Tuesday, November 13, 2007

Union Power

These days they're called Unison

Following this morning's post on Johnson buying off the NHS unions, I've updated myself on just how big a grip unions have on our public services generally.

The absurdly named BERR- the Department for Business, Enterprise & Regulatory Reform (the old DTI to you and me) produces an annual report on the trade union threat, from which are taken the following facts and figures.

Overall union membership has plummeted over the last quarter century. Its peak was in 1979, when 13.3m people belonged to unions, a workforce penetration (or density) of just over 50%. Density today is down to 28%, a virtual halving. Clearly, something special must have happened in 1979 (can't think what), although encouragingly, the downward trend has continued under Labour.

But in the public sector, unionisation has not declined nearly so much. As the following chart shows (or it would if BERR's pdf charts were properly legible), public sector union density is still 58.8%, compared to only 16.6% in the private sector- so more than three times as high.

This pattern means that industries dominated by the public sector- or those like the energy utilities, that used to be in the public sector- are by far the most heavily unionised. The very worst is Public Administration and Defence, with nearly 60% union membership. But even health and social work (with a private sector and lots of non-unionised part-timers) still has getting on for half:

Now, students of Sydney and Beatrice (Webb, not the ones in the Sex Pistols) will recall that a trade union "is a continuous association of wage earners for the purpose of maintaining or improving the conditions of their employment." And as their fantastickal banners still proclaim, they were needed to defend the workers against the grasping evil of Victorian capitalism. And sure, as a cockney cock-sparrer ground under the bosses' boot in 1894, we can understand how you might go with that.

But this is 2007. And so... er... how come the last bastion of Big Unionism is the non-profit making, socially responsible, many not the few, ethnic and gender balanced, progressive consensus, public sector? Surely the People's Workers shouldn't need defending against the People's Progessives?

The answer of course, is that unionisation in the public sector still pays. A monopolistic employer not dependent on customer funding can never go out of business, no matter how much the union grabs for its members.

Plus there's another benefit: in a world of centrally determined pay scales and fixed increments, unionised workers can grab a bigger share of the cake from their non-unionised colleagues. The effect is plainly visible in the wage premia unionised public sector workers achieve over their non-unionised colleagues, compared to the position in the private sector where relative pay is more likely to reflect true economic value to the organisation.:

Now the money's run out, the postal workers and tube drivers have already given us a reminder of jolly old public sector union action. With six out of ten public sector employees still unionised, there's much more to come.

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