Trade unions and employment change. An analysis of British establishment data

Abstract

Few explanations of the changing employment structures of industrialised countries have omitted some reference to the role of trade unions. For some commentators, it is the unions' ability to raise wages above their 'natural market level' that constitutes a brake on employment growth by increasing the employer's costs and making product prices-uncompetitive. For others, it is the unions' power to impose uneconomic working practices upon management that leads to decline or lack of growth of the organisation [for a discussion see Freeman and Medoff (1984), Mayhew (1983)]. Empirical testing of these and other lines of explanation has been hampered in Britain by lack of suitable datasets. While employment data are detailed and widely available, systematic and reliable information on the extent of trade union influence has been restricted to reported membership levels for broad industry groups [see, for example, Bain and Price (1983), Pencavel (1974)], the 'coverage' of collective bargaining derived from earnings surveys [see, for example, Mulvey (1976), Layard, Metcalf and Nickel1 (1978)] and the extent and frequency of strike action [see, for example, Smith et al. (1978)J.