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Saturday, 27 August 2011

Word of the Day

Trade Union

A collective association of workers whose aim is to improve the pay of workers and improve the conditions of work for its members. Some of the things they work to improve include:
  • Real incomes
  • Pensions
  • Security
  • Unfair dismissal
  • Counter monopsony power that firms hold over workers (see Word of the Day)
  • Protect against discrimination
Unions influence pay by:
  • Collective bargaining: negotiate pay levels above the current levels that exist. This is only effective if the union has control over the entire labour supply available in the industry.
  • Closed shop agreements: Employers and unions agree that all workers be part of the union. This is now illegal in the UK because it encourages labour restrictive practices. Two types, pre-entry and post-entry. Pre-entry is when workers must join the union before starting employment. Post-entry is when workers not part of a union start employment, but have to join a trade union to keep the job.
    • This is to prevent free-riders benefiting from the mark-up wages bought about by trade unions.

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