Are Labor Unions a Good Thing?
Overview/BackgroundLabor unions are binding agreements between workers where a selected group of representatives speak and negotiate with management on behalf of all employees. They usually require some periodic fee ("union dues"), with some professions or companies requiring membership in order to take a position. A "closed shop" requires union membership to obtain the job. An "open shop", which is more rare nowadays, gives an option of joining.
Labor unions exist all over the world. They became popular in the era of the Great Depression, when companies regularly abused workers with low pay, long hours, unsafe working conditions, few (if any) fringe benefits, and condescending treatment. The Knights of Labor, Railroad Brotherhood, and Teamsters are among the unions from our history. Despite efforts of many business owners such as Henry Ford to squash their creation, labor unions grew as a way for employees to collectively bargain for better pay, benefits, and working conditions. Unions have always been able to use the ultimate power play--a strike--which can effectively shut down all production.
Unions have largely been successful in their efforts to help workers. Nowadays a host of labor laws exist, such as a minimum wage, mandatory overtime pay, and minimum breaks. However, unions have had a host of negative impacts on society, as are discussed below. The issue of unions has become particularly important nowadays as governments all over the world try to rein in unsustainable spending by cutting back benefits of mostly unionized government employees. The governments of France and Greece are recent examples. In the U.S., the standoff between Scott Walker of Wisconsin and the state unions there touched off a controversy that dominated the national news.
Unions protect workers from various company abuses such as
unsafe/uncomfortable working conditions, long hours, arbitrary hiring & firing, and so on.
In a rough economy, with workers needing their paychecks to pay for mortgages, food, car payments, etc., employers hold a lot of power in the employer-employee
relationship. Consequently, management can pretty much set the rules on work environment. They can set impractical hours, create unrealistic work quotas,
require work on holidays, fire & hire based on personalities, and so on. One individual often has very little bargaining power since they can easily be
replaced. However, a group of abused employees can ban together to prevent management from
carrying out such abuses. Unions became popular during the Great Depression,
when a terrible economy allowed employers to essentially treat employees however they wanted. One of the most terrible work environments in American
history was the result before unions came along.
They give workers a chance to speak at the same negotiating & power levels of the managers and owners.
One employee in a company of hundreds, if not thousands, of employees, usually has very little bargaining power. This is especially true when you consider the
widespread unemployment around the world, along with the decline of wages. For most positions, one employment position is just an interchangeable part
where another person can be brought in to fill the gap if a person quits. Thus, management doesn't always see the need to create a work environment that's
favorable for employees. However, when workers ban together, they can wield the ultimate labor weapon--a strike. If one person walks off the job, it may
be no big deal. If everyone walks off the job, it more or less shuts down production and incoming-generating ability of the company. Even if all the striking
employees can be replaced, it's costly and time-consuming to do so. Thus, labor can talk at the same negotiating level as management. Both sides need
each other equally, and both sides will be equally hurt by a dispute.
They allow workers to collectively bargain for wages, benefits, an acceptable work environment, and more.
Unions allow employees to appoint or elect representatives that go to management and negotiate for all workers at once. Union reps can meet regularly to
talk about wage levels, fringe benefits, and so on. The union also allows management and labor to sign contracts which put their negotiations on paper, a step
that may be impractical on an employee-by-employee basis.
Unions prevent managers from having to address worker grievances one-by-one.
Managers have their hands full trying to take care of marketing, production, competitor analysis, accounting, taxes, and so many other items. It's often unrealistic
to take the time to address each employee grievance with wages, benefits, work atmosphere, etc.. A
union allows management
to address grievances of employees as a group, reducing time and stress on both sides.
Unions give workers more job security and piece of mind, reducing the stress of possible layoffs & wage/benefit cuts.
Members of unions are usually your every-day, middle-class individuals trying to make a living. Among other costs, they must pay mortgages & car payments,
put food on the table,
and pay to send their kids through college. It's difficult and stressful to plan for the future when you're not sure if you may lose your job in the near
future, or if your wages, health care benefits, or whatever may be cut unexpectedly. A union allows contracts to be signed to give employees piece of mind
that such things won't happen. Management can't just change employment on a whim when union power is protecting the workers.
Unions create a stable, long-term employment relationship between company and employee, which is good for both.
Union positions are usually stable and secure; thus, employees have more incentive to stay, to develop solid relationships with co-workers, and to
do their best to make sure the company thrives. On the employer side, more stable employment means less time training new employees and less time
Unions lead to higher prices for consumers since companies must pay more for wages & benefits, which are then passed on to customers.
The cost of labor is like any other for a business. It must be added to the expenses part of the income statement, which leads to reduced profit
margins or losses unless prices can be raised to pass the costs onto consumers. Thus, when we buy American cars, purchase plane tickets, or buy
any other product that comes from a unionized business, we all pay more at the cash register.
Unions make the country less competitive since non-unionized companies in India, China, Taiwan, etc. can pay workers far less and therefore
charge less and/or assign more workers per unit of product.
We're no longer in a national economy, we're in a global one. Products & services which could be developed in America are now being made more cheaply
in foreign countries, most notably India and China, which have vast pools of cheap labor. Saddling an American company with an unrealistic
and inflexible labor cost per hour effectively makes it impossible for some companies to compete. For example, American automakers now must pay
two-three times that of automakers in Japan,
mostly because of union-required
wages and benefits. In fact, China is now predicted by the
IMF to pass the U.S. in economic power within 10 years. It's no wonder, when the American versions of the companies cannot
compete on cost control.
Unions often prevent more qualified workers from getting the jobs. Less proficient workers are often protected from layoffs or firing; thus, new positions
open less frequently.
Union contracts and protections often tie managements hands when it comes to replacing workers. Many employees are simply inferior at their job, whether it's
lack of motivation, education, or natural abilities. Given the huge unemployment & underemployment rate of today, there is always a pool of potentially
more talented or motivated workers that may be able to do the job better. Consider one of the most obvious examples--teachers. Teaching unions and the
"tenure" system keep many poorly performing professors on the job far too long. This is only one of the reasons, despite leading the world in educational
investment dollars, the U.S. has fallen behind much of the
world in academic achievement. Meanwhile, every year colleges graduate tens of thousands of bright, motivated, technologically savvy, and well-trained
Education graduates who can't find jobs. It's not only affecting the teachers but the ultimate product in this equation--the students and future of
the country! On a lesser scale, the inability to replace less proficient workers hurts the U.S. in global competition since it drives up costs
and decreases quality of products and services.
Society and companies are often held hostage to the essential services of certain unions (e.g. teachers, police, construction workers,
air traffic controllers, etc.); thus, negotiation becomes less about fairness to workers than about
companies meeting the demands of union extortion.
Certain unions yield way more power than that of shutting down for-profit production. That is, they can hurt society as a whole if they stop working.
Imagine major highways under construction being shut down by striking workers. Imagine the crime and rioting if police walked off the job. Imagine
all air traffic coming to a halt if controllers held out for more pay. The bargaining then becomes less about giving employees'
deserved wages & benefits and more about paying off extortion. Companies or government offices have little choice but to concede
to the demands, or society as
a whole suffers the consequences. And who do you think the media will portray as the "victim" and the "evil, greedy" sides? The police, teachers, and
other essential workers on strike, or the deep-pocketed companies & government officials trying to balance budgets or sustain minimal profit levels? In
other words, responsible government officials or managers trying to keep their businesses from collapsing are the ones blamed, regardless of the
cause or outcome,
adding even more fire to the extortion racket.
This is one key reason of many why government spending all over the world is completely out of control and unsustainable.
The State and Federal labor/discrimination laws, the threats of lawsuits, and the avoidance of poor publicity all make unions largely unnecessary nowadays.
Unions were definitely a necessary & useful part of society back in the early part of the 20th century when companies routinely paid employees low wages and
did little to curb brutal working conditions. However, in the 21st century, unions have become
outdated, burdensome, and unnecessary. Labor & discrimination laws at both the state and federal level nowadays provide all the worker protections that
are needed. Consider all the laws that protect workers: minimum wage; mandatory vacation, breaks, overtime pay; anti-discrimination & disability laws;
mandatory family leave; COBRA health care for laid-off workers; unemployment insurance, and so on. Plus, where state & federal laws fail, each
individual has yet another
option--lawsuits. Ask any human resources professional of any business of significant size if they have controls in place to prevent possible lawsuits. It's
a worry all corporations must deal with. Lastly, corporations must also worry about their reputation. If their company gets a reputation as a sweat shop, as
discriminatory, as greedy profiteers, etc., it hurts their bottom line. Management is smart enough to know that happy workers lead to more productivity and
better sales. They don't need the union waving a stick at them to get them in line.
Unions lead to job losses to India, China, and other overseas companies. Non-union shops have a major cost advantage in hiring. Plus, in unionized
companies, owners & managers may simply choose not to hire at all since the cost of maintaining or laying off a new employee is too great.
Due to lower standards of living and higher unemployment, many overseas companies are starting to take jobs from America, Europe, and Japan. Average
hourly wages in India and China are already 10-25 percent that of most Western Nations, and union-enforced
wage floors only make matters worse. No wonder China and India are growing so quickly! The high costs of hiring and maintaining unionized employees
often simply becomes a deterrent to hiring. Despite economic recovery in 2010 and 2011, hiring remains slow in America, in large part due to the high
cost of bringing on new workers.
Unions have become a source of political power and corruption. Since unions can offer a large block of voters, politicians will often curry favor from unions
and screw over the taxpayers. Consequently, union representatives concentrate on helping their favorite politicians and political party rather than doing what's
best for the members.
It's no secret that unions are regular contributors to all levels of the Democratic, Communist, Labor, and Green political parties. Union leaders have
the ability to convince their members to support certain candidates, as well as the organization structure to get groups of voters to booths on election day. Thus,
certain politicians go out of their way to court unions. President Obama's connections to SEIU are well-known, and his governing reflects it. As an example, consider recent
union exemptions in the health care bill. Countless
books have been written about the political corruption of unions. Taxpayers, consumers, and often the union members themselves are the victims.
It prevents the firing of clearly incompetent workers. Several poorly-performing teachers on tenure as well as most government workers are clear examples.
Have you ever been waiting in line at a government office while three workers laugh & talk amongst themselves? Have you ever had a teacher who uses videos
to do all their teaching, or does nothing more than read from the text for
his or her "lectures"? These are only a couple of the examples of clearly incompetent
employees with low motivation who remain on the job because union rules make them too difficult to fire. Is it any wonder why governments continue to
waste endless sums of taxpayer money on programs that show little or no results? Is it any wonder why the U.S. is so far behind academically behind many Asian
nations despite spending far more on education?
Unions lead to less productivity and job motivation since pay levels are usually determined by seniority rather than performance. The lack of incentives such as
increased pay or promotion, as well as the lesser threat of losing their jobs, leads to workers putting out less effort than they otherwise would.
Every person has in them endless potential. Every person also has an element of laziness in them. So what makes us
do a great job? Incentives! Higher pay,
promotion, career advancement, accomplishment of something worthwhile are all examples. Conversely, what makes us go through the motions and not try very
hard on the job. Answer--no incentives and/or little chance of losing your job! Union shops take out both side of the equation. Wages are normally set
at tiered levels based on seniority, not performance. Be honest, if you had little or no chance of higher pay & promotion, and little chance of losing your
job, would you put out your best effort? Now imagine hundreds of thousands of employees with the same mentality!
It creates an "us" vs. "them" hostility between ownership and workers.
Labor unions create an artificial division between management and employees instead of what should happen, that is, both sides working together to make the company
as good as it can be. Collective bargaining creates that "us" vs. "them" mentality, where individuals must take sides. Thus, if an employee disagrees with
the union positions, he or she will still go along with it because they don't want to be perceived by co-workers as "not on our side".
Unions focus on the needs of the members at the expense of non-union members & society, as evidenced by labor unrest all over the world as governments
try to rein in unsustainable spending.
Governments of France, Spain, and Greece, as well as smaller governments in California, Wisconsin, and Massachusetts all illustrate recent examples of
unions putting the good of their members ahead of society and the world as a whole. Government spending is out of control and completely unsustainable.
Unrealistically high pensions and other benefits cannot be paid indefinitely without incurring further debt or taking resources from other areas like education
and defense. However, any reasonable attempt to rein in these costs leads to protests, riots, strikes, and other labor unrest.
For many types of jobs, union membership is required for the position, along with substantial cash dues on a regular basis. This is inherently anti-freedom.
Teachers, police, auto-workers, other AFSCME employees, and more are forced to join unions and forced to pay union dues if they want to keep their jobs.
Is there anything more un-American and anti-freedom? Employees voluntarily banning together to form a union is one thing. Places that force
union membership smells of corruption and/or communism.
It decreases the flexibility of both employee and employer in negotiating wages, benefits, and other items. Especially with the technological advances of
today and multi-working families, employees often want to customize work hours & location, fringe benefits (e.g. more vacation time, no health insurance),
and pay (e.g. per hour or per project vs. salaried). Unions tie the hands of both employee and employer in such situations.
All of us have different family situations, different goals, different motivations, different needs & wants. So why should we apply a one-size-fits-all
employment situation to an entire work force? Some of us may want more vacation time; some of us would rather have more money. Some of us would like to
work four 10-hour days rather five 8-hour days. Some of us would want to work from home a couple days per week, which should easily be an option in most
office settings given technological advances. Some of us would prefer incentive-based pay, while others want a steady, predictable paycheck. Some of us may
want to work 80-hour weeks for six months of the year and take the other six months off to travel. The examples are endless. Unions make these kind of
flexible arrangements nearly impossible. BOTH management and employee may desire different agreements, but union rules tie their hands.
Unions have in the past had ties with organized crime or communist organizations, which are fundamentally trying to harm the nation's free market system.
The ties throughout history between unions and organized crime are well-known. Jimmy Hoffa, Al Capone,
Andy Stern...any Google search connecting unions and corruption with turn up hundreds of thousands of links. Even the Corleones, in one of the most
famous mob movies of all time, the Godfather, famously discussed how their two biggest revenue generators were gambling and unions. Also,
communists are prevalent throughout the
history of unions and labor unrest. Communists feed on unrest of society, stirring up trouble in an attempt to undermine the entire Western
capitalistic system. They're all too willing to throw a wrench in things whenever possible. Look into the next major labor or other protest. They almost
always have some kind of communist front organization willing to call in trouble makers.
Unions reduce the investment dollars that are put into a company since investors are less willing to take on the risks of work stoppages, higher costs, decreased
management flexibility, etc.
Every business must rely at some point on an influx of capital investment dollars. People that do the investing mainly consider potential rate of return and the
risks of losing their money. They analyze interest rate and other macroeconomic risks. They analyze cash-flow risks, competitive risks, and a host of other
risks. Additional risk means they want higher potential return or they'll put their money elsewhere. Unions add another element of risk, since management has
less flexibility to hire & fire in testing new markets. They have a floor of wages that can't be crossed. They must deal with the risk a strike may shut down
production and all revenue-generating capability. On the flip side, unions cut into potential profits. When you add it all up--more risk, less profit potential--
investors often take their money elsewhere. Consequently, the company suffers as a whole. And the unionized workers so anxious to hang onto their jobs
may end up laid off since a potential expansion opportunity was thrown out due to lack of capital.
All employees have one bargaining chip that never requires a union--they can quit and go work somewhere else.
A common whine among political opponents that union supporters spout out is "Workers have no ability to bargain without a union." That is simply NOT the case.
Every employee ultimately has the ability to take their skills and abilities elsewhere. It's the ultimate bargaining chip. Why do you think that over 90 percent
of American jobs pay more than the federally-mandated minimum wage? It's because employers know they won't retain their employees for very long if they
don't pay a marketable wage. The same goes for working conditions, benefits, respectful treatment, etc.
Related LinksWhat Unions Do: How Labor Unions Affect Jobs and the Economy
Labor Union Resources
Labor Unions: Concise Encyclopedia of Economics
Unions Pros and Cons
Ehow.com: Pros and Cons of Labor Unions
Pros and Cons of Labor Unions at Work
Labor Unions in America: History, Pros, Cons, and Resources
Written by: Joe Messerli
Page Last Updated: 01/07/2012
Reader CommentsMy name is Erick Orantes. As a President of my debating society and political science major, I laud your website as a magnificent tool for all people to use for not only statistical data, but philosophical points as well. I always use your site as a point of reference on how a argument is structured, as it has become a vital resource for my debates.
With that in mind I noticed the points within the Union section ( Are Labor Unions a Good Thing) that may be added to the "yes" side to make the article more balanced (since there is only 6 for yes, and 16 for no). Hopefully this is a working progress for you, as i truly admire your site for being very bipartisan when presenting both sides of the issue. Please consider the following points:
- Unions protect and sustain a middle class within a
capitalistic economy (http://www.calaborfed.org/index.php/site/page/study_decline_in_unions_a_leading_factor_in_income_inequality/)
- Unions protect workers from harassment/unfair treatment that some governmental regulations may overlook
- Unions provide resources to workers (legal information, political networks, access to a lawyer, etc.) that they may not have on their own
- Unions make a workplace sustain a system of merit rather
- As a business/company's main purpose is to make a profit, a union makes sure that workers are in corporate decisions when managing profits
- To stop unfair conditions, unions have the power to protect workers' rights through peaceful means, rather than having employees accepting them
- Unions protect workers for doing extra duties that may not
have been disclosed to them before acquiring a position, putting themselves
- Counties that do not support unions are often from the second world, struggling with major social issues
- Unions stop corruption within private industries
- Unions illuminates plights that society may not know of