Unions help workers obtaining better terms of employment, but what are their downsides?

Opinions on Debatable Issues #20

FindLaw defines unions as institutions that represent groups of employees in certain trades and professions, and engage in “collective bargaining”, which is the negotiation between an employer and unionized employees in which certain work conditions and terms of employment are decided.

How Labor Unions Are Shaping the 2020 Presidential Race - UnionTrack
UnionTrack ENGAGE

Unions allow individuals with limited power and influence to gather together to push for sustainable changes with a collective effort. It is true that with this power, unions can bring better terms of employment to some workers. However, workers are not the only stakeholders in this conversation. The benefits of the employers and shareholders also need to be taken into account. 

Today, most Unions target companies with competitive advantages that allow them to pay higher wages to raise work salary. That causes a loss in profits, which is undesirable for all private companies. Thus, unionized companies respond to this union tax by reducing investment. Less investment makes unionized companies less competitive. This results in a decrease of competitive companies in the economy to push for greater and faster development. The employers and shareholders also are hurt by the restraints that the union place on them.

Unions can be detrimental to the general economy. The presence of a union and its external activities can negatively impact businesses in today’s competitive market. According to The Conversation, evidence shows unionization is associated with lower profits because unions secure higher wages and benefits for their members. Also, author Lloyd Field, who explored multiple studies conducted in the five years following unionization, found that newly organized company’s operating costs increased by more than 25 percent of their gross payroll and benefits costs. Besides, the Employment Policy Foundation (EPF) found that a unionized company’s output per employee would be 2.4 percent less than a union-free competitor if that unionized company experienced just a .25 percent reduction in productivity. They concluded that, unless the unionized company could sell their product at a higher price or other cost savings could be attained, the unionized company is likely to see 14 percent less in profits per labor hour than their non-union competitor. 

The race for shareholder profits has left workers in the dust, according to  new research - The Washington Post
The Washington Post

In the United States, we value individualism and a free market. Unions are restraining firms from developing their full potential. However, The government has forced employers to recognize labor unions and negotiate with them through “mandatory collective bargaining.” The government should not interfere with private companies to that extend. It is an overreach and unfettered power that profit some at the expense of private company owners. 

In addition, Unions are beneficial for some workers, not others. Unions tend to promote and prioritize seniority, which is providing various benefits based on how long an employee has worked for the company. Despite its benefits of creating a more stable career path and increasing employee loyalty, seniority can negatively influence a union worker’s ability to receive promotions and take on new roles in a company. “A union might require that the most senior workers be promoted to desirable positions before workers with less seniority, regardless of job performance.” Besides, if a company that employs union workers needs to lay off employees, union rules might force the employer to lay off new workers before those with more seniority. For instance, if a person wants to file a grievance to break the contract in a way that would hurt other workers, the union wouldn’t have to go along with it. For example, a worker who is discontent with a union’s value on seniority and file a grievance against it, promoting “merit pay” can be turned away by the union, which usually refuses to file this on the basis that it violates the contract and will hurt the majority of union members, according to ueunion.org. It is unfair for younger employees who are talented and skilled. This problem will exacerbate as the mortality of citizens increase and the elderly work for more years. 

Also, increases in union wages can come at the expense of non-unionized workers, who lack the same level of representation without union management. Once a union is ratified by the government, it is considered a representative of the workers when it is representing all workers who are part of the union. This creates a scary situation of the tyranny of the majority as non-unionized workers are being left out of the conversation and their benefits are overlooked. Unions monopolize the workforce through the “herd mentality”, dictating public opinions the way they desire. Additionally, “as a condition of employment, unions can deduct union dues from employee paychecks without prior consent”, according to the National Labor Union Board. It is an impingement of the workers’ rights to their fair share. Unions can easily abuse that power. 

Christopher Booker: The Tyranny Of Groupthink - The Global Warming Policy  Forum (GWPF)
The Global Warming Policy Forum

Further, unions can hurt business when they exercise their power to disrupt (through strikes and other industrial action) We have seen in the recent strike lead by the teacher union in Bellevue. The Union had no legit reason to protest in the first place. In fact, in November the Superintendent of the Bellevue school district reached an agreement with the union to safely phase in the return of the youngest students to their classrooms. Teachers promised to provide in-person instruction, including the return of the second-grader starting on January 21st. However, unionized teachers broke the agreement and voted to strike. They also refuse to provide remote learning for all 20,000 students in the Bellevue School District for the remainder of this week. The actions of the union are both morally and legalistically blameworthy since they broke the agreement, which is the basis of any institution and corresponding union. 

Labor Unions Gaining Momentum | Los Angeles Business Journal
Los Angeles Business Journal

The United States is a capitalist society where means of production are based on private ownership and operation for profit. However, unions are the counterforce in this mechanism. Labor consultant Jim Gray also found that companies could expect to spend approximately $400,000 to more than $2,000,000 on a single unionization campaign. Research by David Lee and Alexandre Mas also found that unionization reduced an organization’s market value by approximately $40,500 per worker eligible to vote in a unionizing campaign. Those figures unequivocally shows the downside of unions.

In conclusion, the detrimental impacts of unions on the economy, younger employees, non-unionized workers, and companies cannot be ignored. When we celebrate the raise of minimal wage and the improvement in working enviornment, we should also keep in mind that the other stakeholders in this conversation can be harmed.

Syndicalism - Wikipedia
Wikipedia

Sources:

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