Labor Unions

I. Labor Union: an association of workers who bargain collectively with their employer regarding the terms and conditions of employment. This allows workers to speak as one.

II. Why unionize?

A.  Individual voices ignored

B.  Strength in numbers

C.  Better pay, working conditions, hours, benefits (health insurance, vacation time, etc)

Ultimate power of a union?

Strike: the refusal to work

III. Who is hurt by a strike?

A.  Company

~ No or lower profits, bad public image

B.  Employees

~ No work, no salary/wage

C.  Customers

~ Inconvenienced – especially if essential good/service

D.  Sometimes the community

~ Long industry-wide strike (especially in small towns) à lower income level à small shops hurt by less buying

IV. Company responses to a strike:

A.  Lockout:

~ Management tactic that prevents workers from working until agreement is met. Changes the psychology of the strike

B.  Hire scab

~ Replacement worker

V. Other union strategies (short of a strike):

A.  Boycott

~ Refusal to buy or patronize

B.  Picket

~ Demonstrating/protesting in front of establishment, holding signs, drawing attention to concerns

C.  Media attention

  1. Gives public “black eye” to put pressure on company to give in to labor demands

VI. Two Primary Union Types

A.  Craft or Trade union: organizes skilled workers employed in the same occupation or craft, regardless of where they work.

B.  Examples: unions of electricians, carpenters, and printers.

C.  Industrial union: organizes all workers in a particular industry, regardless of the tasks they perform.

D.  Examples: the United Steelworkers of America and the United Mine Workers of America (UMW).

VII. Decline in membership

E.  Union membership has declined from a high of 20% in the 1950s to 12.5% in 2005 to 11.9 in 2010

F.  Why?

  1. Primarily: Union success
  2. Increased politicization of unions (liberal political activism despite membership affiliation)
  3. Bad reputation

VIII. Collective Bargaining

Picketing, boycotts and strikes are the strategies of last resort. The first steps to having demands met by the company always starts with negotiations. It’s when those negotiations break down that more drastic measures are often taken.

A.  Collective bargaining is when representatives from labor and management meet to figure out how to come to an agreement

B.  If an agreement can’t be met, other tools can be used to reach a resolution:

Collective Bargaining Tools

1.  Mediation

~ Neutral 3rd party offers unbiased compromise recommendation that is unbinding

2.  Arbitration

~ Same as mediation, except decision by arbitrator is binding. Both sides are legally required to accept the decision or risk being sued for breach of contract.

3.  Fact-Finding

~ Third party investigates, collects facts, offers unbinding recommendation

~ Used when neither side trusts what the other is saying

Other times, the government intervenes (at one side’s request or independently)

1. Injunction

~ Court order to stop something. Courts can issue injunctions to end a strike

2. Seizure

~ The temporary takeover of a company’s operations to prevent it from shutting down.

3. Presidential Intervention

~ Reagan and the Air-traffic Controllers

Questions

  1. From where do unions get their ultimate power?
  2. What groups are hurt by a strike?
  3. What methods can be used by labor to persuade management to give in to their demands?
  4. What responses does management have to a strike?
  5. What is the difference between mediation and arbitration?
  6. What’s the difference between a trade and industrial union?
  7. For what two reasons has union membership declined?
  8. What is the difference between mediation and arbitration?
  9. Why would fact-finding be used to settle a labor dispute?
  10. Who issues an injunction?