CLOBBERING UNIONS WORKERS’ POWER CANNOT BE RESTRAINED BY LAW ALONE

Press, Volume CXV, Issue 33857, 31 May 1975, Page 14

CLOBBERING UNIONS WORKERS’ POWER CANNOT BE RESTRAINED BY LAW ALONE

< By

FRANCES CAIRNCROSS

in the I

Reprinted bg arrangement)

An astonishingly rapid shift in opinion has taken place in the pa-' couple of years. From being the view only of the backwoods riglit. i e feeling that trade union power needs to be curbed is becoming consensus of the liberal centre. This week it broke new ground when was fervently — even shrilly — advocated by Mr Paul Johnson, an avoue>: socialist, in the "New Statesman."

In this article Frances Cairncross, who writes "Economic Notebook" for the "Guardian,' examines the arguments for curbing trade union power. Ihe power of British trade unions, and its effect on the economy, were the subject of an article by Paul Johnson in the “New Statesman," which was reprinted in "The Press" on Wednesday.

i W hen an idea becomes so ' fashionable so fast, it should Ibe regarded with suspicion. There are perfectly sound and sensible reasons for [wanting to restrain trade unions — but doing so is a much more complicated ‘business than some of the latest passengers on the bandwaggon seem to realise. The major reason for wanting to restrain the unions is because their [ power makes the whole •business of slowing down ! inflation more difficult and [more painful. Monetarist economists are ; basically riglit in arguing •that trade unions do not by I themselves cause inflation. I To put their argument at its; [simplest, if all workers ask i for more money at the same time, they can only be [satisfied if the Government I prints more. If it does not, then the stronger workers, or unions might get more i money — but the weaker • will lose their jobs. Only if the Government,! worried by this increase in j unemployment, expands the economy to create more jobs; will there be an over-all ■ [increase in the level of wages and the rate of price ' inflation. In a country like Britain,; ■ where Government control' ' over the money supply is [complicated by the big overseas sector and by the vast size of the public sector,; this analysis begs several l questions — but it remains' fundamentally true that, trade unions cannot cause! inflation unless the Government allows them to do so. ! Union pressure j True, but meaningless, for! [the strength of trade unions allows them to put tre-i [ mendous political pressure! on the Government. This pressure works in ! two main ways. First, sup- [ pose the Government rigidly [ Refuses to expand the econ[omy — as Mr Denis Healey! . intends that the present | Government should do- this' year. The more successfully! the strong trade unions bid up their members’ wages,; the faster everyone els.e will' be priced out of their jobs. The faster unemployment) [rises, the stronger the sheer! electoral pressure on the Government to expand will be. !j Strong trade unions, ini ■ other words, raise the i trade-off point between stable I prices and stable employ- - !ment. As it tends to ben (workers other than those in'i [the strong unions who lose

their jobs first — cleaning, women, not printers for example — appeals to the common sense, or selfpreservation instinct of the strong union understandably I tend to fall on deaf ears. The second main way that; the unions exert effective; pressure on Government is within the public sector, I When an employer can printl his own wages, he can[ hardly tell his employees, ;convincingly he cannot afford •to pay them more. Further, in the public sector, the Government is usually a monopoly supplier of essential services — national; health, electricity, public l transport. If a private firm, making rubber bands, is brought to a halt by its workers the ! firm is not likely to come i under public pressure to settle. If hospital wards are; shut down, or the electricity supply interrupted, or commuter trains cancelled becauses of industrial action by a public sector union, the Government will quickly come under public pressure; to restore the services by ; making an award. ! So in a political sense, trade unions have a considerable influence on inflation. With inflation in Britain I now all domestically generated and running at an annual rate of more than 34 per cent in the last three • months, it is hardly surprising that more and more people are beginning to: think that something must be done about union power. But many people, who take this point of view, fall [ into the trap of thinking the solution is simply to change; the law. The usual demand I is for some legal curb on strikes, particularly on, unofficial strikes, or for an! end to the payment of social [security benefits to strikers’ families. Full employment These simple cures ignore the reasons for the growth in trade urjion power. Trade unions are powerful : not simply because they J have a legal right to strike. : They are powerful because workers in general; 1 and, indeed, all over the' 1 industrial world are now in a position of unprecedented, strength vis-a-vis employers. This is the result partly of 1 the advent of full employ-/ ment. Gone are the days of ! the nineteenth-century, when; a huge and rapidly growing ! pool of underemployed labour allowed the well-off 1 and even the moderately l well-off to afford plentiful l ; help in the house, postal l ' deliveries several times a 1 day, and shops with ample•! and courteous shop assist-' 1 ants. Now the male workforce ’ in Britain is barely growing 1 at all, immigration has;< almost completely stopped, and the main source of net; I new labour is the return of ’ older married women to jobs i when their families leave;! home. Japan, France and j

/even the United States ha\ [greater reserves of undei ‘ used manpower than doeBritain. ! Even if it had not been ’Government policy since the war to run the economy • with the smallest possible ! ! margin of unemployment the increasing scarcity of | workers would surely have [added to their bargaining 11 power. The specialisation : and technological complexity of modern industrial society ; has had the same effect. It might be possible to 'break a Glasgow dustcart , drivers strike by sending in ,jthe Army, just as enthusiastic amateurs helped to brea\ , the Great Strike of 1926. But ’ neither amateurs, nor the , Army could stand in for th< , power engineers, or tax in- [ spectors, or hospital consultants. So all these groups ac quire major bargaining power, whether they are unionised, or not. For some . of them, their power is enhanced still further by the .(Opening up of an international labour market. A good neuro-surgeon, or civil • engineer, or professor of economics has a world mai ket price. No simple cure So any desire to cloblr , the unions must be tempere by a realisation that work ers’ power cannot be checke. just by Act of Parlia ment. Outlawing strikes i impossible in a democracy. Earlier this month, the Society of Registration Officers, who are prohibited by law from industrial action, voted at their annual conference to do just that if their pay claim was not met. [Yet they face substantial penalties, both as a society and individually, if they carry out their threat to dis- , rupt the registration of births, marriages and deaths. Nor is cutting off social security benefits to the families of strikers a simple cure. Anyone who has read Jaroslav ' Hasek’s delightful book "The Good Soldier Schweik,” knows what havoc could be perpetrated [by a mutinous worker with [no rights at all. Reforming industrial relations, as the Donovan Report concluded seven years ago, is a slow and cumbersome business. Legislation might be able to help a bit. by providing an orderly framework. But changing trade union behaviour ultimately depends on consent — con- ■ sent by managers as well as jby workers. Il depends on a national realisation that the price of disorderly industrial relations is slower growth, lower living standards, faster inflation and higher unemployment than could otherwise be achieved. Until most of the population accepts this, any attempt to reduce the legal rights of trade unions is likely to be counterproductive.