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 establishmentperformance in the decade of the 1990s compared with the 1980s – and the recent scrambleto explain the phenomenon. In this contribution, we chart these changes along thedimensions of financial performance, labor productivity, employment, quits, absenteeism,industrial relations climate, and plant closings. Using the most recent workplace survey, wealso investigate the controversial notion that union influence is positive where unions arestrong and is negative where unions are weak. This notion, encountered in recent research inBritain (and Germany), emphasizes the benefits of the collective voice of unions, arguing thatthis voice is only 'heard' when the union is strong or a credible agent. We examine thiscontention for a fuller array of definitions of union influence and workplace performancemeasures. Overall, our discussion reveals some evidence that is consistent with reducedbargaining power in the wake of anti-union reform measures and heightened product marketcompetition. On the other hand, there is little support for the recherché notion that strongerunions have a beneficial impact, yet weaker ones do not.

Keywords: plant closings, Union strength, hierarchy of effects, financial performance, labor productivity, employment change, quits, absenteeism, employee attitudes

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