PaulC156 left some interesting comments on an earlier post, to wit:
1. Stagnant median hourly pay in the US over the last few decades coincides nicely with the steady erosion of unionised labor in the States:
http://www.epi.org/publication/ib330-productivity-vs-compensation/.
2. Strong unions improve productivity. Plenty of evidence in a six nation study here:
http://cep.lse.ac.uk/people/vanreenen/lecture_notes/handbook_metcalf.pdf
3. Though not good for profitability… some good anecdotal on the UK motor industry from this article by Professor David Bailey of the Aston Business school here:
http://www.birminghampost.co.uk/business/business-opinion/uk-car-output-up-down-9902855.
4. CEO compensation is inversely correlated with stronger union presence:
http://econpapers.repec.org/paper/ehllserod/19865.htm
On the facts, I don't dispute any of this, but I question which is cause and which is effect.
From general knowledge, there are certain industry-specific factors which say which people are more likely to belong to a trade union or guild (for example the British Medical Association, the Institute of Chartered Accountants, the National Farmers Union etc).
a) The employer is a large employer and especially a monopoly employer/provider.
b) The employer can't go bankrupt (because it is state-run or has a monopoly).
c) There are fixed pay scales.
d) Employees are highly skilled and/or less easily replaceable.
e) There are barriers to entry to that job or profession.
To give some examples:
Historically, the first trade unions were local guilds, higher skilled people who could club together to try and exercise a bit of monopoly power and raise barriers to entry. If you look at the progression to trade unions, it was the higher skilled trades first and domestic workers were the last to be unionised, which never really took off. Higher skilled people are by definition more productive than unskilled people.
In London, buses are run by competing private companies (although regulated by the TfL) and the Tube network is run by TfL (a government body) directly. Each bus company sets its own pay levels but train drivers , which is a government body. So there are several competing for-profit bus companies and the Tube is a monopoly. So bus drivers are less unionised than train drivers.
Doctors are very expensive to train up or poach from abroad, the NHS is a state-backed near-monopoly provider, so all doctors are in the BMA (as far a I am aware) and they negotiate from a position of strength.
The importance of pay scales is, if you know that you get paid the same as thousands of co-workers (more likely in large organisations and the public sector), there is no harm in putting up a united front and asking for a collective pay rise. If pay is set individually according to each worker's skills, experience and working hours (more likely in small businesses), it is every man for himself and less likely to be unionised.
The importance of having an employer with a monopoly position is, if he doesn't, pushing for higher wages will bankrupt him, as happened to some extent with the UK motor industry in the 1970s or 1980s; all that happened was cheaper cars were imported from abroad. If the government imposed an import ban on motor vehicles, then the industry - and trade unions - would have survived (producing crapper cars for higher prices and paying much higher wages).
Stock Exchange rules and the Companies Act mean that larger companies have to pay for an audit whether they like it or not; although auditing is not particularly difficult, it can only be carried out by Chartered Accountants (although Certified Accountants rank equally in law, they are brushed off as second class). This is bureaucracy for the sake of bureaucracy, so those at the top can cream of rental income and impose a strict hierarchy and lengthy training period on new entrants who want to get their snouts in the trough.
There is a limited amount of farmland so there is a limited number of farm owners, they can club together to form the NFU and put pressure on the government to keep the CAP subsidies flowing. Farm workers on the other hand are relatively easy to train up, it is part time and seasonal work and they are unlikely to be unionised.
The importance of collecting rental income/monopoly profits is that it frees up plenty of your time for campaigning, organising and putting pressure on the government to rig things in your favour. Which is why the most vocal groups are people like pensions companies, who live off the tax breaks nominally given to savers.
As a slightly separate topic, the pay of senior people tends to be much higher in businesses which collect 'rent'. So Chartered Accountants (as explained above), home builders/land bankers; oil and gas companies, banks and insurance, entertainment companies, top footballers etc. Top executives skim off some of this rent from their shareholders; if they can depress wages, this boosts profits so gives them more to skim off.
To sum up, it is not that trade unions or guilds lead to higher productivity and wages, it is that higher skills/wages/barriers to entry/profits (whether in the 'free market' or in a monopoly or state-backed organisation) are the fertile ground on which trade unions and guilds (BMA, ICAEW, NFU etc) can flourish.
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