Are Labor Unions Necessary - Research Paper Example

Are Labor Unions Necessary? Labor Unions are organizations whose membership is largely consisted of workers and union leaders that aim to protect their common interests. The organizations first emerged in the 19th century when they were first considered important political movements whose primary function was to fight for fair wages of workers during a period that was characterized by low wages and poor working conditions. For this reason, workers came together to collectively demand better pay and good working conditions and trade unions proved to be a better tool for voicing their grievances since trade unions gave workers more input and decision-making power (Simms & Charlwood). However, different scholars have argued for and against trade unions, even though, they to gain a good reputation because of their power, especially in fighting for the rights of workers. The labor unions are structured from the top with powerful leaders who represent the interests of their members. The researcher in this paper will present arguments for the necessity of labor unions. Trade unions continue to be relevant as an effective tool in the 21st century through which workers continue to demand fair wages and better working conditions. Social Pacts Labor unions have been recognized for the unrelenting fight for the social welfare for the workers. In a number of countries, governments have succumbed to the pressure of labor unions to raise the living standards for their workers. In the past, the public sector employees and political parties formed the majority of the labor unions population. Workers in the public sector are many, and they cannot individually fight for their interests at work. This, therefore, necessitates the use of labor movements that act as the representative of their interests. According to the AFL-CIO, trade unions have been experiencing a decline from the onset of the 21st century because many employers, especially in the private sector, have endeavored to provide the best working conditions for the employees. In the public sector, however, trade unions have remained the single fighting voice for most of the employees due to their numbers. Major companies have stressed the need for national governments to respect the rights of workers, raise their minimum wage rates and provide a better working environment (Meng 1638). These countries include India and China that are currently experiencing an increasing trend in production. Many companies have relocated their manufacturing operations to countries like China because of the low cost of production probably resulting from the low cost of labor (OGrady et al.). These countries experience more labor union actions than more developed countries because of the dilapidated working conditions. China has the largest labor union All-China Federation of Trade Unions (ACFTU) in the world with membership totaling over 300 million (OGrady et al.) This union is known for its efforts in fighting for the social welfare of its members. In the year 2006 the union was broken the unbroken record of Walmart in killing the efforts of trade unions. Walmart gave in and permitted a union of its all branches in the country (OGrady et al.). South Africa, on the other hand, has the largest labor union in Africa Congress of South African Trade Unions (COSATU) (OGrady et al.). What is evident is that these trade unions are less active in developed countries because, in these countries, workers enjoy better social pacts than in developing countries. Trade unions are, therefore, good in fighting for the social pacts of workers in various countries globally. Securing Jobs The actions of labor unions in the United States have reduced over time because employers have taken it upon themselves to provide job security and better-working conditions to workers. However, in other countries employees unite to fight for their rights and job security through labor unions. In a study that was conducted in Canada to determine the relationship between labor unions and satisfaction, it was determined that members of labor unions enjoyed higher satisfaction and job security than nonmembers (Meng 1648). Therefore, through the study it evident that labor unions help to safeguard the interest of workers by enabling them to collectively voice their grievances and reduce the power of employers to fire and hire at will. Empirical evidence demonstrates that some employers have a tendency to hire and fire at will based on senseless grounds such as religious affiliations, age, gender, and race. However, when workers are united in a strong labor union, such incidences are minimized because labor unions fight for the rights of all the workers regardless of their gender, religion, or race (Rees 175). This is because labor unions offer workers job security to speak more freely and this helps create a better working relationship between employers and the employees. Thus, this demonstrates that labor unions remain a critical tool for employees, especially in this 21st century where the business environment has become dynamic due to advances in technology and competition. Productivity Labor unions have been credited with the increased productivity because greatly affect the workers morale (Keller). Huselid is a renowned scholar of organizational management. He conducted a study that examined the impacts of HRM practices on productivity and financial performance and observed that labor unions are very crucial in promoting productivity in various economic sectors (635). Other scholars have supported this view with practical studies that have shown that strong labor unions have provided the workers with the peace of mind they need to work hard and productively for their employers since their interests are taken care of. Becker and Olson conducted a study in which they investigated the impacts of trade unions on the company profits and found a significant relationship between the two (395). They further argued that concentrating in the market alone is not enough if the workers are not well treated. The interests of the workers, therefore, have a significant effect on the outcomes of any firms in terms of profitability and productivity. Labor unions play the crucial role in harmonizing the employer-employee relationships that in turn lead to a better working relationship. It is believed that unions are greedy given the manner in which they act. Some scholars have argued that unions push the wages above levels of productivity. According to these scholars, therefore, unions are too greedy to understand the basic laws of economics. Surprisingly, the data obtained from various economies around the world tell a different story. For instance, since 1980 productivity has been increasing with the rise of labor unions in America with figures showing that productivity has grown by 80%, even although, inflation-adjusted wages have only risen by 12%. From the research it is evident that labor unions remain a critical tool to workers in the 21st century by safeguarding them from greedy employers who do not care about their interests by ensuring that wages keep pace with the increasing levels of productivity of workers. Macroeconomics Performance A well-paid employee is a happy worker and is likely to make decisions that affect an economy positively (Michael, Garrett and Lange 539). Governments are concerned with making good economic policies that help the country to grow and develop. Some governments in waiting, promise workers through their labor unions that if they vote them, their interests will be taken care of. Michael, Garrett, and Lange argue that the ability of various governments to pursue their partisan interests and control their chances of being elected depends on how well they relate with labor unions operating in an economy and this affects the ability of the governments to preside and honor their promises to workers (539). Therefore, it is undeniable that labor unions remain an imperative vehicle for workers in voicing their grievances to governments in the volatile political climate of the 21st century. Research demonstrates that government that maintain good relations with labor unions enjoys a harmonious leadership while in power by minimizing industrial movements and court battles with the workers’ unions. Studies have proved that in countries with densely and centrally organized labor unions, it is easy to promote the growth of the economy and reduce the levels of inflation and unemployment significantly when labor unions engage in negotiations with ruling regimes. However, in countries where labor movements are weak, governments can endeavor to pursue their partisan macroeconomic goals and strategies to achieve beneficial outcomes and this often leads to relentless industrial movements due to lack of collaboration from workers (Michael, Garrett and Lange 542). Thus, this demonstrates that labor unions remain significant in the 21st century by fostering a positive industrial and political environment for workers and governments. Promotes Better Pay and Equality Labor unions are responsible for better pay of their workers by indiscriminately fighting for employees’ fair pay and equality at the work place. The world has witnessed several strikes that have called for harmonization of salaries to bridge disparities in wages for civil and public servants (Rees 173). Some studies have highlighted the importance of labor unions in promoting increased wages for workers worldwide denoting the crucial role that labor unions play globally (Parsley, 31). For instance when employees have no one to fight for their wage increase, rates of inflation hinder their purchasing powers, thereby forcing them to adopt poor living standards to cope up with skyrocketing living costs. However, strong labor unions increases equality in remuneration of workers demonstrating their crucial role in the volatile political and economic environment of the 21st century. In addition to fighting for equality in remuneration scales, labor unions have proved vital instruments for fighting against various forms of discrimination at work. Studies have shown that strong labor unions have brought equality in promotion opportunities at work place environment by working closely with both members and employers to pinpoint any cause of distress in employer-employee relationships, and this created more attractive work environments across the world demonstrating the crucial role labor unions continue to play in work place environments globally (Meng 1642). Unions give their members a unanimous voice. The workers unite for a common purpose, and this makes them feel important and respected. When their leaders are invited to dine with the big people in the government while negotiating for deals that would benefit their members, it means a good start for businesses (Huselid 636). Large businesses are characterized with more union actions probably because they do not give their workers the attention needed. It is, therefore, good to understand that strong relationships with the workers results into a better business because workers have the best ideas for improving the business since they are on the ground floor and have the firsthand experience of workflows (Meng 1643). Thus, well-treated employees are motivated and committed to the growth of the business (Huselid 635). Conclusion Labor unions are important organizations that help the workers to collectively fight for their interests at work. The labor unions are less evident in the private sector than in the public sector across the world. They are very instrumental in promoting better wages, fighting discrimination at work, ensuring that their employers, guaranteeing job security and boosting employee morale, respect all the employees. Studies have shown that workers who are covered by the labor unions lead better lives and are happy and motivated. Happy and motivated workers have led to the increased productivity in many organizations. Labor unions are therefore necessary movements that should be allowed to thrive in democratic and developed economies of the world because of the benefits they accrue to both the employer and the employee. Despite these advantages, labor laws have a few disadvantages especially on the side of the employers. In a study that was conducted in America, labor unions were crowned with some negative impacts on businesses where 46% of the Americans expressed that labor unions were hurting companies. In this study, however, labor unions received a higher approval rate of 51%. This just shows that despite the positive impacts, labor unions actions often lead to losing of profits especially when they mobilize their workers into strikes (United Sates Department of Labour). Works Cited ALL-CIO. Global Trade Unions. 2015. Web. December 4, 2015. Alvarez, R. Michael, Geoffrey Garrett, and Peter Lange. "Government partisanship, labor organization, and macroeconomic performance." American Political Science Review 85.02 (1991): 539-556 Becker, Brian E., and Craig A. Olson. “Unions and Firm Profits. “Industrial Relations 31.3 (Sept. 1992): 395–415. Guest, David, and Kim Hoque. “The Good, the Bad and the Ugly: Employment Relations in New Non-Union Workplaces 1.” Human Resource Management Journal 5.1 (Sept. 1994): 1–14. Huselid, M. A. “The Impact of Human Resource Management Practices on Turnover, Productivity, and Corporate Financial Performance.” Academy of Management Journal 38.3 (1 June 1995): 635–672. Keller, Larry. “The Pros and Cons of Joining a Labor Union.” Fox Business. 10 Apr. 2012. 4 Nov. 2015. Meng, Ronald. “The Relationship between Unions and Job Satisfaction. “Applied Economics 22.12 (Dec. 1990): 1635–1648. O’Grady, Siobhán, et al. The World’s most powerful labor unions. Foreign Policy, 2 Sept. 2013. Parsley, Christopher J. "Labor union effects on wage gains: A survey of recent literature." Journal of Economic Literature (1980): 1-31. Rees, Albert. The Economics of Trade Unions. 3rd ed. Chicago: University of Chicago Press, Jan. 1989. Simms, Melanie, and Andy Charlwood. "Trade unions: power and influence in a changed context." (2010): 125-148. United Sates Department of Labor, (n.d.). Trade Act Programs: Statutes and Regulations. 2010. Web. December 4, 2015. Read More