UK Unions, Collective Action and the Cost Disease

Abstract

This article looks at the financial resources of trade unions in the UK. The core argument is that trade unions are subject to 'cost disease' pressures such that costs rise over the long term above the general level of inflation. They have this property because of the difficulty in solving first-and second-order collective action problems. First-order problems refer to the problems of initiating collective action and second-order problems refer to the management of collective action organizations. Both UK aggregate and case-study data -from one of the largest UK unions, Unite -are presented to illustrate the cost disease problem and to suggest options for its management. In conclusion, the wider implications of 'cost disease' pressures for unions are assessed.

The Twin Track Model of Employee Voice: An Anglo-American Perspective on Union Decline and The Rise of Alternative Forms of Voice

“…The evidence from the longest-running and most extensively analysed dataset, from the UK, shows that unions in the aggregate display consistent long-term real expenditure increases. This has been documented over a period of almost a century (Webb and Webb, 1907;Roberts, 1956;Latta 1972;Willman et al 1993;Willman et al 2017). However, they also suffer from pressures not to increase prices (subscriptions, membership dues) in real terms; these pressures are primarily from competition between unions and competition with never membership.…”

“…By puzzles, we mean evidence that is potentially consistent with our version of experience good theory but appears to be driven by other causes. For example, there is increasing evidence that the standard labour organization itself-i.e., the modern trade union -has significant "cost-disease" attributes (Willman, Bryson and Forth, 2017) that in the current legislative and economic climate render their operation highly tenuous and which might explain their current lack of large-scale organizing success despite an apparent appetite amongst many workers for representation.…”

“…This is essentially the argument first advanced by Willman (2001) himself a former union organizer --and made in the context of why UK unions were in decline amongst small private sector establishments. A more detailed elaboration of this idea -formalised as an extension of the Baumol "cost-disease" argument --has been put forth by Willman et al, (2017) and is discussed below.…”

“…Perhaps part of the reason unions have been so unsuccessful with youth under the traditional organizing model has less to do with 'cost-disease' arguments (Willman et al, 2017) or with the prevalence of young workers located in newer workplaces (Machin, 2000), but rather with important cohort shifts that have, hitherto, been (ii) The millennial population is the same generation to be fully immersed in digital technologies. They are, in the parlance of the current age, "super-conversant" with it.…”

“…We begin by presenting a simple framework for analyzing union decline that follows some of our own work in this area (Freeman, 1998;Freeman and Rogers, 1999;Gomez, 2006, 2014;Bryson, Willman, and Forth, 2017). We model the decline in union representation as a shift in uptake by workers and firms between (at least) two types of employee voice -from representative (collective) to direct (individual) voice.…”