This paper will attempt to discuss the cost and benefit of trade unionism, as it exists in the United States. To understand the pros and cons, it is important to understand the environment in which trade unionism developed and the needs they attempted to satisfy. It will discuss the evolution of Trade Unionism through the centuries. From that understanding we can discuss the topic as it relates to our current environment.
Historians agree that American Unionism started in the early 19th Century. These early organizations were formed along the lines of Craft. Daniel Mills explains, in Labor Relations, "Crafts people worked for themselves, or in small shops. They were often in conflict with customers or merchants which they supplied".
(35) These associations were formed to protect their craft, rather than as a collective bargaining union. In the mid 19th Century, America was in the middle of the industrial revolution. We were becoming an urban industrial society. Immigration was becoming a great source of labor supply. These large manufacturing enterprises, exploiting workers without regards to human cost, were ripe for National Union Organization. Jerry Borenstein states in his work, Unions In Transition", They were often loosely organized associations, which were quite short-lived and likely to disappear under hostile pressure from employers and government".
(15) The unions of the late 19th and early 20th centuries were formed largely to protect basic human dignity in the work place. Unions addressed basic concerns regarding safety issues, length of work day and wage. They were largely unsuccessful due to the public perception of unions as Socialistic as well as anti American. People viewed trade unions as being disruptive to the flow of free trade.
It was only during the 1930's that trade unions, as we know them today, were created and accepted. With the passing of the Wagner Act of 1935, formal, legal protection was now afforded Trade Unions in America. Trade unions moved from being virtually outlawed by the US Government to being the beneficiaries of their legal protection. Morgan Reynolds tells us, in his Power and Privilege", the common definition of Labor Union in the American dictionaries is an organization of workers formed for the purpose of advancing its members interests in respect to wages, benefits, and working conditions, through the process of collective bargaining". (33) This definition is an all encompassing one that justifies the existence of unions. Assumptions must be made by unions and the union members that these items are not being provided for by the employer and therefore require an organization, the union, to fight for them.
This definition describes a Good Guy / Bad Guy relationship between worker and Employer, that I believe is too simplistic. Both Union and Management act in a checks and balance relationship that is difficult to describe. We must take specific points of concern and describe the benefits trade unionism brings to the table. Union Approach Wages Trade unions are filling a need of the American worker just as much today as they did 30, 50 or 70 years ago. Unions historically have represented the workers who were from manufacturing, Blue Collar, job classifications. These workers are not being paid an equitable share of the profits that corporations are making.
The disparity between the union worker and the management personnel is ever growing. The AFL-CIO News dated June 28, 1996 describes an incident where Steelworkers were locked out of a Common Wealth Gas plant for turning down a contract calling for more than 50 concessions while two weeks previously management was given 3 million dollars compensation. This occurred while the company was making a record 54 million dollar profit. (2). It follows, when considering the previous statement, inequities in pay are as prevalent in 1996 as they were in 1926. Unions are needed to lessen these inequities by fighting for workers wages.
In Richard Freeman's, What Do Unions Do, he states, "Union membership advances pay treatment for groups that are historically the least paid. There is a wider disparity in the wages of Union vs. non Union workers among the following groups. The young, who are the lowest paid, the worker with least tenure, non whites and women". (47). The last groups mentioned, non whites and women are making up more and more of the American work force. The following is from an AFL / CIO news release dated April 18, 1996.
"Of the 100 million women 16 and older in the US, 60 million are in the work force". The statement goes on to state, Woman that work in union jobs earn on average $145 more each week and have better job security, training, and promotional opportunities, health care and pension plans. (1) Benefits Fringe Benefits are an ever increasing part of the employees compensation package. Freeman and Medoff states, in What Unions Do, "In 1951, 17 percent of the compensation of American blue-collar workers consisted of fringe benefits, defined as employer payments beyond money wages.
In 1981 that figure had risen to over 30 per cent". (61) These increases are a direct result of union representation and the collective bargaining process. With the ever spiraling cost of health care in the United States more and more companies are looking to share this cost with the union represented workers. In 1985 NYNEX implemented a FLEX policy of health coverage for their management workers. This policy required management to share that cost. In 1990, NYNEX attempted to institute that same policy to its organized workers represented by CWA.
A six month strike ensued which was finally resolved with NYNEX withdrawing the Flex Medical policy from the negotiation table. It was CWA's active protest, through a work stoppage, that prevented this policy from being instituted. Unions are intensely opposed to employee paying for medical. Daniel Mills tells us in, Labor Relations, "employees cannot afford to make contributions or pay deductibles. Employees should be encouraged to get health care, not given incentives to avoid it".
(552) Working Conditions In the turn of the century the working conditions of the American worker were appalling compared to today's standards. Child Labor was accepted as evidenced in the Coal Mines and sweat shops of Pennsylvania and New York. There were no guidelines or regulations defining acceptable work hours or duration. Safety in the work place was governed at the whim of the employer. Federal laws were implemented in an attempt to eliminate these abuses inflicted by non scrupulous management.
Unions would argue that regulations are not enough to deter these abuses. The unions are the mechanism by which these well intentioned regulations are enforced. The unions are the whistle blowers who police the regulations governing the work place. Without union representation, these blatant violations of law would be a constant. The garment industry, utilizing poor immigrant workers, is a prime argument for the need of present day union representation.
OSHA, the government agency established to oversee safety conditions at work locations, is being scrutinized by federal regulators. The AFL / CIO news reports congress is pursuing making OSHA a consulting organization rather than a regulatory one. Unions view themselves as a strong lobbying force which will fight this latest trend. Management Approach Corporations and the management teams that run them, exist for the primary purpose of making a profit.
These corporations are not social entities who exist for the betterment of there work force. Rather they are business entities that exist for the financial betterment of the owners and share holders. The interest of the business in many cases goes against the interest of the union. One is concerned about maximizing profits to the business the other is concerned about maximizing profits to its members.
Wages While it is true that union workers have better wage scales than their non union counterparts, it must also be understood, at what cost this occurs. There is not an unlimited supply of moneys that an organization possesses. Union contracts by their nature are not open to discussion before the end of the contract. Unions themselves are not open to the concept of give backs, regardless of how the corporation is performing. Unions members are more likely to retain negotiated treatments, to the detriment of their fellow workers, rather than give these up.
Morgan Reynolds states, in Power and Privilege", Union pricing tends to increase the average level of unemployment among non union workers. The average level of unemployment among union members also is higher because of the inflexibility of union pricing". (165) What this means is many unions would rather except temporary layoffs than concede bargain for wages and benefits. The inflexibility of Unions to respond to economic crisis, ties the hands of many employers and prevents them from quickly responding to market conditions. The ever increasing union pay requirements become an a catch 22 situation without end. Unions demand pay increases, corporations raise associated costs to pay for them.
The same union members demand more increases to keep up with the corporations increased prices. Benefits An ever increasing proportion of compensation goes towards fringe benefits. These benefits are no longer considered as a luxury provided in excess of wages but rather as part and parcel of the compensation package. Unions treat this as a requirement not a benefit. Unions are as inflexible with benefits as they are with wage.
The most pressing issue concerning business today is the rising cost of Health Care. Many of the unions are unwilling to absorb this ever increasing cost. Companies are being expected to pick up the cost regardless of circumstance. An argument can be made that the unions, by increasing wages, is at the same time taking non wage benefits away from there workers. Working Conditions One of the primary reasons Unions were formed was the need to protect workers from unsafe, unsanitary, hostile working conditions.
With the ever increasing regulatory nature of Federal, State and Local government, this need has been removed. Federal laws dictate wages, such as the minimum wage law, OT compensation. The Fair Labor Standards Act, dictates payment for many workers beyond the 40 hour per week. Safety concerns in the work place are regulated and inspected by OSHA. Currently OSHA inspect millions of work places each year and levies fines against companies who fail to follow federal guidelines. Many would have you believe the vast amount of government regulation concerning wages, benefits and working conditions, has made the need for unions obsolete.
Goals Jonathan P. Hiatt General Council of the AFL / CIO states in his article for the AFL / CIO news, Union Survival for the Twenty-First Century, "the labor movement must develop strategies that respond to two trends which together are wreaking havoc on the lives of working men and women". (1) The trends he speaks of are the ever increasing gap between the high paid skilled worker and the low paid labor. The latter comprises most of our work force and is the lower educated members of society. The second trend is the trend to hire what is perceived as a temporary work force.
It is the goal of unions of this nation to organize and represent these temp workers. They are viewing the hiring of these " peripheral workers " as a company ploy to exploit American workers. Trade unionism in America is committed to continuing its role as a bargaining agent for "core" workers while it seeks to organize this new temp worker. Management's long term goals must be to guide American industry into the Global Market place while being as competitive as possible.
We must do that while maintaining an ethical treatment of our work force. Management for the twenty first century must change the work force policies it has implemented towards the end of this century. We cannot show the disregard of our work force that reaped havoc on so many of our workers. American Industry cannot succeed without the cooperation and loyalty of its workers. An absolute goal of both management and Unions must be a cooperative open dialogue. The adversarial, confrontational relationship must be replaced by one of a common direction.
America is no longer faced with an internal marketplace. Most all goods and services can be produced cheaper and just as easy abroad. Labor and Management alike must develop competitive techniques which can compete in a global market place while providing the benefits and compensation we have all come to expect. Compromise Jerry Borenstein makes an excellent point in his book Unions in Transition. In it he states, "Perhaps nothing better illustrates the profound changes in the role of unions in society today than what has happened in the auto industry itself. The current President of the UAW, Doug Fraser, has been elected to the board of directors of the Chrysler Corporation".
(13) This exemplifies the need for Union leadership and management to coexist and ultimately succeed. Management needs to understand the changing nature and demographics of its work force. It needs to address the social issues that in previous generations it did not have to be involved with. It has done so as exampled by the implementation of child care programs, dependent care accounts for elderly family members and flex time for varying needs modern family life demands.
Unions on the other hand need to take responsibility for the overall success of the companies that employ their members. We are beginning to here signs of Union leadership working in a cooperative partnership rather than an adversarial one. The key to success is the partnership of both factions towards a common goal. It is my belief that Unions are every much a needed force today as they were 100 years ago. If left unchecked corporations will continuously breech the line of ethical treatment of workers. This is evidenced by the maltreatment of much of the management work forces of the downsized corporations.
Because of the lack of solidarity and representation, much of the management work force of such companies as NYNEX, IBM and others have been thrown to the wolves after long tenures of service. Unions provide a means of checking the uncontrolled power of large corporations. This is not a one way street, though. Unions must come to terms with the public perception of them as money grabbers with criminal leadership. They must do all they can to cleanse themselves of corruptness.
Else they will drive themselves out of existence. This will be to the detriment of the American Society as a whole.
Borenstein, Jerry. Unions in Transition. New York Simon ans Schuster. 1981 Reynolds, Morgan.
Power and Privilege. New York. Universe Books. 1984.
Freeman, Richard. Medoff, James. What Do Unions Do. New York. Basic Books. 1984.
Quinn, Daniel. Labor Management Relations. New York McGraw-Hill. 1994 Hiatt, Jonathan.
Union Survival Strategies for the 21st Century. on-line http//aflcio. org / publ /press 96/pr 03203. html March 1996.