Pros & Cons for Workers, Firms & Governments
- Different economies have different views about the usefulness of trade unions. Capitalists generally do not like them as the collective bargaining increases costs for firms
- The European Union values trade union activity whereas Saudi Arabia bans trade unions completely
- When considering the benefits of trade union activity, it is useful to analyse the advantages & disadvantages for workers, firms & the Government
Pros & Cons of Trade Unions For Workers
Pros | Cons |
| Workers no longer need to negotiate with management on their own as they benefit from collective bargainingWorkers receive better pay than non-unionised workersWorkers enjoy better working conditions than non-unionised workersWorkers enjoy better non-wage benefits such as guaranteed lunch breaksWorkers receive specialised job training & free legal advice from the union | Industrial action is stressful as it is a conflict between workers & managementWorkers do not get paid while on strikeStrike action disrupts economic activity & can upset other people in the economyIndividual workers may not agree with specific demands made by the trade union on behalf of all the workers, & yet they are pressured to support the collective actionSome union members continue to work through a strike (they may need the money) & receive abuse & intimidation from the other striking union members |
Pros & Cons of Trade Unions For Firms
Pros | Cons |
| Training from the trade union increases worker productivity which decreases costsEmpowerment in the workplace improves employee motivation, which usually results in fewer sick days, higher productivity & greater output for the firm | Including unions in decision-making increases the time period taken to implement changes which can be detrimental to effective competitionManagement styles have to be more inclusive & less authoritarian which some managers find difficult to acceptMeeting union demands increases costs of production, which may reduce output & profits |
Pros & Cons of Trade Unions For Governments/Economy
Pros | Cons |
| Trade unions help create a more equal & prosperous societyA prosperous society is the basis of strong consumption in an economy & this helps to drive economic growthIf firms’ profits increase due to increased productivity, governments receive more corporation taxHigher wages mean that the workers pay more income tax to the government, which can be used to further fund public & merit goods | Industrial action reduces output, lowers firms’ profits, thereby lowering the potential corporation tax collected by the governmentStrike action is often very disruptive to many people’s lives, especially when it occurs in essential industries such as rail networksGovernments may find it harder to attract multinational corporations (MNCs) to invest if industrial action occurs regularlyMNCs may be more reluctant to invest in strongly unionised economies as the costs of production will be higher |
