Disadvantages of Trade Unions

Although the trade union is associated with the above advantages some shortcomings or disadvantages can also be noticed.

•    The worst disadvantage is that sometimes trade unions tend to encourage inefficiency. This occurs on one hand when trade unions negotiate for higher wages and other benefits. It may reach a point where the workers are paid more than their input to the firm. This means the workers pay is not commensurate with their benefits accrued by the firm and so the firm is at a loss. Picketing and go-slows also make the workers produce a minimum while they still get their normal pay.

•    Political manoeuvrering on the other hand may force some union leaders to use the workers in order to achieve some selfish goals. This will result in sub-optimal operations of the firm.

•    Unions have also been known to cause workers to support union opinions. The workers may thus join a strike not because of their own grievances emanating from their normal course of business but because of the policy of the unions. This may not be very realistic as the subject for negotiation in such dispute would be an intangible.

•    There have been cases where some particular trade unions have been too powerful for their member employers. These powers may emanate from high specialisation of the work (thus such labour being very scarce) or otherwise the members being very many and with huge funds as to compensate workers' losses resulting from say lock-outs. Such trade unions have often led some firms or even industries into bankruptcy. This may be brought about by these trade unions negotiating or bargaining for terms and conditions that a firm cannot afford and it is forced to withdraw from the industry.