Get United Organized Labor Economics LAP 5

Objectives Explain the purpose(s) of labor unions. Describe the impact of organized labor on employees and businesses.

Objective Explain the purpose(s) of labor unions.

• Workers today receive: Ø Needed safety equipment Ø Appropriate break time Ø Fair wages

• This wasn’t the case 150 years ago! • The change is due to organized labor.

Labor Unions • A group of workers who have joined together for a common purpose to improve the terms and conditions under which employees work • Represents all employees as one single entity before management

Labor Unions • U. S. membership on the decline since about 1970 • 13% of the workforce remains unionized. • Level of unionization depends on industry & geographic location.

Labor Unions • Three purposes: Ø Organize workers into single bargaining unit Ø Negotiate labor contracts Ø Ensure labor contracts are carried out

Three Types of Labor Unions • Craft unions: Ø Also known as trade unions Ø Skilled laborers working in specific occupations

Three Types of Labor Unions • Craft unions: Ø Examples: § Plumbers § Carpenters § Electricians

Three Types of Labor Unions • Craft unions: Ø Membership is based on degree of skill and experience: § Apprentice—beginner § Journeyman—trained & licensed § Master—skilled supervisor

Three Types of Labor Unions • Industrial unions: Ø A wide range of laborers across an industry Ø Examples—United Auto Workers (UAW) Ø Advancement depends on seniority.

Three Types of Labor Unions • Professional unions: Ø Common in the public sector Ø Examples—teachers & nurses

Levels of Union Organization • Local union: Ø Chapter of national or international union that represents workers at a specific company or in a specific geographic area Ø About 60, 000 in the U. S.

Levels of Union Organization • Local union: Ø Responsible for: § Electing officers § Scheduling meetings § Providing membership services § Engaging in community activities

Levels of Union Organization • National/International union: Ø Provides leadership for local unions Ø Assists in contract negotiations Ø About 75 in U. S. & Canada Ø Example—American Postal Workers Union (APWU)

Levels of Union Organization • Federation: Ø Consists of several national unions of different kinds that join together to further their common purposes

Levels of Union Organization • Federation: Ø Two in U. S. : § AFL-CIO § Change to Win Coalition • Unions not in a federation are independent unions.

Labor Issues Addressed by Unions • Wages Ø #1 source of conflict between unions and management Ø Unions—seek higher wages & cost-ofliving adjustments Ø Management—seeks to reduce labor costs

Labor Issues Addressed by Unions • Benefits Ø Overtime pay Ø Vacation pay Ø Sick leave Ø Health & life insurance Ø Unemployment compensation Ø Pension plans

Labor Issues Addressed by Unions • Job security & seniority: Ø Seniority ratings Ø Protection from lay-offs Ø Rules for terminating employment Ø Grievance procedures

Labor Issues Addressed by Unions • Job security & seniority: Ø Disciplinary procedures Ø Protection from losing jobs to automated technology Ø Protection from losing jobs to outsourcing

Labor Issues Addressed by Unions • Working conditions • Hours

Labor Issues Addressed by Unions • Union security: Ø Union shop—all employees must join the union Ø Agency shop— employees don’t have to join the union but must pay dues Ø Open shop—employees don’t have to join the union or pay dues

Labor Issues Addressed by Unions • Management rights—what rights will management retain in the labor contract (hiring, firing, etc. )?

Objective Describe the impact of organized labor on employees and businesses.

Collective Bargaining • Collective bargaining—the process of negotiating a labor agreement between union and management

Collective Bargaining • Process consists of: Ø Preparation Ø Conducting bargaining sessions Ø Voting

Collective Bargaining • Process consists of: Ø Preparation § Conduct research. § Generate reports. § Set list of issues to discuss.

Collective Bargaining • Process consists of: Ø Conducting bargaining sessions: § Negotiate face-to-face. § Negotiate through written proposals. § Reach tentative agreement.

Collective Bargaining • Process consists of: Ø Voting: § If union members accept, labor contract becomes official. § If union members reject, new tentative agreement must be reached.

Pressure Strategies • Used when an agreement cannot be reached

Pressure Strategies • Union pressure strategies: Ø Strikes—union members refuse to come to work

Pressure Strategies • Union pressure strategies: Ø Strikes—union members refuse to come to work § Usually used as a last resort

Pressure Strategies • Union pressure strategies: Ø Strikes—union members refuse to come to work § Types: ü Wildcat—union strikes without authorization from national leadership ü Sit-down or sit-in— union members come to work but refuse to do their jobs

Pressure Strategies • Union pressure strategies: Ø Strikes—union members refuse to come to work § Types: ü Sympathetic—a local union strikes in support of another local union ü “Sick-out”—union members call in sick at the same time

Pressure Strategies • Union pressure strategies: Ø Picketing—union members march with signs near company entrance

Pressure Strategies • Union pressure strategies: Ø Boycotts—union members refuse to purchase company’s products and encourage others to do the same

Pressure Strategies • Union pressure strategies: Ø Corporate campaigns— union members disrupt shareholder meetings or buy up company stock to gain more control

Pressure Strategies • Management pressure strategies: Ø Lockouts: § Management refuses to let union members work. § Management may call in strikebreakers to replace union members.

Pressure Strategies • Management pressure strategies: Ø Injunctions—court orders prohibiting certain actions, such as picketing Ø Shifts in production— management moves production to another plant or out of the country

Non-Pressure Strategies • Mediation—mediator makes non-binding suggestions to union & management • Arbitration—arbitrator makes binding decision regarding labor contract

Impact of Unionism • Advantages for workers: Ø Higher wages Ø Better benefits Ø Improved working conditions

Impact of Unionism • Advantages for workers: Ø Increased personal dignity Ø Increased bargaining power Ø Fairer treatment

Impact of Unionism • Disadvantages for workers: Ø Union dues Ø Loss of individuality Ø Financial strain during strikes

Impact of Unionism • Advantages for businesses: Ø Security of a labor contract Ø Help with recruitment

Impact of Unionism • Disadvantages for businesses: Ø Increased costs Ø Decreased control Ø Loss of time & sales during strikes

• Is your state a right-to-work state or is it heavily unionized? • Are there any unionized companies in your town? • What national/international unions are represented? • How has unionization affected your community?

• Seniority—an important concept in unionized companies • Effects on management: Ø Takes away authority when it comes to promoting employees Ø Often must make decisions based on seniority rather than merit or ability

• Union says seniority system promotes loyalty by encouraging employees to remain with the company and build seniority. • What do you think?

MBAResearch Acknowledgments Original Developers Christopher C. Burke, Sarah Bartlett Borich, MBAResearch Version 1. 0

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