TRADE UNION

Trade unions
Trade unions are associations of workers formed for the purposes of improving the pay & working conditions of their members.
Types of trade union:

1. Craft unions- unions of workers with a particular skill 2. General unions- workers with range of skill. 3. Industrial unions- al workers in a particular industry. 4. White-collar unions- represents a particular profession. Unions in a country, often belong to a national organisation. For e.g. in India, a number of union belong to the All India Trade Union Congress (AITUC). This is the oldest and one of the largest trade union federations in the country.

Role of Trade Union

1. 2. 3. 4. 5. 6. Negotiate on behalf of their members on pay scales, working hours and working conditions. They negotiate on holidays, health safety, promotion prospects, maternity and job security. Unions may try to protect or improve workers rights. They provide information on a range of issues for their members, for instance on pensions. They help with education and training scheme for the product produced and hence for labour. They provide a range of benefits to their members including strike pay, sickness pay and unemployment pay.

Collective bargaining
Meaning- For the great majority of the labour force, wage rates & working conditions are decided by a process known as collective bargaining. This process involves negotiations between union officials, representing a group of workers, and representative of employees. Negotiations are carried out between trade union officials, who represent the workers, & members of employers associations, who represent the different firms in an industry. A trade unions power to influence wages depends very much on its ability to influence the supply of

Claims for higher wages

Trade unions will base their claims for higher wages on one or more of the following grounds: 1. An increase in the cost of living - Unions try to maintain the real wages of their members, & will ask for wage increases to cover any increase in prices. 2. An increase in productivity Where the productivity of labour has increased, trade unions will press for some of the benefits , in the form of higher wages. 3. An increase in profits- If the profit of an industry is increasing, the unions will try to ensure that the workers obtain a share of the increased profits. 4. Comparability A pay rise to one group of workers will probabaly lead to demands for pay increases .

Factors affecting the strength of a trade union

A high level of economic activity- If output & income in an industries are increasing, so they are able to improve the pay & conditions of workers. A high number of members- The more members a union has, more funds it is likely to have finance its activities. Also, employer find its difficult to replace union labour. A high level of skill- Unions representing skilled workers are in relatively strong position as it can be difficult to replace their workers.

A consistent demand for the product- produced by the workers. Unions that represents workers making goods & services that are essential to consumers are in a strong position.

Industrial action
If negotiations break down on wage claims or disputes occur over working conditions, there is a range of industrial actions that can be initiated by a union in support of its claims. There could be an overtime ban, with workers refusing to work longer than their contracted hours. Workers may also work to rule. This involves workers undertaking the tasks required by their contracts only. The most well known form of industrial action, however, is a strike. This involves workers withdrawing their labour.

Government often try to prevent strikes by encouraging unions and employers representatives to go to arbitration, in case negotiations break down.
Arbitration concerns the involvement of a third party seeking to reach an agreement.

Trade unions Influence on the supply of labour

Besides negotiating & taking industrial action, unions can seek to raise the wages of its members by restricting the entry of new workers into the industry. Unions may seek to do this by insisting that new recruits have high qualifications or may operate a closed shop. The later occurs when employers can only employ only those workers who are the members of the union.

Advantages of Trade union for a Firm & workers

1. It is less time consuming, less stressful and hence cheaper to negotiate with workers as a group than to negotiate with each worker individually. 2. Union provide a useful channel of communication between employers and workers.

3. They often encourage workers to engage in education and training which raises productivity and promote improved health and safety.
4. They also provide an outlet to vent workers discontent and channel their grievances to the employers, thereby reducing conflict. 5. Union also benefits non-unionised labour as any improvement in pay and working conditions usually applies to non-members also.

Unions around the World

In some countries trade unions are illigal like Maldives & Saudi Arabia. Industrial workers in Pakistan have the right to form trade unions but a number of laws restrict their actions and hence effectiveness. Union membership, as a percentage of the labour force, is high in Mauritius. Unions are more powerful in European countries.