What Effect Do Unions Have On Relative Wages In Great Britain?

Abstract

First paragraph: A recent book by two Harvard economists. Freeman and Medoff (1984) summarised the results of research into the role and influence of trade unions in the United States. The book caused a good deal of controversy when it was published, (see the discussion in the Industrial and Labour Relations Review, Vol, 38 pp, 244-263, 1985) not least because of their conclusion that 'unionisation appears to improve rather than harm the social and economic system' (1984, p, 19). Freeman and Medoff identified two 'faces' of unionism: 1) the undesirable face, which enables unions to raise wages above the competitive level. This reduces national output and distorts the distribution of income. 2) the desirable face of unionism, which is its collective voice. This enables unions to channel worker discontent into improved workplace conditions, fundamentally altering the social relations of production. On the basis of their findings, the authors judged that the damaging effects of monopoly power were outweighed by the beneficial effects of collective voice in the US economy.