Wednesday 10 August 2011

Union wage premium up for the second year running

Last year I posted on the increase to the "union wage premium", which is defined as the percentage difference in average hourly earnings of union members with non-members.

The new Trade Union Membership 2010 includes figures for the union wage premium based on wages in the last quarter of 2010. It shows the premium rose again in 2010, now standing at 16.7%, with union members earning an average of £14 an hour compared to £12 an hour ofr non-members. Predictably, the gap in the public sector, where union density (and therefore power) is higher, is greater, standing at 21.1% compared to 6.7% in the private sector.

It's interesting to see the sharp rise in the premium since 2008, which I would guess is thanks to union members faring better than non-members at resisting downward pressure on pay through the recession.

These figures deserve much greater prominence than they get - they represent a strong argument for union membership and make union subs (typically a fraction of 1% of pay) look like very good value for money.

The report also contains much that should concern trade unionists. The decline in the proportion of employees whose pay is affected by a collective agreement since 2007 is dramatic. In the public sector this has fallen from 72% in 2007 to 64.5% in 2010, and in the private sector from 20% to just 16.8%. This is much worse than the decline in union density (the proportion of employees in unions) which has declined from 27.6% to 26.3% in the same period, suggesting that the proportion of union members not covered by collective bargaining is growing. If this was the result of mass recruitment in unorganised workplaces, that would be one thing, but in the context of declining membership, it should sound alarm bells about workplace organisation.

Overall, the picture painted by the report is of unions being increasingly effective in defending workers' living standards, but failing to involve workers in that process and seeing their base dwindle as a result.

All the unions that took part in the strikes on 30 June reported significant numbers of recruits. Unions need to show working people that they are serious about resisting cuts and austerity if they are to grow and win - the idea that we grow first and then resist later flies in the face of the whole experience of trade union history.