The Effects of Trade Unions on Labour Market Outcomes

Abstract

This paper explored the effects of trade unions on labour market outcomes. A trade union is any organisation of employees established to improve the conditions of employment of its members through the process of collective bargaining. The findings of the study revealed trade unions therefore attempt to improve the terms and conditions of employment of their members by the employer through the process of collective bargaining. Collective bargaining has become a determinant of production and labour costs. Between employers and employees in the competitive market, it aids in the distribution of added value. For employees, collective bargaining is a key factor for their income and sustainability on a dynamic labour market. Among employees, collective bargaining aids expressing solidarity through the ‘wage floors’ applying to different groups of workers at a given bargaining level. Hence, the ability of countries, especially developing countries like Nigeria, to be able to compete in the global marketplace depends to a reasonable extent, on their ability to transform industrial relations policies involving trade unions and collective bargaining so that they not only promote flexibility in the workplace but equally encourage the formation and effective use of human resources.