Trade unions in an era of globalisation
The objectives of this thesis are twofold. First, to investigate the link between foreign competition and the decline of unionisation in Britain during the 1980s and early 1990s. Second, to examine the impact of international trade on the wage bargaining strength of trade unions as measured by the union wage gap of individual workers. The study focuses primarily on the manufacturing sector given that it has suffered the heaviest decline in unionisation and is the most tradable and open sector of the UK economy. An important aspect of the thesis is the data used. The empirical analyses are carried out using labour market information from large individual and firm level surveys such as the New Earnings Survey Panel Dataset and the Workplace Industrial Relations Survey matched with industry trade data compiled from the OECD's International Trade by Commodities Statistics. The results demonstrate that foreign competition had, at most, a weak impact on the extent of unionisation in UK manufacturing. It seems more likely that the anti-union policy pursued by Thatcher's Conservative Government restricted the exercise of union power whilst providing employers with the opportunity to reaffirm their prerogatives and marginalize the union movement. On the other hand, we do find that increased openness to international trade served to moderate union wage demands during the 1980s. Although, it would appear that the disciplining effect of foreign competition diminished over time as the union mark up was not adversely affected towards the mid-1990s.