Business & Labor Unions
The corporate base in this country has split in two. On the one
side are the old line manufacturing industries which have evolved
into a synergistic relationship with labor unions. Both sides
have a common interest in seeing the company prosper. They have
been joined recently by a rise in unionization in low paid
service industries. In some cases this unionization has forced
smaller companies to join into negotiating units so that fairly
uniform working conditions can be negotiated. This benefits the
companies since they now have a well defined labor market with
the costs that can be predicted and thus factored into their
planning. It also makes the workers more mobile since they can be
assured of similar working conditions even when they shift
employers. Transparency in the labor market is thus insured.
The other part of the corporate base consists of those companies
that have successfully avoided unionization. Typical cases are
foreign manufacturers that set up plants in union unfriendly
locales or in areas like retail have few employees at each site
and can keep their workforce unorganized. These companies usually
brag about their ability to keep labor costs low by using these
techniques.
There is, however, another side to this. By fragmenting the labor
market they distort the competitiveness of the unionized
companies. This puts the old line and organized companies at a
disadvantage. It's obvious that it is in the interests of the
existing unions to want to organize these other companies. They
get more members which improves their bargaining power. But it is
also in the interests of the unionized companies. By cooperating
with their unions on organizing drives they stand to benefit by
leveling the playing field thus making them more competitive.
Another benefit is that many nonunion companies offer poorer
fringe benefits such as medical and retirement plans. This puts a
burden on the rest of society which must cover these shortfalls
as an overall cost. If an employee doesn't have health insurance
and ends up at a public emergency room then everyone else pays
for the medical care in higher taxes. The nonunionized company
gets a free ride.
Simple commonality of interest should indicate the next steps to
be taken not only domestically but with foreign competitors as
well.
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Copyright © 2004 Robert D Feinman
Feel free to use the ideas, but the words are mine.