Don’t Vote for the Tories: They’re Strangling the Unions For No Good Reason

by Benjamin Studebaker

British Prime Minister Theresa May has announced plans for a snap election on 8 June. She’s way ahead in the polls, and the Conservatives may win–they may win by a lot. But they shouldn’t. So I’m continuing a blog series called “Don’t Vote for the Tories.” Each post gives you a new reason to reject the Tories at the polls this June, grounded in research and data. I aim to do at least one of these each week until the vote. Today we’re talking about trade unions.

While there’s a lot of disagreement about how strong unions should be, nearly everyone in Britain agrees that unions are important and necessary–78% of British people agree that unions are essential to protect worker interests. The reason why is relatively straightforward–without unions, individual workers are at too great a negotiating disadvantage. Without a job, it’s difficult to have a liveable income, and when there are large numbers of workers with the necessary skills, some number are bound to end up without work. Employers can use this threat of joblessness and the insecurity that comes with it to force workers to accept inordinately low wages. But if workers join together in unions, their bargaining power increases considerably–it’s difficult for an employer to replace all the employees, particularly on short notice. Workers can use strikes to force their employers to agree to pay them more. Even if you’re not in a union, the presence of unions elsewhere in the economy forces your own employers to lift their compensation to attract talent.

Many people in Britain believe that the unions were too strong in the 1970s–that they demanded pay increases that were too large, and contributed to stagflation. But whatever we may believe about the 70s, it should be clear to everyone that we are no longer in that situation. Today unions are much weaker in Britain than in the 70s. Union density–the percent of the labour force that is unionised–has fallen precipitously since the early 80s, and is today much lower than it was even in the early 60s:

The question today surely cannot still be “are the unions too strong”–it must be “have we gone too far”? With each passing year, British unions become weaker and weaker, falling ever further from their post-war apex. While economic growth rebounded in Britain in the 80s, it never fully recovered, and the recent Tory governments have produced the worst economic growth rates since Jim Callaghan:

If there was an economic return on weakening Britain’s unions, that return seems to have been exhausted by around 1990–when union density returned to the pre-Wilson level (around 40%). There’s also plenty of evidence to suggest that weakening the unions may not have been necessary at all–in the Scandinavian countries, union density remains much higher (67% in Sweden, 52% in Norway, and 67% in Denmark). Yet each of these countries have continued to best Britain in per capita GDP throughout the last half-century, and Britain has not made significant gains against the three as a group since diminishing its unions:

Yet even as the policy of weakening the unions confers no obvious economic advantage on Britain, the Tories continue it. Just this past year, they enacted the Trade Union Act of 2016. This bill makes it much harder for British unions to raise money and strike effectively. Here are a few of the changes:

  • The unions are now forced to hold a binding referendum every five years on whether they will continue making donations to the Labour Party–this deliberately targets one of the opposition’s main sources of funding. Union members must also now opt-into donating individually.
  • Unlawful picketing has been elevated from a civil offence to a criminal offence.
  • Unions now must hold a binding referendum on whether to continue an ongoing strike every four months.
  • Unions must now inform their employers two weeks in advance of any strike, giving them more opportunity to plan for strikes and diminishing their disruptive power. Employers will also be permitted to hire scab labour to replace striking workers.
  • The government now has the power to limit the proportion of time any trade union member spends working for the union.
  • Most importantly, unions must now achieve a 40% vote to initiate a strike on at least 50% voter turnout. This means that if 50% of union members vote, 80% of those 50 would have to support the strike. This is extraordinarily difficult to achieve and poses an existential threat to the right to strike.

The strategy here is similar to American “right to work” laws–the government presents these reforms as if weakening the unions increases the liberty of individuals. But of course, the price for this individual liberty is economic subjugation for British workers as a class. The Tories are deliberately creating loopholes so that more British workers can free ride on the unions without contributing to their political and economic strength. It would be one thing if there were some credible argument that further reductions in union power were economically necessary, but there’s no clear evidence for this. With British per capita GDP well behind that of the heavily unionised Scandinavian countries and British growth rates lagging below historical levels, there is little reason to think that more anti-union policy will encourage growth. Indeed, weakening the unions only contributes to the sluggish wage growth we talked about a few weeks ago. So why do it?

Perhaps they are just extraordinarily poor at interpreting economic data and genuinely believe that doing the same old thing–weaken the unions and let investors keep more of the money–over and over, regardless of the situation, will restore prosperity. Perhaps they want weaker unions because that makes it harder for the Labour Party to raise money. Or perhaps the Tories don’t care about generating economic growth, at least not in absolute terms. Perhaps they want the relative share of the wealthiest Britons to increase as much as possible–perhaps they’d rather the pie be smaller, so long as the slice that goes to the rich gets bigger. The most significant economic change in Britain since trade union density began falling is that the share of income going to the rich has increased dramatically:

If the Tories aren’t grossly incompetent or out to bias the political system against Labour, the most plausible reason to continue to hit the already battered unions would be a desire to restore the economic distribution which prevailed prior to World War II, when the top 10% captured nearly 35% of all income. If that’s their plan, then the Tories might say anything about the economy, regardless of its basis in fact, if it encourages British voters to support the policies that enable it to do this. Whatever the motivations, Tory economic policy is not necessary. It’s all pain, no gain. Spare yourself the flagellation–vote for someone else who can win in your area.

Previous entries in this series:

Subsequent entries in this series: