Trade Unions (Cambridge International IGCSE Business)
Exam board Cambridge International · IGCSEUpdated 2025-05-29
Spec point —
2.2.4· • What a trade union is and the effects of employees being union members
Trade unions
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A trade union is an organisation that represents the interests of its workers in negotiations with a firm’s management or owners
- A trade union's main aim is to **protect and advance the interests of its members **in the workplace
- Most trade unions are** independent of any employer** but try to develop close working relationships with employers
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The interests of the worker include:
- Correct and fair pay
- Non wage benefits of employment such as training
- Health and safety in the working environment
- Suitable working environment
- The reduction of discrimination and worker exploitation
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Trade unions are usually formed by the members of specific industries
- Airline pilots have a pilots' union
- Rail & sea workers have a rail & maritime union
- E.g. The NEA is the USA's largest professional employee organisation, representing public school teachers and other support personnel at colleges and universities
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Workers pay a monthly fee to join a trade union
- The fee is called a subscription
- Membership ends when the member stops paying this fee
The Effects of Trade Union Membership
- Almost 23% of UK employees in permanent positions belonged to a trade union in 2022
- Poland has the lowest level of trade union membership in the EU
- Around 70% of workers in Scandinavian countries are trade union members
- Public sector industries tend to have the highest membership density
- Women are more likely than men to belong to a trade union
- Trade union members generally receive higher pay than non-union members
- Trade unions can become so large that they are able to influence government decisions in favour of workers
Evaluating trade unions from the employee perspective
| Pros | Cons |
|---|---|
| - 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 |
- The higher the percentage of workers from a firm that belong to a trade union, the greater the collective bargaining power of that union with the employer
Evaluating trade unions from the employer perspective
| Advantages for employers | Disadvantages for employers |
|---|---|
| - 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 |
Exam Hint It is commonly assumed that trade unions are negative for business owners. To balance any exam answers, always consider how trade unions can benefit businesses.
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