Union gains

Unions bring higher wages and improved benefits to the workers they represent, but they also bring increased productivity to employers and the overall economy.

Anti-union critics often suggest that unionisation lowers productivity. But according to recent data from the International Labor Organization and some anecdotal analysis of highly unionized employers like United Parcel Service,that argument is false.

The USA is often thought of as a productivity leader. The reality is that US workers produce more than workers in other advanced nations because they work 300 to 400 hours longer per year than workers in Europe and Japan.

Looking at the real measures of productivity in the ILO data – output per hour worked and productivity growth over time – the USA falls to the bottom of the heap among the industrialized nations.

The ILO data shows that where union density and real wages are high, for example in the manufacturing sector, productivity growth is more rapid.

The European countries with strong productivity growth have much higher unionisation rates than the USA. In Ireland, for example, where 40 per cent of the manufacturing workforce is unionised, productivity per hour worked rose at an average annual rate of 8.5 per cent from 1980 to 2005, more than double the US rate.