undertake jobs, or ‘gigs’, for end-user e.g. Uber and Deliveroo.
The gig economy has grown with the rise of technology and the increased
demand for flexible work arrangements, including zero hours contracts.
It benefits employers who can offer lower wages and reduce their costs.
It offers workers more flexible hours, but there is less employment
protection and fewer employment benefits; a lack of job security.
What is Labour Migration?
Cross-border migration of people from one country to another
Difference between immigration and emigration?
Immigration: people entering a country to live/work/study
Emigration: people leaving a country to live/work/study
Benefits of Net Immigration?
• More skilled workers & higher productivity
• increase in labour supply (LRAS shifts out)
• can drive innovation and
entrepreneurship
• migrants can add to AD
• positive multiplier effects
• fill skills gaps
• remittances sent home may be used to buy exports
• higher tax revenue
Costs of Net Immigration?
• welfare costs
• greater demand for public services
• possible displacement of some domestic workers
• social tensions
• higher demand for housing raising house prices and rents
• risk of poverty
• exploitation for migrants
