This report advocates for the role of trade unions to rebalance the economy in favour of low and middle earners, spreading the benefits of prosperity across society, and points to the tools Welsh Government can use to strengthen the trade unions movement. Read our report here.
The state of the trade union movement
This study, written by Harry Thompson, considers the role of trade unions in helping rebalance the economy, and explores what unions have done and can still do for workers in Wales.
Months of industrial action have put trade unions in the spotlight, but despite some bright spots the trade union movement in Wales has still experienced a long-term decline.
Young workers are not joining trade unions in sufficient numbers to replace retiring older workers; the trade union movement is non-existent in many parts of the private sector in Wales; and it faces an extremely restrictive regulatory framework that it is not in the gift of the Welsh Government to reform.
Further, workers who would most benefit from trade unions, such as those working in the gig economy, are amongst the least likely to be members. Whilst Wales is in a better position than much of the UK, its union membership levels are still some way from those at top of the international table.
This report and others have outlined that the ‘cost of living crisis’ and decline in living standards in the UK and Wales are not entirely a temporary shock caused by high inflation in 2022-23. Instead, they are the culmination of over a decade of wage stagnation for low and middle earners. This is particularly pronounced in contrast to the countries that the UK would traditionally consider its economic peers, where this phenomenon has been more limited.
Contributing factors to this structural problem for the economies of Wales and the UK include a long-term decline in the labour share of income, inequality within wages, and a lack of productivity and economic growth. Our report highlights the role of trade unions in addressing these issues.
We find that increased union density (the proportion of employees who are members of a trade union) and collective bargaining coverage (workers whose terms and conditions or pay are set as a result of collective negotiations rather than individually) can equalise and raise wages, improve working conditions, and contribute towards economic growth.
In this short study of the trade union movement in Wales, we argue that strengthening trade unions’ density and bargaining powers could have positive effects rippling across the economy. We believe that empowered unions have the potential to increase the labour share of national income, and to ensure that the ‘wage share’ has a flatter distribution across lower, middle and high level earners. They can also increase the quality of working life for many people at the bottom of income distribution, and contribute towards economic growth by increasing demand.
Our four key recommendations include:
Recommendation 1: The Welsh Government should urgently begin work on establishing a bids-based Union Renewal Fund, partly based on the UK Government’s former Union Modernisation Fund and the Scottish Government’s current Fair Work and Trade Union Modernisation Fund. This should explicitly focus on building policy expertise, running campaigns, and organising aimed at younger workers, private sector workers, and those most in need of union representation such as those in precarious employment. Union density and collective bargaining rates amongst these groups should be tracked, with targets set for raising these rates.
Recommendation 2: The Welsh Government should enact Fair Work Wales’ recommendation for a Fair Work Accreditation, underpinning this Accreditation with advantageous access to funding or other benefits. Trade union access and collective bargaining must form a part of any Fair Work Accreditation.
Recommendation 3: The Welsh Government should create a new National Milestone or other explicit target for collective bargaining coverage and union density, alongside a plan of action to achieve these targets. Private sector union density and collective bargaining coverage should be tracked and targeted separately.
Recommendation 4: There appears to be a strong case for the potential devolution of powers to regulate trade unions. The Welsh Government should consider further work on its position regarding the devolution of industrial and employment relations, including the potential for the devolution of powers to regulate trade unions.
The IWA gratefully acknowledges support from the Friends Provident Foundation for this research.
You can read the full report here. A recording of the launch of this report is available to watch here, and you can now listen to our podcast interview with the Welsh Government’s Deputy Minister for Social Partnership Hannah Blythyn MS and Wales TUC Policy Officer Nisreen Mansour about the a range of trade union and social partnership-related issues.
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