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Wednesday, August 17, 2011

Essay on Pros and Cons of Labor Unions

The right to self-organization is the right of every worker, free of any interference from the employer to form, join or assist in the formation of, any legitimate worker's organization, association or union of his or her own choice.  The reason for granting this right is grounded on the inherent inequality in the bargaining situation between an employer and his employees.  Insofar as the issue of employment bargaining is concerned, there is no doubt that the employer stands on higher footing than the employee.  Firstly, there is greater supply of labor than the demand for labor.  Consequently, the employer has the option to impose demands upon his employees.  Secondly, the need for employment by labor oftentimes arises out of desperation and necessity. 

As a result, the labor must protect labor to the extent of raising him to equal footing in bargaining relations with his employers and to protect him against abuses.  This is in recognition of the principle that those who have less in life should have more in law. 

The right to form unions is a tangible manifestation of the protection accorded by law to labor.  By giving employees the opportunity to unite themselves against the employers, they can negotiate with their employers for better wages, benefits and terms and conditions of employment.  Indeed, there is no better vehicle for securing change in the workplace than the employees’ union.  When employees form or join unions, they act as one and the management gets to hear their voices and their demands.  Labor unions therefore serve as vehicle for the employees to demand change in the workplace. 

One of the contributions of the labor unions is that they have helped increase the wages of the working class (“What did the Unions Ever do for us?” 2001, p.1).  In every workplace, two competing interests are involved: the interest of the employers who desire to minimize their overhead expense and earn bigger profits and the interest of the working class who desire to have a decent salary commensurate with his costs of living.  A worker cannot just demand individually that he desires a raise because of the economic reality that he has no bargaining power.  However if he joins a union together with his other co-workers, they strengthen their bargaining power because of their capacity to conduct a mass action such as strikes or picketing which could hamper the operation of the company.  Research shows that from the 1990s that unions raise the wages of unionized workers by roughly 20% and raise total compensation by about 28%.  (Lawrence Mishels & Matthew Walters, 2003, p.2)  Research also shows that there is a significant difference between the wages being received from unionized workers and non-unionized workers and that the former exceeds the latter’s earnings by 15% (Mishels and Walters, 2003, p.2).

Unions help in the reduction of the inequalities in the workplace.  It is a reality in the workplace that the managers receive substantially higher wages than the rank and file employees.  The latter are the ones who are replaced every six months and they do not have benefits similar to that enjoyed by the managers.  Indeed, there exists a significant gap between the wages earned by managers and rank and file employees.  In a study conducted by Freeman (1980), it states that unions reduce wage inequalities because they raise wages more at the bottom and in the middle of the wage scale than at the top (Mishels and Walters, 2003, p.4). 

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Unions do not only help in raising wages but they also help in the improvement of benefits.  It bears stressing that it is not enough for an employee to receive his wages but he must also be given the proper benefits such as payment for overtime work, maternity leave for mothers, monetary compensation upon retirement, and monetary compensation upon separation from the company and pension plans.  The unions have also helped the workers by negotiating with the employers for better non-wage benefits.  

On the other hand, some may consider that the strength of labor unions is also their disadvantage.  Consider, for example, the strike action which is a right to conduct concerted action of employees through temporary stoppage of work due to labor dispute. It is the strongest weapon that a labor union may resort to in order or ventilate labor demands. Since it is a powerful right given to a legitimate labor union, the labor laws ensure that it will be properly and reasonably used in accordance with the prescribed rules.  It must however be emphasized that not all strike actions result in the employer giving in to the demand of his employees (“Disadvantages of Union Representation, 1999, p.2).  The employer usually looks for other employees to replace employees who are on strike. The employees lose their daily wage with every passing day that the employees go on strike.  In some instances, employers are able to terminate the services of the workers who go on strike. 

Point of View of the Employers

On the part of the employers, they see unions and union membership as an added cost for the company that may threaten the financial stability of the company.  On one hand, it may be true that membership in unions may threaten the company.  Unions demand for higher wages, better benefits and improvement in their terms and conditions of employment.  This spells added overhead cost for the company.  The employer may either give in to the demand or strive to achieve a compromise with the employees. If they refuse to heed to the demand, the company may face the possibility of the employees going on an organized strike which may severely paralyzed the company’s operations. 

On the other hand, employers oftentimes do not see the benefits of respecting the presence of unions within the company.  Employers should not perceive union as a threat to the continued existence of the company rather, instead of trying to evade unions and attempting to defeat the formation of unions by closing companies at the first sign of union membership, companies must learn to work with the unions.    According to Policy Studies Institute, “workplaces with a union presence are much more likely to have a range of "high performance work systems", which are at the centre of firms' drive to increase productivity and customer service. These systems include two-way communications, team-working, staff incentives, interchangeable employees, and continuous training and development” (“Unions benefit employers as well as employees”, 2005, p.1) 
For example, the presence of unions within a company means that the employers can work with them to communicate important company policy.  Unions may help in information dissemination campaigns of the company.  Also, even if unions negotiate for better working conditions and higher wages for employees, this eventually leads to improved performance on the part of the employees, loyalty, higher productivity, lesser turnover and increased morale which are beneficial for the company (James Arrowsmith, 2007, p.1). 

Based on the analysis conducted, it is clear that unions are beneficial for the interests of the employees and the employers.  Though there are advantages and disadvantages for either side, the result of the analysis will reveal that over-all unions have made tremendous impact for the lives of the working class and the economy as well.  They not only helped in the improvement of wages and benefits of employees, they also have empowered the workers by giving them a voice in the formulation of policies of the company.  Indeed they were instruments in helping bring about profound changes in our country today.  Despite all these changes, the working class is still faced with many challenges and obstacles brought about by globalization.  Among these challenges are: the rapid downsizing of companies, the transfer of work to another country because of cheaper labor.  The battle therefore is not over for the working class.  They must not be overcautious about the existence of laws that will protect them against abuses by their employers.  They must remain vigilant in the protection of workers’ rights.

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