Discussion Paper Details

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Title: Ten Years of Mrs. T.

Author(s): Charles R Bean and James Symons

Publication Date: April 1989

Keyword(s): Collective Bargaining, Productivity, Unemployment, Unions and United Kingdom

Programme Area(s): Applied Macroeconomics and International Macroeconomics

Abstract: We argue that the 1970s were characterized by attempts to maintain a cooperative, low unemployment equilibrium in the face of considerable union power, through use of incomes policies and neo-corporatist machinery. The 1980s saw a shift away from this, towards direct measures to limit union power. This, together with the adoption of tight macroeconomic policies, explains the initial rise in unemployment. The reduction in union power also helps to explain the acceleration in productivity growth. The craft nature of much of the British union movement has led to a multiplication of bargaining units wihin firms. Bargaining in isolation a union can perceive overmanning and other restrictive practices as being in its intrests, resulting in low wages and productivity. A fall in union power results in a reduction in these inefficiencies and leads not only to a rise in productivity but also in wages.

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Bibliographic Reference

Bean, C and Symons, J. 1989. 'Ten Years of Mrs. T.'. London, Centre for Economic Policy Research.