They claim to bring hardworking people together against exploitation by greedy corporations. They are the champions of the common person everywhere. And they are the bane of capitalists and free-market economists. Labour unions, or trade unions, have had a rich and controversial history, and they have been reviled and revered.
In this article, I will explore the concept of labour unions and the arguments about their benefits disadvantages particularly in large industries.
The modern labour unions trace their beginnings to the Industrial Revolution in Britain. The early stages of this transition, which began in the late 18th century, were marked by egregious worker abuses. Before the Industrial Revolution, household “industries” and small-scale workshops were the norm, with very little large-scale manufacturing of any sort. Labour regulations were basically non-existent at the time. As a result, factory owners often subjected their workers, including preteen children, to inhumane working conditions with blatant disregard for their health, safety, or general well-being.
It was against this dire backdrop that the first labour unions were born. Early unions were far from today’s formal, bureaucratic behemoths – they often consisted of groups of workers taking spontaneous semi-organised action against what they saw as unfair or unsafe employment practices.
Unsurprisingly, British parliamentarians and the monarchy saw the unions as a threat to the country’s stability, and laws were soon passed to outlaw such activities.
For the first couple of decades in the 19th century, any attempt by workers to organise protests was frequently met by severe repression. The tide turned in the 1820s, particularly after an event referred to as the “Rising in Scotland”, in which some 60,000 workers took part in a strike. Public opinion turned in favour of factory workers, and the harshest laws prohibiting collective action were gradually repealed.
Before long, the large-scale formation of unions was set in motion. As manufacturing became a more important part of the British, and then, American economies, trade unions, too, grew in strength. In Britain, the Labour Party was founded in 1900, as trade unions became a political force to be reckoned with.
However, following decades of ascendancy, they eventually came to be seen as a threat to Britain’s economic growth and stability. Unions were increasingly organising large-scale strikes over issues that were divorced from the labour movement’s initial focus on ensuring fair pay and safe working conditions. When Conservative Party leader Margaret Thatcher became prime minister in 1979, she mercilessly cracked down on unions, and broke up strikes. Many credited her actions for the country’s subsequent economic expansion.
Around that period, trade unions in America, too, were having problems. Republican Ronald Reagan, who came into power in 1981, and Thatcher both adopted conservative economic policies. Soon after becoming president, Reagan, himself a former union president, famously put an end to a strike organised by the Professional Air Traffic Controllers Organisation, handing a major setback to the unions. Trends in manufacturing also harmed union strength, with imports from countries such as Germany and Japan undercutting the competitiveness of American products.
Over the past decades, with the decline of America’s manufacturing sector, the public sector boasted some of the most outspoken and politically powerful unions in the country. Teachers’ unions are a particularly potent political force, and enjoy strong support from the Democratic Party. Many people blamed the unions for helping to stunt America’s manufacturing sector and its substandard public schooling system. The poor quality of teaching was partly attributed to even the least competent teachers receiving strong backing from the unions.
In general, unionisation rates in developed countries are much lower today than many expect. In America, where the labour union movement has long enjoyed support from the political left, unionisation rates hover around just 10 per cent of the total workforce. Meanwhile, in Britain, the birthplace of trade unions, participation rates have dipped to 23.5 per cent from a high of nearly 50 per cent in 1970.
This leads us to the debate regarding the merits of stronger unions for workers, particularly in large industries such as manufacturing – this is, after all, where the concept of unionisation first originated more than 200 years ago. Stronger unions come in two forms: legislation that provides unions with a bigger say in how companies are run, and laws that make it mandatory for workers to pay dues to a union, regardless of membership. Both measures, particularly the mandatory payments to unions, have contentious histories, and continue to be hotly debated today.
Overtly union-friendly legislation has not had much political success in the US or Britain. Both countries have relatively free markets and prefer to allow corporations and unions to negotiate on their own terms. The pro- and anti-union legislation is itself debated. The Taft-Hartley Act, which America’s Congress passed in 1947, placed restrictions on unions that many said stripped the organisations of power. However, studies have found that the structural balance of power in industries has more to do with union strength than anything else. In industries where workers can easily move between companies and are in high demand, unions tend to be stronger, and vice versa.
In western Europe, France has some of the world’s strongest labour unions. There, legislation demands that unions be consulted before making even the most trivial adjustments in working conditions. Some complain that even a rearrangement of office furniture may require union endorsement. Union strength is frequently blamed for the country’s sluggish economic growth and a lack of dynamism.
On the other hand, many say Germany’s manufacturing dominance over the past two decades is the result of an agreement between unions and industry in the early 2000s. Under the pact, the pace of wage increases was limited to increase the competitiveness of German exports.
As for workers, forcing them to pay union dues is a very controversial idea. Although advocated by unions as the only way to ensure a united front among workers and to prevent some of them from breaking the union line or benefiting from union negotiations without contributing, many say that it is a fundamental violation of workers’ rights. Many states in America have passed so-called “Right to Work” laws that ban the forced collection of dues from workers at a corporation with a unionised labour force.
Workers have always locked horns with the company owners. That is where the labour union movement began and that is where it remains today. Unions have seen better times, but it is indisputable that the labour movement has brought immense gains for workers. That said, the rise of automation makes it unlikely that unions will get any stronger in the future. Ultra-stubborn unions could simply mean accelerating the replacement of workers by machines.
Fundamentally, both workers and capitalists want the same thing: more profits and prosperity for the company. If more countries could follow the German model of sensible collaboration between unions and workers, everyone is likely to be better off.
This article includes research conducted by the Hong Kong National Debate Team on the topic.