UK unions, collective action and the cost disease

This paper looks at the financial resources of trade unions in the UK. The core argument is that trade unions are subject to ‘cost disease’ pressures such that costs rise long term above the general level of inflation. They have this property because of the difficulty in solving first and second order collective action problems. First order problems refer to the problems of initiating collective action and second order problems refer to the management of collective action organisations. Both UK aggregate and case study data – from one of the largest UK unions, Unite – are presented to illustrate the cost disease problem and to suggest options for its management. In conclusion, the wider implications of ‘cost disease’ pressures for unions are assessed.