Introduction

The literature discussed in Chapter 4 and the data in the last chapter both suggest ttiat there may be financial benefits accruing to unions by virtue of size. Larger unions can distribute fixed costs over a larger revenue base and are likely, ceteris paribus, to have more influence on employers. However, the material reviewed in Chapter 4 also suggested two other propositions; firstly, that there may be institutional or leadership benefits from growth but that, beyond a certain size, there may be no advantages to members themselves; secondly, that there may be circumstances in which growth is not cost effective in that recruitment costs outweigh subscription returns. Growth may, it appears, produce returns to all members in the form of scale economies, to leaders in the form of greater revenues, or to no one at all.

Empirically, disaggregated growth through recruitment or merger has been pursued by most large unions and concentration of membership has resulted. In 1950, 84% of union members were in the 50 largest trade unions. Since then, these unions have grown more rapidly than unions as a whole (Buchanan, 1981: 234). By 1985, they accounted for 94% of total union membership.

In this chapter, we shall examine the financial implications of growth and specifically the proposition that there are economies of scale in the provision of union services. Section 2 looks generally at theories of union growth and at the mechanisms through which unions grow. Section 3 looks directly at scale economies; in particular, it seeks to discover whether such economies can be said to exist and at the major elements of unions' costs.