3.4 Trade unions

Some countries stop firms contacting their workers outside of their normal working hours. In 2024, Australia joined 16 other countries when it passed a law to protect workers\' free time. Such legislation can increase the health and motivation of workers and is supported by trade unions. However, it can reduce the price elasticity of supply of firms in both competitive and monopoly markets.

d) Discuss whether or not trade union membership is likely to increase.

One reason why the price of houses in cities such as Hong Kong, London, and New York is very high, is the low price elasticity of supply of houses. Trade unions in some of these cities are calling for more affordable housing for workers. Governments are also trying to implement various microeconomic policy measures to reduce the price of houses. In addition, the stability of the housing market can impact upon the effectiveness of monetary policy.

d) Discuss whether or not trade unions benefit workers. [8]

Serbia is the world's second largest producer of raspberries, a product with elastic demand. Consumers experience the economic problem when buying raspberries. Few raspberry farm workers are members of trade unions. Membership of trade unions in Serbia has fallen to 20% of all workers by 2020. In that year, Serbia had more state pensioners than workers.

c) Analyse why workers decide not to join a trade union. [6]

Trade union membership is much higher in Sweden than in most countries. In 2019, 70% of Swedish workers were members of a trade union. More than 85% of Swedish workers are employed in the tertiary sector, compared with only 2% in the primary sector. Swedish workers spend their incomes on a variety of products some of which, e.g. sweets, are demerit goods. Sweden has the 7th highest per head consumption of sweets in the world.

c) Analyse why workers may join a trade union. [6]

The government of Slovenia has introduced a range of supply-side policy measures to influence the country's inflation rate. Among other factors affecting the economy is a change in trade union membership and strength.

d) Discuss whether or not increasing the strength of trade unions will benefit an economy. [8]

In 2016, the trade union representing doctors in the UK was involved in collective bargaining with the government over proposed changes to doctors' contracts. The trade union considered that the aim of the changes was to reduce the cost to the government of providing healthcare. It may also result in fewer individuals training to become doctors in the future.

a) Identify two influences on the strength of a trade union's collective bargaining power. [2]

b) Explain the likely impact of trade unions on the welfare of their members. [4]

France is a mixed economy. During recent years there have been a number of changes in its labour market. More workers are employed in the tertiary sector and fewer workers in the primary sector. Average working hours have increased and public sector workers have received wage rises.

c) Analyse why a trade union may oppose a rise in working hours. [6]