Unions and Establishment Performance: Evidence from the British Workplace Industrial/Employee Relations Surveys

Abstract

An interesting aspect of British research on unions based on the Workplace Industrial/Employment Relations Surveys has been the apparent shift in union impact on establishment performance in the decade of the 1990s compared with the 1980s and the recent scramble to explain the phenomenon. In this contribution, we chart these changes along the dimensions of financial performance, labor productivity, employment, quits, absenteeism, industrial relations climate, and plant closings. Using the most recent workplace survey, we also investigate the controversial notion that union influence is positive where unions are strong and is negative where unions are weak. This notion, encountered in recent research in Britain (and Germany), emphasizes the benefits of the collective voice of unions, arguing that this voice is only 'heard' when the union is strong or a credible agent. We examine this contention for a fuller array of definitions of union influence and workplace performance measures. Overall, our discussion reveals some evidence that is consistent with reduced bargaining power in the wake of anti-union reform measures and heightened product market competition. On the other hand, there is little support for the recherche notion that stronger unions have a beneficial impact, yet weaker ones do not.

Keywords: Union Strength, Hierarchy of Effects, Financial Performance, Labor Productivity, Employment Change, Quits, Absenteeism, Plant Closings, Employee Attitudes

JEL Classification: J24, J51, J53, J58, J63, J65