Advantages & Disadvantages of Trade Unions (Cambridge (CIE) O Level Economics)

Workers no longer need to negotiate with management on their own as they benefit from collective bargaining

Workers receive better pay than  non-unionised workers

Workers enjoy better working conditions than non-unionised workers

Workers enjoy better non-wage benefits such as guaranteed lunch breaks

Workers receive specialised job training and free legal advice from the union

Industrial action is stressful as it is a conflict between workers and management

Workers do not get paid while on strike

Strike action disrupts economic activity and can upset other people in the economy

Individual workers may not agree with specific demands made by the trade union on behalf of all the workers, and yet they are pressured to support the collective action

Some union members continue to work through a strike (they may need the money) and receive abuse and intimidation from the other striking union members

Training from the trade union increases worker productivity which decreases costs

Empowerment in the workplace improves employee motivation, which usually results in fewer sick days, higher productivity and greater output for the firm

Including unions in decision-making increases the time period taken to implement changes which can be detrimental to effective competition

Management styles have to be more inclusive and less authoritarian which some managers find difficult to accept

Meeting union demands increases costs of production, which may reduce output and profits

Trade unions help create a more equal and prosperous society

A prosperous society is the basis of strong consumption in an economy and this helps to drive economic growth

If firms’ profits increase due to increased productivity, governments receive more corporation tax

Higher wages mean that the workers pay more income tax to the government, which can be used to further fund public and merit goods

Industrial action reduces output, lowers firms’ profits, thereby lowering the potential corporation tax collected by the government

Strike action is often very disruptive to many people’s lives, especially when it occurs in essential industries such as rail networks

Governments may find it harder to attract multinational corporations (MNCs) to invest if industrial action occurs regularly

MNCs may be more reluctant to invest in strongly unionised economies as the costs of production will be higher