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Chapter 19: Trade unions
iGCSE Economics
In this topic you will cover the following:
Tick below when you feel
you understand each
area
What is a trade union
How trade unions are organised
Collective bargaining
Discussion Activity: Why I’m part of the union!
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Click here to watch a speech by Arthur Scargill, a former leader of the Miners Union in the UK.
What are your thoughts based on what you have just seen?
What is a trade union?
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Definition: an organized association of workers in a trade, group of trades, or profession, formed to protect
and further their rights and interests.
Trade Unions in the UK
Trade unions and impact on wages
Main roles of trade unions
● Protecting and improving the real living standards of their members
● Protecting workers against unfair dismissal (employment rights)
● Promoting improvements in working conditions, workload & health and safety issues
● Workplace training and education, accumulation of human capital
● Protection of pension rights for union members
List any others below (use your textbook)
Trade Union Membership
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Can you think of
reasons why trade
union membership has
fallen since 1995?
Past Exam question: Complete in your assessment book
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Answer:
Collective bargaining
Definition:
What factors determine the strength of a trade union?
1. Skill level of the workforce (more productive & there will be less of them!) - therefore, it is harder for a
business to fireplace them.
2. Number of people in the Trade Union - more people in the union, the more powerful they will be!
3. Political will of the country - UAE does not like trade unions, whereas France/Germany is a supporter
of trade unions.
4. The demand for the product that the workers produce is rising. If the demand is rising, workers will
have more power as firms do not want to stop production.
5. The level of unemployment in the country/industry. If unemployment is very low, trade union power will
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be higher as there is less choice for the employer.
6. The strength of the trade union leader.
7. The cost of labour as a proportion of total costs for the business. If cost of labour is a small proportion
of total business costs, then trade unions are more likely to get what they want.
Trade union impact on wages
Advantages & disadvantages of trade unions
Make sure that the notes taken here are the pros and cons for both the worker & the firm!
Firms Advantages Firms Disadvantages
● Easier to negotiate with workers ● Loss of output during strikes
● Good relationship can mean higher productivity ● Higher costs of labour (both in terms of wages
● More likely to train and educate workers and working conditions)
● Reduce the ‘them & us’ relationship between ● Less competitive internationally
workers and owners
Workers Advantages Workers disadvantages
● Higher pay ● Forced to join union (peer pressure)
● Better working conditions ● Forced to strike - when don’t want to
● Free legal aid (in case of unfair treatment) ● Costs money to be in a union
● Better relationship with owners ● Can cause unemployment
● Protects workers rights ● (higher costs lead to cost push inflation - which is
bad for everyone)
Activity: Orangeta Ltd (from presentation)
We are going to create our own dispute. You will be split into two groups. (use the instruction sheet supplied to
complete the activity)
Take notes as each team will have a few minutes to prepare a response to what you’ve heard. What was be the best
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outcome? Did you have to compromise? Would you take action?
(NB; All of the above questions are subjective. Try to see both sides of the argument. It is essential when discussion
trade unions that there is balance in your answers)
Past Exam Questions
Essay
Other Past questions on this topic can be found in your textbook, in your examination pack and on
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www.freeexampapers.com
