Trade Unions in the Labour Market (Evaluation Skills Video)

In this short revision video we analyse and evaluate three key points with respect to this question: "Evaluate the view that trade unions help improve outcomes in the labour market."

Core Notes:

Trade unions can use their collective bargaining power to increase the real wages of their members and therefore improve welfare.

Eval: If wages rise faster than productivity, then firms will see a rise in unit costs and this can negatively affect profits and eventually lead to less jobs.

Unions can act as a counter to the monopsony power of employers who may pay lower wages and spend less on worker training.

Eval: A monopsony employer does not always pay lower wages than they need to. Many employers understand the positive link between pay and productivity.

Unions can help to prevent structural unemployment by campaigning against job losses caused for example by import dumping.

Eval: Unions may impede competitiveness if they seek to block the use of technologies that replace some workers with robots.