Date of release: Tuesday, September 15, 2015

 Professor Ozlem OnaranStronger trades unions with high membership levels would provide massive benefits to the UK economy, according to a new report from the University of Greenwich and independent think-tank the New Economics Foundation.

The report, co-written by Özlem Onaran, Professor of Workforce and Economic Development Policy at Greenwich, contends that boosting the level of unionisation to that of the early 1980s would add a potential £27.2 billion to the nation's GDP (gross domestic product). For every one per cent reduction in the proportion of the workforce in unions, the authors say that GDP is reduced by £2.21 billion.

The conclusions are based on detailed statistical work about the impact of unionisation on wages and growth rates across Europe over the last 30 years.

Professor Onaran, of the university's Business School, says "The ongoing bias of government policy towards restricting trades union rights is ill-conceived. Our evidence shows that the inequality of the distribution of income at a national level – favouring the profits of firms over wages of workers – is a drag on economic activity. If half the workforce were in the unions, as in early 1980s, per capita GDP would be £444 higher.

"Our findings counter the political consensus driving economic policy making, which is that profits will improve competitiveness and automatically lead to better social outcomes. To boost growth, and reduce economic inequality and instability, policy must instead focus on supporting and sustaining responsible trade unionism."

The report was released on Monday (14 September), coinciding with the second reading of the Trade Union Bill in the House of Commons.

The report contends that higher wages and salaries will lead to higher economic growth, while government policy of weakening unions, and thereby undermining wages and salaries, has helped weaken this potential.

An expert in globalisation, wage-led growth, employment and investment, Professor Onaran has penned more than sixty articles for books and journals including the Cambridge Journal of Economics and the European Journal of Industrial Relations. A member of the Debt Truth Committee in Greece, she featured prominently in international media this year while analysing the Greek economic crisis.

For more on the report, Working for the economy: The economic case for trade unions: http://b.3cdn.net/nefoundation/9ecfcbfae752499f9f_rkm6bex7d.pdf

For more about studying with the university's Business School: http://www2.gre.ac.uk/about/faculties/business, email courseinfo@greenwich.ac.uk or call 020 8331 9000.

Story by Public Relations

Picture: Professor Ozlem Onaran.