UNION/LABOR RELATIONS POSITION STATEMENT 8
History of Unions and Labor Relations
Labor unions have been in existence in America from the birth of thenation. The objective of their creation was to protect workers fromemployer abuses like hazardous working conditions. In the first ahundred years of America, unions were poorly organized and dissolvedafter attaining their objectives. An illustration is the unionizationof printers in 1778 and the carpenters’ campaign to work ten hoursa day in 1791. However, unions and labor relations were mostwidespread during the nineteenth century, specifically in 1866following the formation of the National Labor Union (NLU) (UnionPlus, 2015). Contrary to modern unions, NLU was inclusive to allemployees. The objective of NLU was to convince Congress to reduceworking hours for federal workers. At the moment, unions faced manychallenges both from employers and government. Employers werereluctant to comply while the government was unsympathetic towardsworkers striking.
Although NLU dismantled and did not make important gains in fightingfor employees’ rights, its formation was a predecessor for othersuccessful unions. It was followed by the Knights for Labor createdin 1869. The union comprised of 700,000 members (Union Plus,2015). Its objectives included addressing major issues like opposingchild labor and demand for eight-hour working days. The most famouslabor unions in America’s history are American Federation of Labor(AFL), 1886, which had close to 1.4 million members (Union Plus,2015). The union was triumphant in negotiating salary increases aswell as improved safety in the place of work for all employees. Theother is Congress of Industrial Organizations (CIO), which mergedwith AFL in 1955 (Union Plus, 2015). Following the enactmentof laws banning child labor and authorizing fair pay regardless of aworker’s gender or race, the significance of unions declined asemployees could now depend on federal laws for protection of theirrights. However, some labor unions continue to be effective to date.
Court Cases Influenced by Labor Activity
All through the nineteenth century, government sided with employersby using force to stop strikes. Courts employed antitrust laws indeclaring unions unlawful. The earliest court case influenced bylabor activity was the 1806 Commonwealth v. Pullis (Johnson, 2003).In the case, the court declared it unlawful for workers to strike inthe demand for increased wages. However, in 1842 in the Commonwealthv. Hunt case, the court ruled in favor of employees declaring theirlegal right to organize. But the labor unions still facedrestrictions as is evident by The Sherman Act, 1890 court ruling thatdestabilized labor unions by forbidding any limit of commerce(Johnson, 2003). However, as part of President Roosevelt’s NewDeal, he passed laws, which resulted in the lawful protection ofunions.
Under the New Deal laws was the 1937 NLRB v. Jones and Laughlin SteelCorporation case, which declared the constitutionality of the WagnerAct (Johnson, 2003). The ruling permitted employees to strike as wellas boycott businesses with which they had disputes. The Wagner Actresulted in the proliferation of labor unions. As a result, therewere many strikes in the 1940s, which threatened to disableindustries. This resulted in the Taft-Hartley Act. The 1947 Act, theSupreme Court made amendments to the Wagner Act (Johnson, 2003). Theamended act incorporated laws benefiting workers, unions andemployers, unlike before when the act merely supported participationin union activities. The Taft-Hartley Act progressed to be used inmany court cases influenced by labor activity.
Argument for and against Unions
Labor unions make it possible for employee members to earn moresalaries (Madland & Walter, 2009). It is not possible for anindividual employee to effectively seek salary increments or morebenefits from the employer. This is because as an individual, theemployee has less bargaining power, and the employer reserves theright to raise the employee’s salary or not. However, unionscomprise of teams of employee representatives who have a higherbargaining power than employers. It is more effective for employeesto seek salary increments as a team represented by the union thanindividually. Research demonstrates that union members in Americaearn higher as compared to non-union employees. In a study conductedfrom 2004 to 2007, the average salary of unionized employees was11.3% more than that of non unionized employees working under thesame characteristics (Madland & Walter, 2009). This implies thata US employee who joins a union will have a higher salary than anemployee opting not to join a labor union.
Labor unions enhance the likelihood of employers providing benefitsto their workers. An employee may be aware of the benefits theydeserve from their employer. However, due to fear of intimidation theemployee withdraws from fighting for his or her benefits. On theother hand, labor unions as joint forces between employees and theunion representatives can fight for employee benefits (Madland &Walter, 2009). For instance, supposing an employer denies a unionizedemployee their benefits, the employee through the union could seeklegal action compelling the employer to pay benefits. Individually,the employee may be unable to pay for a lawyer and other expensesassociated with the court action. The employee might also lack timeto follow up on court proceedings in such a case. Research shows thatunion employers have a higher likelihood of providing employeebenefits. Also, unionized employees have a 28.2% possibility of beingcovered by health insurance offered by the employer, and a 53.9%possibility of having pensions provided by employers, compared to nonunionized workers (Madland & Walter, 2009).
Labor unions endeavor to safeguard the rights of unionizedemployees. There are many labor laws aimed at protecting workerswhile in their places of employment. These laws mandate employers toprovide for instance good working conditions to their workers.Although the government enacts the laws, it is not possible forgovernment to follow up and ensure that employers do not infringe onemployee rights. Hence, the significance of unions in ensuringemployers complies with labor laws on the protection of workers’rights. According to Walters and Mishel (2003), unions have played acrucial role in enacting an array of labor laws, which covers issuesrelated to overtime payment, how to treat immigrant employees,minimum wage and paid leave among others. The authors further notethat unions ensure labor laws are not merely ‘paper promises’ atplaces of employment. Since administrative agencies responsible forensuring the enforcement of such laws are incapable of monitoring allworkplaces, the effectiveness of implementing the labor laws isdependent on the employee’s. This is achieved through report ofabuse or via filing claims. Walters and Mishel (2003) note thesignificance of unions as such in providing employees with crucialinformation concerning their rights as well as the importantprocedures to ensure the rights are met. Also, unions facilitate theprocedure through availing resources needed in making claims.
Unions result in higher prices for consumers. Labor unions pushorganizations to pay their unionized members more salaries andbenefits. As a result, the employer must seek other ways tocompensate for the money used in increasing salaries and catering forbenefits to avoid losses (Sherk, 2009). One such way is an increasein the prices of goods and services companies make. Hence, consumersare compelled to pay more in order to buy a good or service.Unionized members may also fail to benefit from salary increments asthey also form part of the consumers affected by higher prices. Thisis best illustrated by the United Auto Workers. It refers to theunion that represents Detroit autoworkers. The union often heldstrikes to compel Detroit automakers to pay more hourly wages as wellas benefits including health insurance and retirement (Sherk, 2009).While some of the costs were catered for via profits, others werepassed on to consumers via increased prices of cars. Although each ofthe union’s members earns higher, an American that purchases a carhas to pay more (Sherk, 2009). Hence, the benefits derived fromensuring unionized employees earn higher in turn results in consumerspaying more for their purchases.
Unions result in a loss in jobs for unionized employees. Due to thehigh demand for more wages and benefits by unionized members,organizations have resorted to employ non unionized employees. In aneffort to reduce losses to companies, employers seek employees thathave a lower bargaining power and those that are less likely todemand for more benefits or salary increments. Research shows adisparity in the employment of unionized and non-unionized employees.There was a 75% drop in manufacturing jobs for union members from1977 to 2008 (Sherk, 2009). On the other hand, non-unionized jobs inthe same sector increased by 6% for the same period. The same changeshave been experienced in other sectors such as the constructionindustry where construction work for unionized workers declined by17% from 1977 to 2008 (Sherk, 2009). More research demonstrates thatthe pattern is the same for starting organizations and thoseexpanding. As non-union employment opportunities increase by 3%yearly, union jobs decline (Sherk, 2009). This demonstrates anobvious negative impact of labor unions on employment opportunitiesfor unionized workers.
Labor unions cause a decline in investment by companies that employunionized workers (Sherk, 2009). Unionized workers have more demandsas compared to non-unionized workers. Supposing that a companyemploys more unionized employees, it spends more of its profit incatering for their benefits. Thus, the company has minimal profits toinvest. By cutting on their profits, employers reduce money, whichcould be used for advent investments. The argument is supported byeconomic studies, which depict tremendously that unionizedorganization invest minimally in physical as well as intangible R&Das compared to those firms that are not unionized (Sherk, 2009). Thestudy indicates that unions cause a direct reduction in capitalinvestment by 6% in addition to an indirect decline in capitalinvestment via reduced profits by an extra 7%. The same research alsoindicates that unions cause a 15% to 20% decline in R&D activity(Sherk, 2009). This research demonstrates that the more anorganization spends in union related expenses, the more money is usedthat would have otherwise been utilized in investment.
Johnson, J. W. (2003). Historic US court cases: An encyclopedia.New York: Routledge.
Madland, D & Walter, K. (2009). Unions are good for the Americaneconomy. Center for American Progress Action Fund, 1-4.
Sherk, J. (2009). What unions do: How labor unions affect jobs andthe economy. Backgrounder (2275), 1-17.
Union Plus. (2015). The history of labor unions and fight forfairness at work, 1-1. Retrieved from:https://www.unionplus.org/about/labor-unions/history-origin
Walters, M & Mishel, L. (2003). How unions help all workers.Economic Policy Institute, 1-18.