Trade unions are central to improving productivity

High quality jobs and a strong employee voice are crucial for sustainable, fair productivity growth


The latest UK productivity figures may have reported a welcome rise, but they do not detract from the urgency of addressing the longer-term story of poor productivity, and ensuring that productivity growth is sustainable and fair.

Output per hour is still below pre-crisis levels and 15 per cent below where it would have been if the pre-2008 trend had continued.

In his recent Mansion House speech, George Osborne spoke of the need for Britain to address its poor productivity record and confirmed the government’s intention to announce a ‘productivity plan’.

UK productivity, particularly, since the crash, has been the source of much recent debate and attempts to crack the so-called ‘productivity puzzle’.

There are a number of drivers of productivity including education and skills, infrastructure, equipment and innovation. But investment is key. Osborne acknowledged in his Mansion House speech that we don’t export, train, invest, manufacture or build enough.

Improving productivity also requires better work organisation and recognition of the importance of strong employee voice, a point emphasised in a recent report by ACAS.

This is why Unite has written to the chancellor to urge a dialogue among all parties about how we address the UK’s poor productivity performance, a dialogue that must include trade unions as representatives of millions of employees.

In the letter we point out that Britain’s best-performing sectors on productivity include car manufacturing, aerospace and other engineering sectors which have a very high level of union density, and where trade union involvement has been central to the improvements secured.

When the government praises the success of the UK motor industry, for example, it should not forget the contribution of Unite representatives.

Recent analysis by the National Institute of Economic and Social Research finds evidence that ‘unionisation may be beneficial to workplaces seeking to improve their performance after the recession…counter to the proposition that firms benefit from a highly deregulated and non-unionised environment.

Furthermore, research I have conducted with Kim Hoque of Warwick Business School, Nick Bacon of Cass Business School and Neil Conway of Royal Holloway also shows the positive effects that workplace union representatives can have in improving job quality which can lead to higher productivity.

The government’s commitment to continued austerity will undermine otherwise worthwhile initiatives to encourage investment. The TUC has reported on how austerity has held back productivity and the OECD recently highlighted how increased demand and investment are critical to improved productivity, wages and competitiveness.

Further austerity will only serve to damage productivity growth.

That aside, policy and action needs to recognise the critical role that investment in workers, their workplaces and the infrastructure they use has for improving productivity.

Attacking trade unions distracts from the key priority of improving productivity growth, and also seeks to marginalise one of the key players in addressing the problem.

Sustainable improvements in productivity growth will not be achieved by trying to squeeze ‘more for less’ out of workers, extending the ‘flexible’ labour market or making work less secure.
What’s needed is an active industrial strategy that includes:

  • investment in infrastructure, equipment, services, skills and innovation
  • better work organisation with worker and trade union input
  • well-paid, decent, secure jobs
  • rebalancing the economy away from an over-reliance on financial services
  • reform of the banking system to ensure investment in the real economy
  • corporate governance reform to end the short-termism that inhibits investment.

Government policy and action has a clear role to play in delivering productivity growth and shaping the strategic direction of the economy. And trade unions have a key part to play in meeting the productivity challenge and ensuring that there is sustainable and fairly distributed productivity growth.

John Earls is head of research at Unite

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27 Responses to “Trade unions are central to improving productivity”

  1. stevep

    If we want a balanced economy and real democracy in the UK then Trades Unions are vital.
    They ensure that the only way of challenging the power of the rich man is kept intact: Collectivity.

  2. gunnerbear

    “In the letter we point out that Britain’s best-performing sectors on productivity include car manufacturing, aerospace and other engineering sectors….” F**k all do to with the Unions, everything to do with the use of high technology and a skilled workforce. For example, where I live, until the ’80s there were 4 steelworks employing about 38,000 people. There is one now….it employs about 4,000 people and produces more steel to higher specifications for more demanding applications than the 38,000 people ever did – technology doing the work of men and women. Nothing other than massive taxpayer subsidies is bringing back those 34,000 lost jobs.

  3. gunnerbear

    “well-paid, decent, secure jobs” Something we all want – so Mr. Earls, what specifically should we be doing in a globalised world where BRIC economies will only get more and more dominant?

  4. gunnerbear

    “But investment is key. Osborne acknowledged in his Mansion House speech that we don’t export, train, invest, manufacture or build enough.” But Mr. Earls, and by extension the CotE, why would UK business want to spend money on training a UK worker when it can import the labour more cheaply from the EU.

  5. Torybushhug

    Why aren’t the rich unions snapping up failing pits such as Hatfield? I asked the same question in the 80’s, when Unions told us pits were perfectly viable. They could make them worker co-ops or whatever.
    Where was the prat of Ballsover when the architect of the climate bill (Milliband) set about making life even harder for pits?
    I see the left is up in arms about the pit closure, yet only the other day you were all behind the ‘KEEP IT IN THE GROUND’ campaign.
    And you wonder why the left is loosing traction across western Europe? No one with a brain can take you seriously.

  6. stevep

    Yes, technology replacing the jobs you and I used to do. Who benefits? Not you or I.
    I`ve got a lot of sympathy for the Luddites, they saw what was coming and tried to raise awareness of it.
    Under the current world regime of corporatism, the day we`re all replaced by robots is the day wer`e all F****d.
    Never mind people whining on about benefit costs, they won`t want us around any more.
    I can just see the SunMail headlines.

  7. gunnerbear

    I think this is the sort of thing you mean….. I’ve seen it….it’s actually very good black satire.

  8. blarg1987

    Same can be said for the right.

    One minute demanding less regulation and more freedom, then as soon as things hit the fan, demand better accountability from government for letting that freedom in the first place.

    I think you would find, that if the Unions did open them as workers co operatives, the government at the time would have but as many road blocks in the way to make it economically unviable.

  9. blarg1987

    It would not, if however we as consumers had more openness and transparency from said companies so they would have to tell us such things we as consumers could change our shopping habits as soon as they start loosing money they will change their tune.

  10. stevep

    Absolutely correct.

  11. stevep

    The only black satire worth considering is 5 more years of a Tory government.

  12. gunnerbear

    Joking aside, what is the one policy you would say the Labour Leadership should push to win back voters?

  13. gunnerbear

    As the rise of Aldi and the other discounters has shown – the public care about price. For example, milk in supermarkets is cheaper than water – and the majority of the public don’t give a f**k about what price the farmers get ex-farm gate.

  14. blarg1987

    There is more to it then that, for example, I do not know which places give satff their full tips, and which use it to top up their wages.

    Part of the problem is lack of information.

    Discount places like Aldi etc, pay reasonably well, last time I checked, and people are going their more partially out of desperation rather then choice.

  15. RebeccaFHardy


  16. TN

    Only if they’re more like German unions. I won’t listen to the dinosaurs of Britain’s most prominent unions (there are other unions out there not affiliated either Labour or the TUC who don’t subscribe to these views) who haven’t a clue about productivity. These 70s throwbacks are a joke and the sooner LFF stops offering them publishing space the better.

    Your parroting of the “anti-austerity” line is a farce as it didn’t really resonate with large swathes of middle England in May. Given that borrowing remains stubbornly high, the austerity line by the left is becoming less credible.

    I’d love to know your definition of the “real economy” because I doubt any of these dinosaurs have experience running businesses.

    Productivity has naturally fallen seeing as how manufacturing as a whole is down in the UK economy. Something I don’t exactly trust the left to ever pioneer with their love of big taxes and benefit scroungers

  17. stevep

    Sorry for the late reply.
    It`s difficult to connect with potential voters because everything goes through the filter of the media, particularly the press, who distort the message.
    The internet has made it easier to speak directly to people and it should be the media of choice in the future.
    I feel people, young and old, don`t trust politicians and feel disconnected from the decision-making process. Voting once every five years to elect one autocrat or another seems old hat and an eternity compared to instant voting on say, the X factor or big brother or social media campaigns.
    I genuinely believe people want more say in how the country is run, proper democracy. Power vested in the people.
    It would scare the hell out of politicians and civil servants, but if any party went for it and said when in government they would include the public in it`s decision making process via internet /TV/ phone surveys to directly create policy it would gain massive support.
    It could be done simply via the internet or phone just like the surveys, polls and voting the media run all the time now for all sorts of things.
    There would have to be a mediator and regulator to ensure fair play and fair media coverage, but it could work well.
    If hapless viewers can sit through several weeks of “Britain`s ot Talent and make their inormed choices
    Like I said earlier, it would be a nightmare for civil servants and would certainly lead to a very different society to the one we have now, but it might be one we would actually enjoy living in.

  18. gunnerbear

    So what happens when the ‘Left scum’ (including Cameron on this issue) want to p**s UK taxpayer cash away on Int. Aid and the Great British Public rightly (as the polls always show) say, “You can stop that f**kin’ s**te – spend the cash on defence….” You know as well as I do, that if the question was asked should we spending money on Int. Aid, the answer would be a resounding ‘No’ – so what would the s**t at the top of the Labour Party do then?

  19. stevep

    If a system of democracy based on direct input from eligible voters was enacted, there would be no need for Westminster, or politicians, or the House of Lords. Just ordinary people having a say on issues that affect and shape their lives.
    Sounds mad I know, but that`s only because we are conditioned to allow other (more qualified?) people to make decisions on our behalf.
    The political parties would effectively cease to exist as they are now because there would be no need for politicians to represent us. Just focus and lobby groups would exist to present the preferred voting options in their best light to the media.
    The media, especially the press, would have to be regulated and moderated so as to allow the various options on tax, education, the economy etc. to be presented in as balanced a way as possible.
    Crazy idea? Certainly for politicians to propose it, would be like turkeys voting for Christmas. No more of them representing their own interests whilst paying lip-service to the people who elected them.
    If Britain really is OUR country, as we have been propagandised from birth to believe, then we as ordinary citizens should run it.

  20. Torybushhug

    Why aren’t the unions funding a mine buy out this time? Their reps and spokes people in the media always imply they have all the answers to running sustainable compassionate enterprise, so what are they waiting for, show us all the way.

  21. gunnerbear

    “The media, especially the press, would have to be regulated and moderated so as to allow the various options on tax, education, the economy etc. to be presented in as balanced a way as possible. ” Respectfully…….hell no…..the Press and Media should be as chaotic and uncontrollable as possible.

  22. blarg1987

    Because as above, there would be road blocks put it the way.

    The Unions do not have the capital to buy the mines in the first place, also many mines are now flooded which as made them uneconomical.

  23. stevep

    “The press and media should be as chaotic and uncontrollable as possible”. That is only ever advocated by the establishment because the media, especially the press, is right wing and supportive to their agenda.
    If there was a predominantly Left-wing press and general media ( not possible, takes lots of money), there would be continuous whining and bleating for mediation and regulation.
    If true Democracy is to become a reality in the UK, in the interest of fairness and balance the media would have to be regulated.

  24. gunnerbear

    “That’s why the BBC takes so much flak from the right, because it is the nearest thing we`ve got to an impartial, fair media.” The BBC can’t help themselves……. Let’s see if the BBC want to foot the bill for free TV licences….. …though the BBC wants to charge for catch-up TV…… …great….the tiny first steps on the road to a subscription service…..and the end of the bloated BBC.

  25. stevep

    And the end of mass impartial broadcasting in the UK. Still, that would please some people.

  26. Harold

    We should be more like countries which do not have free Trade Unions that will sort things out.

  27. Harold

    Given that borrowing remains stubbornly high, the austerity line by the left is becoming less credible. Your words, do you not mean Austerity is becoming less credible? Now I will assume the response is a “no” to which I might ask why did the Coalition miss all of its own targets? Secondly if in five years time the deficit is still not cleared and the National Debt has continued to rise, remember in the last five years it rose more than under any other Government, will you still be keeping your fingers crossed?

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