Union revitalisation in Europe and North America - Essay Example

Introduction There has been an enormous debate on whether trade unions contribute towards the productivity of the organizations or not The pioneering work of Freeman and Medoff are considered as the most important academic argument in favor of the unions being one of the main sources of productivity for organizations (Addison & Hirsch, 1989). Such arguments are based on the assumptions that trade unions often attempt to institutionalize the governance mechanism within organizations and as such develop a long term implicit as well as explicit contractual relationships which foster productivity within the organizations. Unions are often considered as the source of low employee turnover which effectively helps organizations to concentrate on core issues rather than emphasizing on non-productive activities. Besides that, collective bargaining powers of unions provide them necessary influence and power to impact the performance of different productivity variables within organizations. There has been counter argument to this also which suggests that the productivity and presence of unions are negatively related with each other and as such unions do not contribute towards the productivity of the organizations. This argument developed so strong that unions started to loose their traditional position as collective bargaining agents and as such the movements, generally, lost its significance and influence within the organizations and as agents of productivity and industrial relations. However, during the recent past, there has been revitalization of the unions, especially within European Union and North America, mainly due to "network mobilization and institutional support" (Hurd et. al, 2003). This essay will look into the revitalization of unions within European Union and North America and will undertake to argue as to what extent such as revitalization activities is taking place in those two regions. Union and Economy Wessels (1985) was of the view that unions due to their collective bargaining power, tend to add up to the productivity of the organizations. As such unions essentially were considered as the organizational activities which by balancing the relationship between the employees and the employee tend to create an industrial environment which was more conducive for productivity as well as industrial peace. Before analyzing the question of revitalization of the union activities within EU and North America, it is critical that a critical look at the relationship between the unions and economy and how both interact and influence each other. One of the most critical tasks performed by Unions is the compression of wage differentials in the economy. The collective bargaining power of the unions gives them an advantage to negotiate the wages with the employers, and empirically it has been evaluated that wages of those employees who is part of the unions enjoy higher wage rates than those who is not part of the union activities. It is within this context that it has been argued that unions tend to reduce the shareholder value because higher wages result into lower profits. As such union activities are therefore viewed within the perspective of agents which have negative influence over the wealth which shareholders may drive from organizations in an absence of union. This argument is further consolidated by the fact that unions often wield their power in a way which can halt the production activities due to their conflict with the management of the organizations on any issue. Such behavior and attitude tend to result in lost productivity due to stoppage of production activities. Unions also often tend to monopolize the power structures within the organizations and as such give unions power to regulate and modify the labor market therefore changing the basics of competition within economy. This monopolization of power gives unions power to influence the wage rates therefore effectively can increase the total costs for the firm which may result into lost competitiveness. As such the role of unions within the economy is both positive as well as negative, and as such there is a very little evidence which points towards the assumption the unions may result into ouster of the firms from the business. Productivity and Unionism Reynolds (1986) was of the view that Unions, due to their institutional presence and influence, tend to force management to remain within the stricter levels of efficiency therefore effectively ensure a certain level of efficiency within organization. The so called Harvard School's view on the unions is based on the assumption that unions through their collective bargaining power and collective voice force firms to improve their productivity due to reduced employee turnover, improved an employee moral due to favorable terms offered to employees as well as improved work conditions. Further, presence of unions also creates creative organizations because by forcing management to remain within the strict level of efficiency, unions basically provide an opportunity to management to respond to them in more creative ways therefore creating strategies and tactics which contribute positively to the efficiency of the firm. However, on the other hand, there is also an argument which advocates that by associating themselves with the unions, organizations often lose their own freedom and result into lost welfare for the different stakeholders of the firm specially consumers. (Hildebrand, 1959). Transition Union activities have been common into manufacturing firms and most of their concentration was observed into mining, construction as well as other firms relying heavily onto labor intensive technologies. However, with the development in technology and a shift towards post modern era of service based economies, unions started to loose their significance because the very fundamentals of doing the business have gradually shifted. There is also a gradual shift of power towards the knowledge workers as larger and larger power clouts are emerging in the form of knowledge workers. Such transition therefore resulted into a decreased role of unions within the organizations due to the gradual shift as discussed above. However, despite such claims that the unions contribute negatively towards the productivity levels of organizations as well as less reliance on humans for productivity, unions are re-emerging again as potent force of change for organizations. The subsequent sections will discuss the re-vitalization of unions within EU and North America. Union Revitalization The debate is on regarding analyzing the factors behind the decline of trade unions in different countries of the world. The political, social as well as economic changes which took place especially during last two decades are often labeled as the main factors behind such a decline.(Frege & Kelly, 2003). Such factors include large scale integration of major European Markets, globalization and resulting from decentralization of production facilities as well as the shift in employment relationships contributed towards the decline of unions in EU and North American Region. In order to cope with such a situation, there was also a gradual shift into the strategies of the trade unions also as most of them especially in UK and USA became more market oriented and lost their traditional significance and degree of power. Despite their decline, trade unions kept their presence and continued to play a critical role in the overall governance within the organizations. However, to exactly define the revitalization of trade unions may be a difficult task to analyze because like their fall, trade union revitalization is complex to define too. (Frege & Kelly, 2003). Union revitalization is therefore termed as the potential moves of the trade unions to re-emerge as the agents with complete collective bargaining power within the organizations. Such revitalization is often labeled as the result of the creative and somewhat strategic steps taken by the trade unions to resurface with full force in organizational set ups. The strategies for revitalization may vary from a country to country however the core strategies are classified into six major categories by Frege & Kelly. 1. Organizing which is mainly related with the acquisition of new membership. 2. Organizational restructuring through which unions attempted to transform themselves into more efficient entities. 3. Coalition building through which trade unions often socializes with other similar movements. 4. Partnering with employers 5. Political actions 6. International links Such actions from trade unions therefore gave rise to the increased bargaining power and reemergence of trade unions by getting out of their collective complacent attitudes and behaviors. Trade union revitalization is therefore now emerging as a result of change in both the national as well as international dynamics. (Fairbrother & Griffin, 2002). Union Revitalization- A cross country analysis United Kingdom Wills (2001) is of the view that major reason for revitalization of trade unions within UK is the development of community based unionism which attempt to reach out its members beyond the boundaries of their workplace. This form of unionism specially has been common among ethnic workers. By forming strategic alliances as well as political clouts through campaigning, trade unions are re-emerging in new form. Wills (2001) further argue that by forming strategic alliances in non-formal manner, trade unions are revitalizing themselves by reaching to the non-union members also who were traditionally not been the part of the unions. This strategic move is providing them unions an opportunity to gain access to organizational activities in non-traditional way. Further, evidence from UK suggests that there is an increase in the union revitalization in the country, especially since last few years. There is a gradual increase in the member of trade unions, especially since 1998 whereas union recognition agreements increased too thus giving unions a more space to work and align themselves with different stakeholders of the organizations. (Herry et.al. 2003). Herry et. al (2003) further argue that the revitalization of union activities in UK is also the result of declining unemployment rates as there has been gradual and consistent increase in the employment levels in the country. The higher level of employment therefore automatically provide unions a readily available mass of employees who can be pursued and advocated to certain common goals shared by both the trade unions as well as employees. Further legislative actions by the UK as well as EU provided further participatory powers to the unions in order to engage them into a constructive process of efficient organization management. Spain Evidence from Spain also suggests that the trade unions are increasingly catching up with other trade unions of the region and are taking an incentive out of the EU level legislations which provide an incentive to integrate.(Hermann & Lucio,2003). However, the revitalization of Spanish Trade Unions is also considered as a result of the strengthened political system in the country. With the increasing stability of democratic forces in the country, trade unions have been given further powers and liberations which collectively increased their power and influence within the organizational set ups of the country. The recent trade revitalization in Spain is therefore taking place mostly as a result of the political action that has allowed the development of legal infrastructure which allowed trade unions to flourish and increase their power concentration. Due to the nature of political structure within the country, all the subsequent regimes gave preference to unions and included trade unions into negotiations while making reforms into labor markets. Further, the revitalization also occurred due to the increased strategic coalitions formed by trade unions with different social groups within the country. (Harmann & Lucio, 2003). This association with different social groups within the country provided trade unions an opportunity to become a potent social as well as political force which has successfully been demonstrated by the trade unions also during the strikes of 1998 as well as 2002. (Ferge, Kelly, 2004). Italy Evidence from Italy also suggests that due to organizational reforms, unified actions of three major union confederations as well as increased a political role of the trade unions resulted into the trade revitalization in the country.(Baccarat et. al, 2003). However, the major reason for the revitalization of trade unions within a country is their dominance in political sphere of the country where trade union exercised substantial power and influence to direct the reform process of labor markets. Like other members in the region, trade unions in the country are largely therefore influenced by the political ambitions and orientation of successive political governments of the country. Due to such political affiliations, Italian unions have been provided legal protections therefore they rely less on the quantum of their membership and as such their power and influence are not directly driven from the employees but from their factors other than responsible for creation of trade unions. As such the trade union revitalization in Italy is not directly the result of the direct influence of the employees but the increasing political power assigned to trade unions. North America The case of North American Revitalization movement is slightly different than the same in other developed countries such as EU. One of the most important factors behind such revitalization is the change in the leadership of the major unions including AFL-CIO which brought in new ideas and strategic moves which allowed unions to be more focused and flexible. (Hurd et. al,2003). Such approach adopted by the trade unions allows them to adopt a holistic view of the reasons behind the decline of trade unions in US. Trade unions in US specially faced the consequences of de-regulation as well as free trade policies adopted by successive governments which potentially reduced the influence and collective power of trade unions. The second argument in favor of the revitalization of Trade unions in North America is the gross root mobilization of local resources which allowed unions to increase their penetration into the local ranks and files of the very fabric of the North American workforce. As discussed above the revitalization within US specially is therefore, taking place due to network mobilization and the mass scale institutional support provided to the trade unions. Conclusion Earlier arguments suggested that the Unions contribute towards improving the productivity of the organizations by forcing organizations to remain within strict sense of efficiency. However, gradually as the shift occurred towards more service oriented industries supported by technological improvements, unions lost their traditional advantage because organizations were less reliant on the human force as the main source of producing goods and services. However, due to a larger role of unions in economy, trade unions survived that extreme period and now seem to be revitalizing in EU as well as North American markets. The dynamics are more or less common however in UK and US, the characteristics of such a revival is slightly different as there are some unique features associated with the revitalization of trade union in both of these countries. Due to increased integration in EU and development of favorable legal infrastructure coupled with favorable governments allowed trade unions to grow and gain the influence within the region. In US, too, due to local as well as international factors, trade unions are gaining momentum again. It may be hard to clearly outline the extent of the revitalization of trade unions as many critics still believe that such revitalization has not gained the full momentum however, the process of change has already begun. Trade unions are not increasing their influence and collective bargaining power but also gaining widespread political as well as societal support from the actors which were previously not involved in this process. References 1. Addison. John T, Hirsch, Barry T. (1989). Union Effects on Productivity, Profits, and Growth: Has the Long Run Arrived. Journal of Labor Economics. 0 (0), pp.72-105 2. Carola M. Frege and John Kelly. (2003). Union Revitalization Strategies in Comparative Perspective. European Journal of Industrial Relations. 9 (1), 7-24. 3. Edmund Heery, John Kelly and Jeremy Waddington. (2003). Union Revitalization in Britain. European Journal of Industrial Relations. 9 (1), 79-97. 4. Peter Fairbrother, Gerard Griffin. (2002). Trade Unions facing the future. In: Peter Fairbrother, Gerard Griffin Peter Fairbrother, Gerard Griffin. New York: Routledge. 1. 5. Carola M. Frege, John E. Kelly (2004). Varieties of Unionism: Strategies for Union Revitalization in a Globalizing Economy. Oxford: Oxford University Press. 215. 6. Lucio Baccaro, Mimmo Carrieri and Cesare Damiano. (2003). The Resurgence of the Italian Confederal Unions: Will it Last. European Journal of Industrial Relations. 9 (1), 119. 7. Hurd, Richard, Milkman Ruth, and Turner. Lowell (2003). Reviving the American Labour Movement: Institutions and Mobilization. European Journal of Industrial Relations. 9 (1), 99-117. 8. Wessels, Walter J. (1985). 1985'the effects of Unions on Employment and Productivity: An unresolved contradiction. Journal of Labor Economics. 0 (0), p.101-108. 9. Reynolds, Morgan O. (1986). Trade Unions in the Production Process Reconsidered'. Journal of Political Economy. 0 (0), p. 443-447. 10. Hildebrand, George H. (1959). Economics by Negotiation'. The American Economic Review,. 0 (0), 399-411. Read More