Trade unions are central to improving productivity

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

Unite the Union flag


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

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

  1. 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

  2. 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.

  3. 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?

  4. 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.

  5. 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.

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