Why Study Trade Unions- Week 6.pptx - Trade unions Why...

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Trade unions
Why Study Trade Unions? (Freeman and Medoff 1984): ‘What do unions do?’ Monopoly Effect 1. Control supply of labour Number of people entering the labour market (‘closed shop’ until 1980s) It was banned by the Conservative Government via Employment Act 1990. USA – pre-entry closed shop was banned in 1947 but ‘union shop’ does continue in some states except ‘right to work states’ Number of people leaving the labour market (job cuts/redundancy) 2. Control working hours including overtime
Why Study Trade Unions? – Monopoly Effect Control on labour cost (wages and fringe benefits) 1. Union Wage Mark-up in UK (2013): Private sector 7%, Public Sector 19.8% (source TUC) 2. Union Wage Mark-up in USA (2014): (Bureau of Labor Statistics) Avg Private sector union worker wages: $46.50/ hour Avg. Private sector non-union worker wages: $29.83 / hour. Thus average wage mark up is 35.85% What is likely to be the impact of the monopoly effect on the firm and the wider economy?
Why Study Trade Unions?- The Voice Effect 1.

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