We have been looking at the labor market in the past few lessons. In this article, we are focusing on unions. The labor market plays the biggest role in the growth and development of markets. It ensures there is a proper supply of labor within economies. The rate of unemployment measures how much an economy is developed. This is why the government tries going the extra mile to create more jobs while creating a conducive environment for private sector businesses, who are also major contributors to the general economy.
In other words, creating employment opportunities is one way of ensuring good living conditions of people within a specific economic region. The relationship between labor supply and demand should be kept on the highest levels to create good conditions for markets' growth. Employers and workers seem to differ in their approaches to employment, as they all have different perspectives. And since a good relationship is paramount to their development, there must be a way for the two sides to reach an agreement. As discussed in earlier lessons, households are suppliers, while firms provide supply in the labor market.
Unions are the answer to this issue. For years, unions have been the mediators in worker-employer relationships, helping shape many aspects of the business environment. However, they are not always a perfect solution, especially in creating a conducive economic environment. As much as they are necessary, some negative sides of these unions should not be ignored. For instance, if the unions are so active, they may force a hike in workers' wages, scaring away many employers. In so doing, they may increase the rate of unemployment.
Nevertheless, understand unions and their role in the labor market creates awareness for better worker-employer relationships. It also helps users understand their position in current business environments. We will be examining their role detail this topic, as well as some of the policies that guide union operations.
What are Unions?
Unions in economics is not a new term. Many of us know about the European Union, the African Union, and the United States of America. All these are unions that make economic activities flow easily. But these are not the unions we are referring to here. We are on the labor market where unions are an organization that offers negotiations to corporations, businesses, and other organizations, representing workers who are members of these unions. Trade unions are representatives of workers who operate a specific job market. And industry unions are for workers in particular industries. An example is the American Federation of Labor-Congress of the Industrial Organization (AFL-CIO), which is a trade union. The United Auto Workers (UAW) stands as an industrial union.
A trade union, also known as a labor union, is a group of workers who have come together to protect their professional rights and interests. They seek to make a better working environment for their members, ensuring they are well paid and working under safe conditions. Even though the number of unions has been on the rise over the past few years, the number of workers joining them seems to be going down. Even in the most developed countries, workers are covered by collective barging agreements, as seen in the EU states.
There have been several theories attempting to explain these relationships, which differ in the effect of collective bargaining. However, it is clearly suggested that help in raising pay per worker. Some have argued that it increases labor costs. Collective bargaining is appreciated for increasing worker productivity through collaboration with management and offering incentives. On the other hand, it may also impose insufficient worker rule, such as restricting firing workers where technology changes and reducing productivity. This effect can extend to even workers who have represented unions.
Employer and Union Rights and Obligations
The Nation, Labor Relations Act is a fundamental policy that forbids employers from getting involved with, retaining, or coercing employees when they are exercising their rights. Every employee has a right to take certain actions concerning the organization, and form, join or assist a labor organization for collective bargaining. A firm cannot interfere with these situations as they are provided with the law. Employees can also work together to improve the terms and conditions of employment or refraining from any activities. A single worker cannot do anything that affects or changes their working conditions. But when they come together, they can make a huge impact that improves their working condition. Similarly, the policy above forbids labor organizations from restraining or coercing employees in exercising these rights.
An employer can violate this law by threatening employees with loss of jobs or benefits if they join or vote for a union. As stated above, workers have a right to take part in activities that improve their working conditions. But it does not always go well with employers who seek to make maximum profits. Hence, if the employer does any of these things or threatens workers to engage in protected concerted activities, they will violate the law.
Also, a firm cannot threaten to close the plant if employees decide to join a union to represent them. In addition, they cannot question employees about their union sympathies or activities in ways that seem to affect their relationship with the unions and the firm under this act's provision. Doing so would be seen as violating the law and can be met with legal consequences. If the employee promises employees' benefits to discourage their support for certain unions, they have gone against the policy.
Another situation where a firm can violate this provision is when the transfer, lay off, terminate, assign employees more difficult tasks, or punish them for getting involved with unions or protected concerted activities. Employers cannot also punish employees for filing unfair labor practice charges or participating in an investigation conducted by concerned bodies.
Workers are free to choose whether or not to join a union. The law also protects them against being forced by labor organizations to join their unions. Therefore, labor unions cannot threaten employees with job losses because they failed to support the union. Alternatively, seek suspension, discharge, or other forms of punishment for an employee who refuses to be part of the union, even if the employee has already paid or offered to compensate with a periodic in fees. Labor organizations are obliged to process grievance and cannot refuse to do so on the grounds that an employee has criticized an official within the organization.
Apart from this, labor organizations will have violated the law if they fine employees who have resigned from the union with a valid reason for engaging in protected concerted activities after resigning. In the same line, it is unlawful for them to engage in picket line misconduct, such as giving threats and assaults or barring non-strikers from their employees' premises. They may not all also strike over issues unrelated to employment terms and conditions of using coercive terms to pull neutral parties into the same disputes.
How Unions Help Economies
Unions sit at the center of negotiations. They can help in increasing member wages or ask for other concession terms from the employer. They use collective bargaining, a process in which workers meet to discuss their environment in workplaces. Unions give the arguments on specific issues, on which employer can agree to, or present counter-arguments. Note that the term 'bargaining' can be misleading since it creates a situation where two people are haggling in some market. However, this is not the goal of unions. Instead, collective bargaining seeks to improve a worker's status while protecting the interest of an employer too. It will not make sense if the union made demands that put a firm out of business, then they would be creating a much worse condition for the worker they represent if they caused them to lose their job.
The process of bargaining, in this case, is not a one-time stand-off. It is a lifetime process that goes on as long as the two organizations are in process. If a union fails to negotiate a deal or is not satisfied with collective bargaining fruits, they can influence a work stoppage or strike from their workers. Threatening to strike is more effective than actual striking as long it is feasible. An actual strike may also be effective, but whether stopping to work affects the employer extends to conceding to their demands.
Unions have always been and continue to be an essential part if society. Through them, working people have one voice at work and a way to achieve equality, fair treatment, and economic security. They're like watchdogs who provide a check to the nearly whole power management issue in the workplace and ensure workers' voice is heard and respected in their workplaces. In understanding the business world and economic growth, the labor market is one of the main subjects. Labor is the main force behind the growth of markets, far from other markets, and hence, a vital aspect of economic development. Within this larger subject, we find unions, which are an organization that ensures fair treatment of workers in the market, concerning their health and how they are paid. The make wage negotiations and improvement of working conditions for their members.
Unions help workers to find decent wages for their input so that their families can live better. It is all about ensuring financial security for their members. Some employers could oppress their workers if there were no laws and policies governing things like minimum wages and other workplace benefits. So, if a worker wants to enjoy things like vacations, extra medical insurance, disability, and life insurance, they can do so by joining unions. They help a better workplace economy.
Promoting economic equality
Unions can offer a great boost to economic equalities. Where is democracy at the workplace, it does not only benefit unions but economies as well. Unions have played a crucial role in humanizing and democratizing economies of nations. Unions can create high equality within economies and social rights for people living in these economies. Many, including the notorious World Bank, agree that unions serve a good purpose in an economy. It presents a report in 2003 entitled "Unions and Collective Bargaining Economic Effects in a Global Environment," from more than one thousand studies on how unions affect national economies' performance. The research discovered that high unionization rates to lower earnings inequality, reduced unemployment and inflation rates, higher productivity, and better adjustments to economic shocks were possible because of these unions.
A more recent example is the International Labor Organization's (ILO) study, which found that economies that have income inequalities, on average lower, seemed to have more workers who were a member of unions. In other words, countries that have more unions also have more welfare development. They have higher taxation and are more progressive, and their collective bargaining was more centralized, and they have proper labor laws. Unions are not only about protecting their members but improving the general economy.
Implementing labor rights
For any economy that seeks proper growth, labor rights are a key component to social justice as well as economic development that should be embraced. There is a swelling body of evidence that shows how laws and practices that promote unions and collective bargaining contribute majorly to higher productivity in economies, which becomes beneficial to the whole community.
A good example of the labor movement is in Canada. It comes with progressive allies that seek to create better public awareness and understanding of labor rights. This a crucial aspect of understanding and embracing democracy and achieving and an equitable and sustainable economy. The need to build a good political system has never been more real than it is today, and public support for progressive law reform if required.
Unions are important too in modern economies. And whether they affect these economies negatively or positively depends on the labor market they operate in. They are there to improve people's working conditions while creating more incentives for employees to gain more skills. These effects extend all the way into the general economies, which grow based on how organized the labor force is.
Author: James Hamilton