Did Thatcher break the trade unions?

Unless there is a world-changing event somewhere, nothing that isn’t about Margaret Thatcher will get read today or probably for the rest of the week. There is a lot to say about her so I will restrict this piece to a question I have often thought about: Did Thatcher break the trade unions?

There is a surprising level of consensus on this one. Both left and right tend to agree, although they use very different language. For the right, Thatcher tamed the unions, restored the economy and made Britain great again. For the left, Thatcher smashed the unions, destroyed the working class and ruined the economy. However, both agree that it was Thatcher wot did for the unions.

I’m not so sure though. Was it the Thatcher government’s laws that reduced trade union militancy or was the fall in industrial action and union membership due to other factors.

The strike statistics for the 1980s tell an interesting story. As this chart of ONS data from Full Fact shows, the introduction of compulsory ballots for strikes and the election of union leaders in the early 80s didn’t have any noticeable effect on the number of days lost to strikes. Apart from the highs of the 1979 Winter of Discontent and the 1984 Miners’ Strike, the level of militancy stayed pretty much the same. It was not until after the Thatcher period that the big decline came.

Screen Shot 2013-04-08 at 17.01.16

This is not as odd as it might look. The suggestion that enforced democracy broke union power assumes that unions members were only militant because their leaders forced them to be. That may be the image we have of 1970s unionism but it was a lot less widespread than the tabloid myths would have us believe. For the most part, strikes were only called when a majority of workers felt aggrieved enough to down tools. When they voted in secret ballots, the results were often not that different from the show-of-hands in the car park.

When the big drop in industrial militancy came, at the end of the Thatcher period, it was probably more to do with changes in the economy than changes in the law.

Unions emerged as a response to powerful employers. As workers were pulled into ever-larger manufacturing operations and subjected to factory discipline, organising into equally disciplined and regimented bodies was a natural defensive response. When companies became larger, so did the unions. As companies merged, the unions followed suit. Trade unions were a mirror image of the large corporations and public sector bureaucracies in which their members worked.

Union leaders, therefore, were most comfortable when dealing with other large and well-defined organisations. Once the large industries declined, the trade unions declined with them and proved unable to re-orientate themselves to the generally smaller organisations in the service industries with their higher levels of part-time and female employment. The decline of manufacturing and the privatisation and fragmentation of the old nationalised industries hit the unions hard and their membership never recovered.

It is a similar story in most of the major western economies. Trade union membership has declined over the past three decades as manufacturing sectors have been rationalised, (or have collapsed) and production has been outsourced to Asian countries. Only in Scandinavia, where governments work in partnership with trade unions to regulate the economy, has union membership held up. Everywhere else, it has declined, in some places by much larger percentages than in the UK.

Percentage of employees in trade unions

Selected OECD countries – 1979 and 2008

Union Density

Source: OECD

It is therefore likely that much of the decline in union membership would have happened anyway, even without the Conservative government’s anti-union legislation. Wherever large-scale manufacturing declined, so did the unions.

That said, Margaret Thatcher and Ronald Reagan were cheerleaders for the economics of free-trade, state-shrinking and deregulation which helped to bring about the decline of manufacturing employment in most western countries. Union membership started falling in Britain sooner than it did in many other countries. It would be wrong to say that the Thatcher government championed these policies just to break the trade unions. It is unlikely that they realised at the time the impact these policies would have on British industry. Some of Thatcher’s key supporters were industrialists. They would probably have been horrified had they been able to see ten to fifteen years into the future.

But not all of this can be attributed to Margaret Thatcher. These were global trends. Thatcher was a key player but so were Ronald Reagan, Deng Xiaoping and a number of other people. Britain blazed the trail but, chances are, something similar to the world economy we see today would have happened sooner or later anyway.

Both righties and lefties over-state the case when they say that Margaret Thatcher broke the unions. Like an endangered species, they were heading for decline because the ecosystem that supported them was changing. As their traditional hunting grounds disappeared, their numbers declined. All the Thatcher government did was give them a shove in the direction they were already going.

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12 Responses to Did Thatcher break the trade unions?

  1. Michael Flack says:

    Interesting – and this isn’t the only area in which I suspect the Great Woman theory of 80s history is grossly over simplistic.

  2. Duncan Brown says:

    Yes, if economic change hadn’t created a growing private sector service workforce, she wouldn’t have found the level of support necessary for the political confrontations and legislative changes. But I think those changes were still necessary to achieve the total result – we went from having one of the worst problems of union militancy to having one of the least, and other economies underwent many of the same changes. Plus, some of those economic changes were accelerated by other policies (e.g. privatisation and deregulation).

    The better indicator to look at is stoppages rather than days lost (second chart here http://wonkery.co.uk/blog/2013/4/8/the-thatcher-record), as a few large-scale and long-lasting disputes cause big spikes in the days-lost data.

  3. hrgem says:

    Agree – the eco system changed and they failed to adapt, find new ways of making themselves relevant. Still making the same mistake today.

    • SadButMadLad says:

      Unions are rarely relevant. In times when the economy is stagnant or shrinking they do their best to keep their members working. That doesn’t really help. If a business is doing badly, forcing it to carry on paying non-market wages just prolongs the agony of the business’ demise. In times when the economy is buoyant they are not really necessary and membership naturally drops. In both situations, the unions don’t really help.

      • Given that trades unions appear to have little point either in good times or bad, it seems odd that they have survived for so long.

        In fact, membership does not correlate with GDP growth (or any other measure of “economic bouyancy”). There are times when both grow (the 50s and 60s), times when they both fall (the late 20s and early 90s), and times when they diverge (the early 70s saw membership up and GDP down, while the late 80s saw GDP up and membership down). Union membership is influenced by longer-term trends than GDP, such as the legal climate, levels of foreign investment, and the changing composition of the economy.

        The last of these is the most significant. Globalisation and deindustrialisation have made it more difficult for unions to organise and exert leverage. Examples of this are the shift from highly-concentrated industries (coal, steel) to more fragmented ones, such as retail; the growth of complex supply-chains, which diffuses vulnerability to industrial action; the shift from bluecollar to whitecollar roles (cultural snobbery); the growth in temporary working (both the low-paid “precariat” and high-paid specialist contractors); and the increasing churn in employment (i.e. no more job for life), which makes workers less confident about investing their own time in union activity.

        “If a business is doing badly, forcing it to carry on paying non-market wages just prolongs the agony of the business’ demise”. Au contraire, higher costs will accelerate its demise. As business exit/entry is a primary driver of productivity growth, this may be no bad thing.

  4. Charles Cotton says:

    Interesting to read Martin Wolf’s comments in today’s FT that Deng Xiaoping probably did more to transform the world through a shift towards markets than Margaret Thatcher or Ronald Regan.

  5. christof74 says:

    I think her bigger impact on unions rising home ownership (right to buy) and rising house-prices (credit-fueled).
    People with mortgages to pay are much less risk-averse.

  6. teagoemplaw says:

    So interesting that this turn of events has brought this topic in particular right back into focus. I looked at exactly this for my undergraduate dissertation *clears throat* “An examination of the decline in Trade Unionism in Britain since 1979” (catchy title eh?) and I concluded (in a relatively unsophisticated undergraduate way that) it wasn’t all Maggie’s fault. I had the great fortune to interview Frances O’Grady (now General Secretary of the TUC) in early 1997 for the purposes of my dissertation. She knew even then and I have no doubt knows now the extent of the challenges facing the Union movement. Uniting and (in certain circumstances mobilising) an increasingly fragmented and individualistic workforce was never going to be easy. As Rick says, the then Prime Minister simply shoved them further and faster along an inevitable course.

  7. dickt says:

    I worked in Industrial Relations before Mrs T had got to power, and during that time. Mrs T was essentially a figurehead, and carried then, and carries now, the blame for lots of stuff that she had nothing to do with. For instance, putting Mr Scargill in his place was supported by every TU FTO that I knew – including the far left, (but excluding Militant),. All the FTOs that I knew hated Scargill. So did many local shop stewards. If you lived and worked in an NUM area, but belonged to the AUEW, EETPU or the T & G, the NUM treated you like dog poo on their shoes.

  8. Juli says:

    Interesting piece, Rick. No doubt, none of Maggie’s policies were entirely her fault. We are sophisticated enough now to understand that even a dictatorship relies on support and certainly no British Prime Minister has ever been a one-man band. She was not a dictator in the classic sense of course: she was a parochial woman who was surrounded by stupid, shortsighted and fawning men – and plenty of opportunists. The legacy of Thatcher’s governance with respect to the Unions was the derrogatory language and simplistic arguments used to ridicule and displace the very principle of union. Today, we could argue that that perception was the real damage because we are now seeing that unions are as essential as ever to the dignity of employment in the face exploitative power.

  9. metatone says:

    Putting aside the focus on an individual, the privatisation program (which was not unique to Britain, but the UK was an early adopter of the policy) did a lot to cut away the political impact of strikes. BT staff could go on strike and it was Iain Vallance’s problem, not the Minister. You can argue that this changed the dynamic in a significant way.

    PS. Would be great if you would write on the effect of RTI on small business. It seems ironic that the Tories are introducing this kind of red tape…

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