I.
Unionism in America
A. About 13.5 percent (16 million) U.S. workers belong to unions; most of the unions are voluntarily affiliated with the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO). (Global Perspective 35-1 compares U.S. union members with other industrialized nations.)
B. In the United States, unions have generally adhered to a philosophy of business unionism.
1. Concerned with the practical short-run economic objectives of higher pay, shorter hours, and improved working conditions.
2. Union members have not organized into a distinct political party.
C. The likelihood of union membership depends mainly on the industry: Membership is high in government, transportation, construction, manufacturing and mining; low in agriculture, finance, insurance, real estate, services, wholesale and retail trade. (See Figure 35.1a and b)
D. The decline of unionism.
1. Since the mid-1950s union membership has not kept pace with the growth of the labor force. Union membership has declined both absolutely and relatively.
2. The structural-change hypothesis says that changes unfavorable to union membership have occurred in both the economy and the labor force.
a. Employment patterns have shifted away from unionized industries. Consumer demand has shifted from unionized U.S. producers of manufactured goods to foreign producers. Also demand has shifted from highly organized “old-economy” unionized firms to “high-tech” industries.
b. A higher proportion of the increase in employment recently has been concentrated among women, youths and part time workers; groups that harder to organize.
c. A geographic shift of industrial location away from the northeast and midwest (traditional union country) to the south and southwest.
d. Union success in gaining higher wages for their workers may have given employers an incentive to substitute away from the expensive union labor in a number of ways.
i. Substituting machinery for workers,
ii. Subcontracting more work to nonunion suppliers,
iii. Opening nonunion plants in less industrialized areas, and
iv. Shifting production of components to low-wage nations.
E. Relatively high-priced union produced goods would encourage consumers to seek lower-cost goods produced by non-union workers.
F. The managerial-opposition hypothesis argues that union firms are less profitable than nonunion firms.
1. One aggressive managerial strategy has been to employ labor-management consultants who specialize in mounting anti-union drives.
2. Confronted with a strike, management is more likely to hire permanent strikebreakers.
3. Management may also improve working conditions and personnel policies to discourage union organization.
II. Collective
Bargaining
A. The goal of collective bargaining is to establish a “work agreement” between the firm and the union.
B. Union status and managerial prerogatives.
1. In a closed shop, a worker must be (or become) a member of the union before being hired. This is illegal except in transportation and construction.
2. In a union shop, an employer may hire nonunion workers, but they must join in a specified period of time.
3. An agency shop requires nonunion workers to pay dues or donate a similar amount to charity.
4. Twenty states have right-to-work laws that prohibit union shops and agency shops.
5. In an open shop, the employer may hire union or nonunion workers. Workers are not required to join the union or contribute; but the “work agreement” applies all worker – union and nonunion.
6. Most work agreements contain clauses outlining the decisions reserved solely for management; these are called managerial prerogatives.
C. The focal point of any bargaining agreement is wages and hours.
1. The arguments most frequently used include for wage increases are:
a. “What others are getting”;
b. Employer’s ability to pay based on profitability;
c. Increases in the cost of living; and
d. Increases in labor productivity.
2. In some cases, unions win automatic cost-of-living adjustments (COLAs).
3. Hours of work, voluntary and mandatory overtime, holiday and vacation provisions, profit sharing, health plans, and pension benefits are other contract issues.
D. Unions stress seniority as the basis for worker promotion and for layoff and recall and sometimes seek means to limit a firm’s ability to subcontract work or to relocate production facilities overseas.
E. Union contracts contain grievance procedures to resolve disputes.
F. The bargaining process.
1. Collective bargaining on a new contract usually begins about 60 days before the existing contract expires.
2. Hanging over negotiations is the “deadline” which occurs at the expiration of the old contract, at which time a strike (union work stoppage) or a lockout (management forbids workers to return) can occur.
3. Bargaining, strikes and lockouts occur within a framework of Federal labor law, specifically the National Labor Relations Act (NLRA).
35‑1 Other things equal, who is more likely to be a union member: Stephen, who works as a salesperson at a furniture store, or Susan who works as a machinist for an aircraft manufacturer? Explain.
Union membership as a percentage of employed wage and salary workers varies considerably from one industry to another. The union membership of machine operators is much higher than retail sales persons. Therefore, it is more likely that Susan is a union member than Stephen. (See Figure 35.1)
35‑2 Contrast the structural-change and managerial-opposition hypotheses as they relate to the decline in unionism. Which view do you think is more convincing?
According to the first hypothesis, unions’ relative decline in the past thirty years can be attributed to changes in the structure and composition of the American economy and labor force. There has been a significant shift in demand from the unionized manufacturing sector to the relatively nonunionized service sector. Domestic consumers have shifted their demand for manufactured products from U.S. firms to foreign producers. There has also been a significant migration of firms and labor from the unionized “Rustbelt” to the relatively nonunionized “Sunbelt.” Finally, women and young people, who have traditionally been difficult to organize, have been increasing their participation in the labor force.
The second hypothesis focuses on employers’ efforts to become or remain nonunion. Businesses have mounted concerted antiunion campaigns, encouraged decertification elections, and engaged in antiunion tactics that, though illegal, are difficult to prosecute. Employers have also improved wages and benefits to make the workers less likely to approach a union.
While the factors highlighted by the managerial‑opposition hypothesis are no doubt relevant in many instances, the first hypothesis would seem to be a more valid explanation. While managerial antiunion activity is important, particularly in certain industries, economy‑wide structural changes are continuous and wide‑ranging.
35‑3 Suppose that you are the president of a newly established local union about to bargain with an employer for the first time. List the basic areas you would want covered in the work agreement. Why might you begin with a larger wage demand than you actually are willing to accept?
Areas to be included in a work agreement:
1. Wage rates with automatic increases over time, preferably in the form of a cost‑of‑living adjustment
2. Regulations governing hours of work which ensure employees are entitled to paid vacation time and the choice to engage in overtime work at a substantial premium
3. A liberal fringe‑benefits package provided by the firm, including pension plans and job security provisions
4. Rules governing promotions, layoffs and recalls that are based on worker seniority
5. A stipulated grievance procedure with mandatory union participation in rulings.
6. A provision that requires all worker to join or monetarily support the union.
Asking for a higher-than-expected wage increase is a tactical decision. The law requires that bargaining must occur. The higher-than-expected-wage demand allows for the give-and-take of bargaining and for compromises in other areas of the initial proposal.