Contribution #6: Labor Relations and Unions (BUAD 336)

                Here in the United States, there’s an expectation of fairness when it comes to the workplace.  Everyone should get the same benefits and pay for the same work.  No one wants favoritism to occur, and people who slack off should be punished.  Fairness is the main reason employees join unions. 

                Unions tend to be a scary word for managers in companies, especially manufacturing companies.  The downsides of unions, such as higher wages, benefits, and limitations of work, make companies nervous.  All these things can affect the profitability of a company.  Also, some unions are too strong to be reasonable.  My dad once went to a different factory under the same company he works for.  This company’s employees were so protected by the union, my dad literally saw some workers sleeping on the job.  It was shocking to see such a thing.

                On the other hand, unions tend to make up for some of their downsides.  One way of doing this is by increasing the use of “voice” strategy instead of “exit” strategy.  This means employees are more likely to ‘voice’ their concerns or problems in the hope they can be fixed or reconciled.  Less people ‘exiting’ the workforce means decreased turnover.  Turnover has its own high costs.  Another way unions make up for union costs is by emphasizing seniority in pay and decision-making.  This makes older workers more likely to pass on knowledge they’ve acquired through the years on the job.  This in turn increases productivity all around.  Also, unions can be the kick in the butt needed by management to enforce safety regulations in the workplace.  The safer the workers are, the less likely it is that they will be injured on the job and incur the associated costs of that.

                The United Auto Workers recently had to go through another round of negotiations with the big three auto companies.  Some of the executive perks had to be thrown out, and some of the union benefits paid for by the company are being revamped in an effort to decrease the company debt.  There are painful concessions being made by both sides, but whatever the outcome, the workers are in good hands.