Labour unions should be prohibited or at least very limited because the limit the flexibility of the labour market, and therefore increase wages and increaseunemployment.
Labour unions influence enterprises with the modification of the productivity of employees and restrictions they impose. The case will compare impact of labour union in different countriesaround the world. Since 30 years in the industrialised countries, the labour unions decrease.
Labour unions negotiate for employees have the better revenues possible for employees, in other part theyaffirm increasing salaries will increase productivity but when companies increase salary is very difficult (or impossible) to come back and the risk is only for companies and not for labour unions. Someresearchers proof than in average unionized companies have salaries higher than non unionized companies. That has an important impact on competitiveness of unionized companies, theses companies doreduce margins. Lewis, in 1963, demonstrate in the sector with highest level of unionizing the salaries are higher between 10% and 15% in United states, but this demonstration doesn’t proof theindividual impact for each employee but for the sector completely. For the United Kingdom, Blanchflower and Bryson observe smaller differences than United States (between 8 and 10%).
Figure 1. Additionalwage cost in the presence of at least one union representative |
by Business in France | |
Industries | Excess earnings |
Ind. Agricultural and Food | 7,90% |
Energy, Water | 5,70% |Ind. Intermediate goods | 10,50% |
Ind. Capital goods | -0,7 %* |
Ind. Consumer goods | 3,30% |
Buildings | 5,70% |
Trade | 4,80% |
Transport, Telecommunications | 12,90% |
Business Services |-2,50% |
Personal Services | 3,10% |
Banks, insurance | 8,10% |
Together | 3,20% |
Source : Coutrot, 1996, p. 53. * not significant | |
The effect in France is less important than...