Trade Unions

By shree
 What is a trade union?

A trade union is an organization that represents the collective

interests of workers in a particular industry or profession. Its
purpose is to negotiate and bargain with employers on behalf of its
members to secure better wages, benefits, working conditions, and
other rights and protections.
(give example)
 History of trade union

The history of trade unions dates back to the late 18th and early 19th centuries,
when the growth of industrialization and urbanization led to the mass migration of
workers from rural areas to cities. These workers faced harsh working conditions,
long hours, and low pay, and many sought to organize and advocate for their rights
and interests. The first trade unions were formed in the United Kingdom and the
United States in the early 19th century. The movement quickly spread to other
countries.
 How is a trade union formed?
The formation of trade unions typically begins with a group of
workers who share a common concern or goal, such as improving
their wages or working conditions. These workers come together
to form a union and elect leaders to represent their interests. The
union then begins the process of negotiating with the employer and
advocating for its members.
 Types of trade unions:
 Craft unions: Workers who have particular skills. Example: Plumbers and weavers.
 General unions: General unions are a type of trade union that represent workers across a wide
range of industries and occupations, rather than focusing on workers in a specific trade or craft.
 Industrial unions: Represent all the workers in a particular industry. For example those in a car
industry.
 White collar unions: Represent particular professions, such as a pilot or a teacher.
 Blue collar unions: Blue-collar unions are trade unions that represent workers in manual labor
or industrial jobs, typically in manufacturing, construction, and transportation industries. Blue-
collar workers are so named because they often wear blue work clothing
 "Friendly" or "uplift" unions are a type of trade union that focus on improving the social and
economic well-being of workers, rather than solely on collective bargaining and workplace-specific
issues. These unions aim to improve the lives of their members beyond the workplace, by offering
services such as health care, education, and housing. Uplift unions became popular in the early 20th
century, when workers faced significant economic and social challenges, such as poverty, disease,
and limited access to education and health care. Uplift unions sought to address these broader social
and economic issues, in addition to advocating for improved working conditions and wages.
 Craft unions Vs White collar unions
Craft union
 Craft unions, on the other hand, represent
workers in skilled trades, such as carpenters,
electricians, and plumbers. These workers
typically work in manual labor jobs and are
paid by the hour.
 Craft unions represent skilled manual workers.
White Collar union
 White-collar unions represent workers in
administrative, professional, and managerial
positions. These workers typically work in
offices and are often salaried, rather than paid
by the hour.
 White-collar unions are more likely to
represent salaried professionals
 Craft union vs Blue collar union
Craft union Blue collar union
 The members of craft unions typically have a  These workers typically work in physically
high level of skill and expertise in their trade. demanding jobs and are paid by the hour.

 Craft unions represent workers with specific  Blue-collar unions may represent a wider range
skills in a particular trade or craft. of manual workers across different industries.
 What is collective bargaining?
Collective bargaining is the process of negotiating the terms and conditions
of employment between an employer and a union representing the
employees. It typically involves the exchange of proposals and counter-
proposals between the two sides, with the goal of reaching a mutually
acceptable agreement that sets the wages, hours, benefits, and working
conditions for the employees covered by the union contract.
 Negotiation on wages
During a pay increase, a labour union might make a variety of reasons:
 One argument is that the firm whose profits has risen can afford to pay more salary/wages to their
workers. As the higher profit is also because of worker’s productivity.
 Rise in the cost of living:- Trade unions demand higher wages wherever there is an increase in the
cost of living as the real wage falls leading to a fall in the standard of living.
 Comparative wage rate argument: The workers may demand-for a wage increase if other workers
doing similar jobs, elsewhere are being paid higher wages. Example: doctor and nurse.
 The nature of work:- Trade unions usually tend to demand for higher wages for jobs which are risky
or unpleasant e.g., in case of pilots, mine workers etc.
 Increased skills of the labour:- If the labour has high skills to offer, like in the case of professionals
who have specified skills to offer or has attained higher 'qualifications, the trade unions will ask for
wage increase for such workers.
 Increased productivity of the workers: Trade unions demand higher wages if the productivity of their
member increases.
 Breach of an agreement by the employer:- If a certain wage had initially been settled by both parties
and the employer fails to pay, then trade unions will demand for wage increase or for the
implementation of the agreement
 If the workers feel being exploited:- When the workers feel that the wage given to them is too low,
then they may demand for wage increase
 Factors affecting the strength of a trade union
 A high level of skill: Unions which represent skilled workers have more power than those
unions with unskilled workers.
 A high number of members: The more the number of member a union has the more the funds it
has to performs strikes etc. And its also difficult to replace the labour if there are many
employees.
 Demand of the product produced by the workers: Unions which have employees who produce
product which are inelastic in demand has more power.
 Support of government: A union will have more power if it has the support of govermeent.
 A high level of economic activity
 What is an Industrial action?

Industrial action refers to collective actions taken by workers or trade unions, such as
strikes, go-slows, or picketing, to protest against working conditions, wages, or other
issues in the workplace. The goal is to disrupt the normal functioning of an organization
or industry and to put pressure on employers to meet the demands of workers.
The most popular form of industrial action is strike.
 Impact on Economy
Trade unions can have both positive and negative effects on an economy.
Positive Impact:
 Improved wages and working conditions: Trade unions help workers negotiate better wages and
working condition.
 Increased productivity: Improved working conditions and fair compensation can lead to higher
levels of job satisfaction, which in turn can increase worker productivity and efficiency
 Reduced income inequality: By advocating for fair wages, trade unions help reduce income
inequality and promote more equitable distribution of wealth.
 Better training and development opportunities: Trade unions may negotiate better training and
development opportunities for workers, which can lead to increased skill levels and improved
job performance.
 Negative Impacts:

 Reduced competitiveness: Companies facing increased labor costs due to union demands may become less
competitive in the global marketplace.
 Reduced flexibility: Collective bargaining agreements can limit a company's ability to adapt to changes in
the market, potentially reducing its competitiveness and also causes market failure.
 Increased strikes and other forms of industrial action: Trade unions can lead to more frequent and
disruptive strikes, which can result in lost production, decreased economic activity, and reduced investor
confidence.
 Reduced investment: Companies facing labor unrest and the threat of industrial action may be less likely to
invest in new equipment or expansion, which can reduce economic growth.