We conclude that unions do not, overall, reduce productivity, though it varies according to specific circumstances. Unionisation does make businesses less profitable for the owners. But importantly, it also reduces income inequality, a useful social function given the problems that flow from a widening
Do unions increase productivity?
We conclude that unions do not, overall, reduce productivity, though it varies according to specific circumstances. Unionisation does make businesses less profitable for the owners. But importantly, it also reduces income inequality, a useful social function given the problems that flow from a widening wealth gap.
How do unions raise productivity?
There are multiple channels by which trade unions may affect labour productivity, and these effects may cut in different directions. More able workers may queue for union jobs where they pay above market wages, a worker selection effect that may raise labour productivity in the union sector.
