Working without Trade Unions - Coursework Example

Working without Trade Unions Working without Trade Unions Introduction Trade unions are associations of workers formed with the intention of protecting their interests in the workplace. Trade union membership originally began with skilled workers – such as plumbers, printers or carpenters (Theses on the Trade n.d.) – that lent to the union reference as a trade union (Trade Unions 1980) or craft organisations (Theses on the Trade n.d.). Trade unionism has been in existence in the UK for more than 200 years, as illegal associations at first but gained legal recognition later (Trade Unions 1980). In 1978, statistics revealed that membership with numerous trade unions total to around 13 million workers (Trade Unions 1980). Unions existing at present serve the interests of particular type of workers or industry (Theses on the Trade n.d.). Through the unions, the workers can bargain with the employers to grant them increases in wages or salaries, specific working hours, benefits, or day-off from work. Negative Impact of Trade Union Unionism was primarily established to protect the interests of the workers. However, it has also been used by workers to blackmail employers. Running a company would entail a lot of factors to consider and has to maintain a certain margin of profit in order to survive the competition. Workers and employees though would want to get more from their employers by using various legal modes to get more benefits. Thus, at a slight movement in the economy or inflation, they would lay down their demands to the companies. There is a collective bargaining agreement or CBA that governs the relationship of employers and workers. The CBA is a contract of labour between the company and the workers. It exists at a certain period of time after which, it has to be renegotiated by both parties. At such renegotiation, the workers present their new demands which the employer may or may not concede. At the renewal of the CBA contract, the workers would push hard so that their demands will be granted by the employer. Companies that operate well and earn more profits may grant the economic demands of the workers. However, with the erratic economic conditions resulting from the recent global slump that affected banking and financial institutions, as well as several industries, CBA renegotiation or too much demand from the workers can tilt the operations of companies. Radical or extreme unionism that tends to disrupt company operations is bad for the economy and the company. It also fosters unhealthy employee-employer relationship that breeds distrust on the part of both parties. According to Naylor and Santoni (2003, cited in Radulescu & Robson 2006), there would be lesser foreign investments in a country where the bargaining power of trade unions on the aspect of wage is strong. There are studies though that do not support this position. Cooke (1997, cited in Radulescu & Robson 2006) and Cooke and Noble (1998, cited in Radulescu & Robson 2006) said that multinational firms in the US tend to invest in countries with decentralised wage bargaining process, and veer away from strong trade unionism. The Workplace Employee Relations Survey revealed that from 1990 to 1998, companies with unions undergo more closures than plants without unions (Millward, Forth & Bryson, 2001). Generally, companies without unions boomed at an average of 1.4 percent per year within the same period (Millward, Forth & Bryson, 2001). In contrast, firms with unions had been shrinking at an average of 1.8 percent yearly (Millward, Forth & Bryson, 2001). Addison and Belfield (2002) said that the prevailing trend seen in unionised companies is its slowed effect upon employment growth. UKs 1998 Workplace Employee Relations Panel Survey (WER-PS), lasting for eight years, that contained around 50 percent of the 1990 Workplace Industrial Relations Survey (original companies surveyed totals 2,016) revealed that firms that have labour unions existing for a very long time have weak labour productivity (Addison & Belfield 2002). On the contrary, the establishments that discarded unionism have increased productivity in labour and financial rating (Addison & Belfield 2002). The Gallup data (gathered from the Gallup Work and Education survey) with August 2009 being compared with August 2006 survey, the general sentiment of respondents is the negativity labour unions have upon the firms and the general economy (Labor Unions See 2009). The Americans who said that unions harm the economy increased from 36 percent (2006) to 51 percent (2009) (Labor Unions See 2009). But they hurt the non-union members more, the study revealed (Labor Unions See 2009). Better without Trade Unions There are many benefits that can be derived from trade unionism. But trade unions have also been the result of the closure of companies due to strikes and burdensome demands. Trade unions and labour unions have served their purposes in the past. But in the current economic and social conditions, unions might have outlived their usefulness (Say No 2011). The representative trade union in an organisation charges monthly membership fees from members which total run to thousands and millions annually, although the union may not be doing anything for the members in the meantime. Britain’s trade union leaders received more than £100,000 as their 2008 to 2009 annual compensation ascribing them as high-paid individuals, revealed by the TaxPayers’ Alliance (TPA) in its publication “Trade Union Rich List” (Trade union leaders 2010). According to TPA, 38 chief executives and general secretaries of trade unions received more than £100,000 for the said period (Trade union leaders 2010). Many of those highly paid trade union leaders were the same individuals who threatened to strike when the government proposed a cut on government spending on a number of projects (Trade union leaders 2010). Unions add up to the cost of services and products manufactured that leads to higher cost of living (Say No 2011). Moreover, trade unions follow the view that senior workers should be paid higher based on seniority and not on performance and productivity (Say No 2011). Labour unions in the US were reported to be pumping billions worth of money to the Democratic Party (Without Labor Unions 2011). It was posited that without the labour unions, said party would not exist (Without Labor Unions 2011). The relationship of the Democratic Party with labour unions has been attacked by the Republican Party that led to the move to reduce unionism in the state of Wisconsin (Roberts 2011). Democratic votes rely mostly upon labour union membership (Roberts 2011). Trade unions drive companies to pay the workers unreasonable wages which may be beyond the capacity of the companies (Harper 2009). This would result to a hostile environment, and a compromise agreement may only make both parties dissatisfied (Harper 2009). During the recent global economic slump that started in the US, many trade unions in the country cannot negotiate for higher wages and more benefits (Ciavola 2011) since profits were running low. Some trade unions made concession with companies, but in areas where the unions pushed their employers hard on the wall, bankruptcy resulted (Ciavola 2011). This occurred in Ford, GM and Chrysler wherein the companies had to declare bankruptcy because of the stiff position held by the unions (Ciavola 2011). And when closures of the companies result, the employees are the ones who will suffer and not the labour and trade unions (Ciavola 2011). The union may have shown off its power by holding firm to its position, but the ultimate victims with no jobs are the workers, as well as the national economy (Ciavola 2011). Government trade unions may stand firm on their ground and their demands granted, but it is the federal budget that will suffer, with the payment taken from the taxpayers’ money (Ciavola 2011). Labour unions have been demanding too much which are not rationale and outside the scope of real economic conditions (Moore 2003). The unions have “outserved their usefulness,” according to Moore (2003), and they are causing great harm to the workers (para. 3). A company without trade unions would be more flexible in granting higher pay to its workers because it is not tied up with the collective bargaining agreement (Brown & Ryan 2003). The company is also able to make changes in the operational procedures since there is no opposition to the modifications (Brown & Ryan 2003). Without unions, the company can devise personnel policies that would be more advantageous to the workers, without subjecting them to the approval of a trade or labour union (Brown & Ryan 2003). Conclusion and Recommendation Trade unions developed in order to protect the rights and bargain for appropriate benefits of the workers. Unions have achieved considerable success in bargaining with companies to grant their demands. But the unions’ success must not only be viewed on what they can provide to workers. The health of the company and the general economy must also be considered and balanced against the workers’ interests. Companies may grant the demands of trade unions to pacify their grumbling and order the members to return to work and resume production work. This may result to lesser profit on the part of the management. Viewing the scenario on the larger economics of businesses, a company with increasing profit tends to invest back the money into the company to increase production. Surplus profit may be used in the purchase of additional equipment and tools of production, or upgrading the system. This in turn will boost production and the local economy. On the contrary, a highly unionised labour force that resorts to extreme demands and mode to attain such demands would lessen production through strikes and work stoppage. Trade unions are allowed by law to utilize these modes in case of deadlock in collective bargaining negotiations. But on the part of the company, strikes and work stoppages hurt the production process. A one-day work stoppage may cost losses in millions that cannot be recoup in a few months. In production companies that must manufacture according to specific deadlines set by clients, inability to deliver the orders will mean cancellation of the orders and a penalty or surcharge imposed by the client upon failure of the manufacturer to deliver the goods. The continuous struggle between the labour union and management is detrimental to business operations (Mitke 2010). It cannot be said though that trade unionism has not done some good for a business. A few industries can better flourish with unions around. But this occurs when the unions are cooperative with management and fully understands the bleak economic situation the company is undergoing. Union members would not demand additional benefits or would not push for a scheduled collective bargaining negotiation. Based on empirical studies conducted on thousands of establishments that lasted for several years, the best option is for the company to operate without trade unions in order to maximize productivity and profitability. This would enhance the local and national economy due to the smooth circulation of goods and money in the economy. The management though must establish a pro-employee system that would give the employees and workers appropriate wages and benefits that would boost their morale and productivity. It is only when the workers feel that the management care for their welfare that they will be cooperating wholeheartedly in the efforts of the management to uplift the company. References Addison JT & Belfield CR. (2002 April). Unions and Employment Growth: The One Constant? Discussion Paper No. 479. Institute for the Study of Labor. . [Accessed 20 April 2011]. Brown W & Ryan P 2003 May. The Irrelevance of Trade Union Recognition? 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