Because more equal societies work better for everyone

What influence do unions have on inequality?

Wednesday, 9 September, 2015

Today marks the end of the Government’s consultation on its Trade Union Bill, a Bill that has not been without controversy.

The consultation process has focused on three main areas - ballot thresholds in important public services, hiring agency staff during strike action, and regulating protests. Given a number of these measures (and those not consulted on) could seriously weaken union strength, the Bill’s passing in its current form could further entrench our already high levels of inequality.

At present, unions cover around a quarter of UK employees. They generally cover those with a medium skill level, and with higher pay levels than non-union workers. But evidence shows that, on the whole, union coverage largely has the effect of increasing equality.

The evidence on the link between union membership and inequality is relatively strong. Countries with a higher amount of the labour force in unions have lower levels of inequality. And unions also increase wages for the poorest 35%, while decreasing it for the top 20%, a direct reduction in inequality. There is also solid, separate, evidence that the national minimum wage, and the strength of workers’ bargaining power, decrease pay inequality by limiting low pay.

Little wonder perhaps that over three quarters of people agree that, "Trade unions are essential to protect workers' interests".   A figure that has changed remarkably little over the past 40 years.

If the Bill reduces the strength of union membership, or removes the ability of unions to conduct industrial action, this may well reduce the bargaining power of unions. Given their importance in reducing inequality, this would be an extremely damaging development. 

John Hood, Media and Communications Manager

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