Explaining Changes in the Union Mark-up for Male Manual Workers in Great Britain, 1953-83

Layard, Metcalf and Nickell have formed annual estimates of the union mark-up for unskilled males in the United Kingdom manufacturing sector over the period 1951-1983. We critically assess their estimates as an index of union power and propose a number of hypotheses that determine the union mark-up in both cyclical and secular contexts. We use their mark-up estimates to test these hypotheses. We find that the mark-up is anti-cyclical and is secularly influenced by the level of social security benefits. It tends to be higher under Conservative administrations and it varies directly with the density of union membership. It does not appear to depend on incomes policies.