Examining Unions’ Prescription For UK’s Economic Ills

Organized labour wants better pay and working conditions, and a voice on how to lift productivity – including with AI

UK train worker

We convened a group of senior leaders across the public and private sectors on Nov. 19, 2023, to discuss the UK labour market from the workers’ point of view. Unions have seen their membership and influence decline in the UK, as in other countries, but health service and railway workers, baggage handlers and university professors have been expressing discontent over stagnant wages and insecure working conditions with a surge of industrial actions. Kate Bell, an economist and Assistant Secretary General at the Trades Union Congress, explained the labour movement’s motivation and strategy, and why she believes addressing labour’s concerns can go a long way to fixing some of the UK’s endemic economic shortcomings. Here are some of our key takeaways:

  • The sources of labour’s discontent run deep. Inflation-adjusted average earnings have been flat or declining for most of the past 15 years and zero-hours contracts, which provide no guarantee of work, have continued to proliferate despite calls for reform like the Taylor Review proposal for two-way flexibility to ensure fairer treatment of workers. The strains of the pandemic on essential workers and subsequent surge in inflation have served as a tipping point, helping drive industrial action to the second-highest level of the past three decades. Securing jobs, better pay and working conditions is the TUC’s overriding priority, and workers in the UK, as elsewhere, are eager to take advantage of their increased leverage in the post-pandemic recovery. The extent to which that happens through collective bargaining agreements as opposed to the decisions of individual workers, via quiet quitting and job-hopping, remains uncertain.
  • Organised labour can be a partner in solving some of the UK’s thorniest structural problems. Weak productivity has been a perennial issue for the UK, and Bell was happy to discuss how unions can help – including by embracing tools like artificial intelligence. AI has great potential to spur productivity growth, Bell said, but the TUC believes Britain needs a regulatory framework to ensure that the technology lifts up workers rather than replacing them. That means implementing the technology in consultation with employees, thinking about guardrails against algorithmic discrimination, and ensuring a right to human review of AI decisions. Unions also want greater investment by government and business in worker training to improve the quality of work, and a voice on company boards to advocate for more long-term solutions. Such policies are common in many European countries and enjoy support from organisations like the OECD. There’s room for the UK government and business to take a more constructive approach in this area.
  • The 2024 election is a big opportunity, and a challenge, for unions. The labour movement may not be formally affiliated with the Labour Party it helped launch a century ago, but its sympathies clearly lie with party leader Keir Starmer and his team. The TUC engaged with the Conservative government when former Prime Minister Theresa May promised to extend protections to contract employees and gig workers, but that legislative initiative died after she left office in 2019. Unions hope to wield greater influence if Starmer takes power, but they recognise that a Labour government would face stiff budget constraints as high interest rates are aggravating the UK’s high public debt and deficit levels. Instead of quick wins, unions may have to settle for a more sympathetic ear in Downing Street and a willingness to boost investment in public services like the National Health Service over the longer term.
  • The TUC faces a growth challenge of its own. The unionised share of the UK workforce has fallen by a third since 1995, to a less than 25%. It’s an aging movement with modest representation in sectors of the economy that employ a lot of young workers, such as hospitality. It also doesn’t adequately reflect the racial and ethnic diversity of today’s British society, which Bell acknowledged. The TUC is trying to change those trends. It advocates the goal of decarbonising the economy, something that many young people share, and sees net zero as an opportunity for growth and employment. And Bell contends that the TUC’s core economic strategies address the desire of young workers for better jobs and pay, and the chance to own their own homes. “We think trade unionism is still the best way to improve people’s jobs, pay, and conditions,” Bell said. The question is whether she and her colleagues can win more workers over with that argument.