Duffy 1 Brian Duffy Dr.

Guenzel ENC 1102 April 21, 2014

ARE LABOR UNIONS STILL RELEVANT? Since as far back as the Industrial Revolution, US companies have strived to improve their competitiveness in the manufacturing, mining and construction industries. One constant companys continually have to address, including at the present time, is the challenge of managing its employee population. As companies grew in size and complexity, it became apparent that the leaders of these industrial companies were very immature when it came to how to manage a large workforce, including how to compensate workers, how to manage fairly and how to make the workplace safe. Another challenge companys deal with is the relationship between the supervisor and employee. Throughout the years, these relationships have become much less personal, leaving management removed from the everyday concerns of the workforce and the workers feeling unheard. Lastly, Immigration has played a large role. Companies have seen tremendous growth in the number of immigrants to the United States, which meant that these companies had the luxury of a steady supply of labor and therefore did not seem to need to worry about keeping their workers happy, as there were plenty of laborers to do the work. These circumstances contributed to the growth, in both size and influence, of organized labor unions, who reasoned that there was more power in collectively demanding improved working conditions than in making individual requests. The utilization of a strike, the organized stoppage of work by employees in an effort to get their employer to grant their demands, became

Duffy 2 a key-negotiating tactic utilized by the unions. The issue of how the interests of the employee population could best be represented became a significant issue and concern not only for the workers themselves who felt they were being treated unfairly but also the employers who needed to ensure they maintained a productive workforce. Throughout our history, employees have had choices of what companies they work for and also if they needed or wanted support of a third party to represent their interests. Simply put, did they want a Union or not? The relevance of Unions is an important issue and understanding their history and examining all possible points of view in order to draw an informed conclusion regarding the relevance of labor unions today is the focus of my research. THIRD PARTY REPRESENTATION Third party representation is when a union or person other than Management steps in to provide assistance on behalf of an employee(s). Labor unions are legally recognized as organizations of workers who fight for improvements in industries today. Investopedia defines labor unions as An organization intended to represent the collective interests of workers in negotiations with employers over wages, hours and working conditions. Labor unions are often industry-specific and tend to be more common in manufacturing, mining, construction, transportation and the public sector (Labor Unions). When unions first emerged during the Industrial Revolution, many workers needed something or someone to stand up for them and help improve their conditions. People worked in factories with no breaks, dangerous equipment and surroundings all for small wages that barely supported one person let alone an entire family. In 1900, non-farming employees made an average annual salary of 483 dollars (Lebergott). This is where unions came into play, they provided a voice for the workers who were oppressed in a time where new jobs emerged and people were trying to make a living.

Duffy 3 The American Federation of Labor (AFL) emerged as the most powerful industrial union of the 19th century era. This built the foundation for unions of the future because, unlike ever before, the AFL concentrated on gaining the right to bargain collectively for wages, benefits, hours, and working conditions (Britannica). In 1935 the Committee of Industrial Organization (CIO) formed under the AFL creating an even larger powerhouse, the AFL-CIO, which remains active today. Many other legislative changes governing employee rights were also introduced during this time including the Fair Labor Standards Act and Social Security Act. According to a recent article in the Washington Post, The Taft-Hartley Act was the beginning of the end for unions in the private sector (Plumer). The private sector is usually composed of organizations that are privately owned and not part of the government. These usually include corporations (both profit and non-profit), partnerships, and charities (The Difference Between the Private and Public Sector). The Taft-Hartley Act of 1947 imposed a series of restrictions on union organizing and activities. Congress passed the bill when labor was at its peak and postwar strikes were rampant. As you can see below, the passing of this bill has had a significant impact on Union membership.

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(Plumer)

This downward trend continued beyond 1995 to today where in 2013, the union membership rate, the percent of workers who were members of unions, was 11.3 percent, the same as in 2012, the U.S. Bureau of Labor Statistics reported. The number of wage and salary workers belonging to unions, at 14.5 million, was little different from 2012. In 1983, the first year for which comparable union data is available, the union membership rate was 20.1 percent and there were 17.7 million union workers. There are several different criticisms of labor unions from multiple sources, starting with Mackechnie, who says, In many cases, they [unions] argue for job stability in a community, fighting against company plans to reduce the number of employees, even through attrition. Company management often argues that this prevents the organization from keeping pace with technology, which reduces the reliance on certain employees, making them less competitive. They also feel that the protection of jobs at all costs prevents the company from getting rid of poor performers (Issues With Labor Unions). In addition, employees pay membership dues for

Duffy 5 representation from a union that sometimes may seem unnecessary. Companies today have become a lot smarter and understand that employees feel unhappy with their current situation, so they adapt. Union leaders abuse their power and fight for the extreme benefits. It [unions] creates us vs. them hostility between ownership and workers (Messerli). This anxiety created in the workplace isnt good for employee relationships because they view management as the bad guy and believe that their union representative will rid them of the companies wrongdoing.

MANAGEMENT

Early on, as companies were growing quickly and a large labor pool was fueled by immigration, the employee/management relationship was strained, distant, and seemingly exploited by management, therefore allowing unions to form and assert their immediate dominance. Fast-forwarding from the early 20th century to the 1980s and beyond, many people blame the decline in union membership on the abuses of its leadership. At this time, Management was also focusing on improving their engagement of the workforce. Several steps have been taken over the years to close the gap between management and its employees. As previously referenced, a number of pieces of legislation were enacted guaranteeing minimum rights and conditions for the workforce with whom companies must comply. Another step was to provide employees with effective ways to address workplace problems. Management began to focus on regularly communicating information pertinent to employee concerns. This way any issues that would previously have been discussed with a third party could be easily discussed with management. This development came from improved training over the years. Managers went through extensive schooling and training on how to better service their employees all while improving the company itself. In his writings titled, Disgruntled & Disengaged Employees Will

Duffy 6 Want a Union, Orlando Blake says, A disengaged workforce can be a leading indicator of potential unionization and an organizations culture has a substantial impact on an employees emotional commitment to the organization and their engagement. While a culture of communication, innovation, and a reputation of integrity are the top cultural traits that drive employee discretionary effort, the top drivers of employee engagement and productivity are the understanding and importance found in their day to day work. In her article in Gallups Business Journal, Jessica Taylor writes, Gallup has studied employee engagement for more than 30 years with more than 15 million employees in more than 160 countries. Through this in-depth research, Gallup has developed and identified 12 core elements -- the Q12 -- that predict employee and workgroup performance and link powerfully to crucial business outcomes, including productivity and profitability.

These 12 elements represent employees' basic needs in the workplace, regardless of union status. When these needs are met, workers are involved in and enthusiastic about their work. They are more productive, innovative, inclusive, and aligned with the objectives of the overall organization. When these needs are not met, disengagement can lead to a decrease in profit, productivity, and customer outcomes, and an increase in safety incidences, absenteeism, turnover, and theft/shrink.

PRODUCTIVITY Private sector Companies are for-profit organizations and productivity drives profits. "Productivity isnt everything, but in the long run it is almost everything. A countrys ability to improve its standard of living over time depends almost entirely on its ability to raise its output per worker (Productivity Wikipedia). A measure of the efficiency of a person, machine,

Duffy 7 factory, system, etc., in converting inputs into useful outputs (Productivity Business Dictionary). In an article in The Economist in 2007, It was unions who often offer resistance to new work processes that might increase efficiency, and not just ones that would decrease labor demand. Unions also spend a lot of time trying to work in featherbedding provisions to their contractsforcing companies to use more people than are needed for a given job. This makes perfect sense from the standpoint of the union; more people doing a job means more workers paying dues. But it should put a drag on average productivity (Do Unions Increase Productivity). According to Shane Hall in his article titled, The Economic Impact of Labor Unions, Not all economists hold favorable views of organized labor and its economic effects. Writing for the Concise Encyclopedia of Economics, Morgan Reynolds, a former economist at the U.S. Department of Labor, said many economists analyze unions as cartels that raise wages above competitive levels by restricting the supply of workers to various industries. By raising wages and improving working conditions for members, unions reduce the number of jobs in unionized firms, Reynolds wrote. He concluded that union gains come at the expense of nonunion workers, consumers and businesses. Employees have been faced with choices when it comes to representation in the workplace. Clearly unions served their purpose early on when there were few employment laws in place and management was not prepared to handle a growing workforce. At that time, employees were apparently better off with a third party between them and management, fighting for improved working conditions that arguably might not have been implemented had it not been for the power of unions. However, it is also clear that as years have passed, circumstances have changed. There are now laws in place guaranteeing basic rights to the workforce. Companies have also matured in their ability to manage a large workforce and have proved that engaging

Duffy 8 directly with their employees is a best practice. Not only does it eliminate the need for third party representation it drives improved productivity, which ultimately benefits companies, communities and employees.

Duffy 9 Works Cited

"American Federation of Labor-Congress of Industrial Organizations (AFL-CIO) (labor Organization)." Encyclopedia Britannica Online. Encyclopedia Britannica, n.d. Blake, Orlando, Disgruntled & Disengaged Employees Will Want a Union, The Group (2009). "Do Unions Increase Productivity?" The Economist. The Economist Newspaper, 22 Feb. 2007. Web. 2 Apr. 2014. Hall, Shane. "The Economic Impact of Labor Unions." EHow. Demand Media, 17 Oct. 2010. Web. 4 Apr. 2014. Juravich, Tom. "1935: Committee on Industrial Organization (CIO) Created." AFL-CIO. N.p., n.d. Web. "Labor Union." Investopedia. N.p., n.d. Web. Lebergott, Stanley. The Americans: An Economic Record. 1984. MacKechnie, Chris. "Issues with Labor Unions." Small Business. Demand Media, n.d. Web. 24 Feb. 2014. Messerli, Joe. "BalancedPolitics.org." - Unions (Pros & Cons, Arguments For and Against, Advantages & Disadvantages). Balanced Politics, 1 July 2012. Web. 2014. Plumer, Brad. "Do Private-sector Unions Still Have a Future in the U.S.?" Washington Post. The Washington Post, 13 June 2013. Web. 12 Apr. 2014. "Productivity." BusinessDictionary.com. N.p., n.d. Web. "Productivity." Wikipedia. Wikimedia Foundation, 04 Jan. 2014. Web. 24 Feb. Massachusetts Web. Blake

Duffy 10 "The Difference Between the Private and Public Sector." PrivacySensenet RSS. N.p., 2014. Web. Tyler, Jessica. "Employee Engagement and Labor Relations." Employee Engagement and Labor Relations. N.p., n.d. Web. 12 Apr. 2014. "Union Members Summary." U.S. Bureau of Labor Statistics. U.S. Bureau of Labor Statistics, 24 Jan. 2014. Web.