Labor Relations, Beginnng or End of the Union - Term Paper Example

 Labor Relations, Beginning or End of the Union? Abstract The paper deals with the existence of labor union and how it may begin or end as it faces various challenges in the society today. For readers of the paper, production has been defined and the factors of production are also explained to grasp the concept of labor relations. Unions are then formed because of employment relations that can be traced back in history in the form of master and slave system. During the ancient times, the slaves gave service from masters who used force. Despite the change of labor relations to employee-employer relationship, slavery and abuse still occur that is why union came to life to protect and support the workers. Labor Relations, Beginning or End of the Union? In the present world, labor has been the main source of income of most people around the world. It has been like that since the boom of industrial age. People work for money as they get paid for equal service or effort they render mostly for companies. Companies also take care of their labor force as those people in the group are the movers of the corporations toward growth. They give compensation and perks to motivate their employees to do their best and improve. In return, the workers render the best of their services, skills and efforts to uplift the status of the company they work for. They learn the importance of efforts to earn money and for personal growth while helping the whole organization achieve its goals. They play a key role in the growth of the business as they use their talents and skills directed by the management. Before anything else, it would help if the concept of labor is defined first as it will serve as a good foundation for understanding the main topic of the paper presented. The actual topic would be related to labor relations and union, so it shows how the basic understanding of the concept of labor would be helpful in tackling that major topic. Labor is considered to be a lay term as most probably people have been hearing it over the news and on all sorts of media. It spans many issues and some of them have been resolved while others are not. Sometimes the issues are even sensationalized regarding labor like having insufficient available labor or work that leads to poverty. In actuality, such a common word like other lay terms is subjected to misinterpretations which require deeper understanding. It has been subjected to debates as it can be interchangeably used with the word play. A good illustration is the activity of a musician, an artist and a sportsman. They all play as everyone may agree with that since they enjoy what they do to the point that those activities are usually done as hobbies. In reality, they are both play and labor as an “enjoyable labor is play and remunerative play is labor,” (Turner, 1919, p. 429). It means that as long as an activity is enjoyable, it is a play and a play that is paid or someone playing and earning at the same time is labor. Labor does not always pertain to serious matters as long as the activity allows the person doing it to earn money. It is also quite important to mention that labor is one of the factors of production. Before understanding the factors, it is necessary to know briefly the meaning of production itself. Basically, production can be defined in various ways. First, it is defined by Anatol Murad as “the creation of utilities,” (Jain, Grover, Ohri & Khanna, 2006, p. 20). It shows how utility is important in making things using the production process. Utility can then be defined as happiness, pleasure or contentment which is somehow related to the act of following the teachings of God. As time changes and modernization takes place, people have somehow shifted the definition of utility from just plain happiness and absence of pain to the modern context of welfare. In business terms, utility is considered to be the characteristics of commodities that attract buyers and satisfy the market. The concept of utility is subjective which makes it hard to measure and gives problems to businesses on how to rate the satisfaction of the customers (Meeks, 1984, pp. 41-42). It is very important in business especially in production to consider the utility that the finished product would bring to the target market. Another definition of production is said by Prof. M.J. Ulmer as any sort of activity that brings an increase in goods and services supplied in a country and also add value (Jain, Grover, Ohri, and Khanna, 2006, p. 20). The definition rendered by Ulmer shows the importance of adding value when production process is done as not all activities bring about value to people or to the economy of a nation. Another meaning of production is said by Robert Awh as “the process by which inputs may be transformed into output,” (Jain, Grover, Ohri, and Khanna, 2006, p. 20). The definition of production by Awh emphasizes the technical aspect of production as the raw materials are changed into another objects or commodities after the process is done. The technical definition of production has a wide meaning which means it is a generalized concept. It deals with the “transformation process which can be directed by human beings, or which human beings are interested in, viz. a transformation which a certain a certain group of people consider desirable,” (Frisch, 1965, p. 3). It means production allows materials to change and create things according to the will or interest of the people. They do the production process to make things to cater the needs and wants of other people. Sometimes needs and wants are used interchangeably as they are required to achieve certain goals. A condition or a thing is a precursor to the actualization of a certain goal which makes a need or a want (Loewy, 1989, p. 188). In business terms, needs and wants differ from each other as the former pertains to the objects that the person must have like food, clothes and house while the latter pertains to the wish of a person that is not required for survival like computers and concert tickets (McGillian, 2004, p. 25). That shows how needs differ from wants as needs are perquisite for sustenance of life while wants satisfy the desires of the people. Now that wants and needs are defined and how they are satisfied by making things through the process of production, it would help to elaborate on the factors of production. Factors of production must be able to answer the following questions: What should be produced? What do members of a society need and want? How should it be produced? Should each person make his or her own goods, or should businesses or the government manufacture them for the entire society? How should the products be distributed? Should the products be given to everyone equally or only to those who can afford to buy them? (Mulcrone et.al., 2002, p. 181). Those three questions are answered by factors of production. First, the needs and wants must be identified and the objects to be produced must be specific. Second, the process or methods must be considered as to what ways are required to get the finish products. Third, distribution is also important since the producers must know how to market and send the products to designated spots or to the places where those things are needed. The next part is the definition of factors of production. According to Ulmer, factors of production are “the sources of services which enter into the process of production,” (Jain, Grover, Ohri, and Khanna, 2006, p. 20). The factors are the sources that are responsible for production to occur. Without them, production is not possible. They are the ones that are requisites for production process to happen. Another meaning of factors of production relies on the understanding of Marshall as he said it as the fundamental requisites in production are man and nature (Jain, Grover, Ohri, and Khanna, 2006, p. 20). With that kind of definition, it leads to the different factors of production. Since the definitions of factors of production have been laid down, the next portion deals with the components of factors of production. The factors of production are commonly made up of the three factors namely land, labor and capital. Other sources consider the factors of production to be more than three wherein organization and enterprise are the additional two factors. The factors of production are required for production to occur in a society. They do not compete or replace one another as they all work to complement each other. Once one of them is gone whether it is the labor, capital or land, production is impossible (Hunt, 2003, p. 100). They must cooperate with one another and never antagonize. Take for example; land is important as it serves as the location for production. Also land is important especially for agricultural purposes as it is much needed by crops being grown. It is said that agriculture is land-intensive as it requires much amount of soil for the plants to grow. Once land is considered in economics, it is not limited to the surface only, but also the rocks, water, minerals and all of nature without human intervention. It was Thomas Malthus and David Ricardo who considered land as a factor of production as they thought that land has fixed quantity and only influenced by the Law of Diminishing Returns (Hill, 2006, p. 148). At present, it is already known that land is not fixed as its particles can be washed out by water and also other factors of production are subjected to the Law of Diminishing Returns. Another factor of production is capital. The definition of capital varies with different people. For a farmer, capital can be his machineries, animals and agricultural structures as they are his assets. A capital may be in the form of monetary value of part-ownership in a company by a shareholder. The concept of capital is more specific as an economist defines it. An economist distinguishes the consumer goods like clothes and food from producer goods like machines and factories that are desired to make production possible. Those producer goods are said to be capital goods. For a more complete definition, capital can be considered as “anything which has been produced and is used to increase the effectiveness of current productive activity” or “wealth employed in the production of further wealth,” (Hill, 2006, p. 151). It means capital is the thing needed to produce more and boost efficiency of the productive process. That means capital is also a commodity and it is used for production to provide the society. Reward is then given based on its efficiency. According to ideologist, capital is a tool like a blast furnace used in creating steel and a shovel used for digging. With that, ideologist claimed that capital is indispensable (Hunt, 2003, p. 100). Other factors of production are labor, organization and enterprise but labor will be discussed in detail later on. Organization is the next factor of production which is not part of the original three factors of production. It is considered to be a special type of factor of production. It is separated from labor as it deals with a group that has a system or goals. Its primary consideration is the management of production (Jain, Grover, Ohri, and Khanna, 2006, p. 20). It deals with the control, maintenance and improvement of production. In essence, an organization is not limited to production as it really means to be “a group of people working together in a formal way,” (Bott, 2005, p. 41). It is organized which is the root word of organization itself. It should be a group only but it must be systematic with rules and plans to achieve. It can also be defined as “An organization is a collection of people who interact and work towards a common goal and whose relationships to each other are determined by a laid down arrangement or structure,” (Coates, 2001, p. 1). The definition set by Coates (2001) shows how the structure and arrangement are important in turning a group into an organization. It shows how important a purpose is for an organization to work. An organization can come out not only in businesses but in other areas as well like school organizations, banks are even organizations, and charities are also organizations (Bott, 2005, p. 41). The next one is enterprise which is another specialized factor of production which shows the importance of humans in production process. It allows innovation and inventions to take their shapes to improve the lives of people (Jain, Grover, Ohri, and Khanna, 2006, p. 20). The focus of the paper is on labor relations that shows labor which is a factor of production must be defined and thoroughly understood first to elaborate and go deeper into the importance of labor relations. Labor is then said to be part of the original three factors of production. It is important is it deals with humans in production activity. All mental and physical skills are put into efforts for creating products, and the activities are done by people for rewards (Jain, Grover, Ohri, and Khanna, 2006, p. 20). Like its definition, labor is pursued by people for rewards which are usually in the form of money. Thus, it becomes the popular way of obtaining money, so people think of it as a good exchange. In short, labor consists of people who perform the work (Mulcrone et.al., 2002, p. 181). It is also said that more consumers or customers in the market creates more workers for production. The dual nature of man being both a producer and consumer at the same time makes him a very important component in production (Hawke, 1980, p. 43). Going on to the main topic which is the labor relations, the concept is then bounded in interaction as the labor consists of workers and how they interact with another party which is the firm. In employment relation, the common scenario falls under the concept of “masters and servants” through the existence of “employer” and “employee,” (Moore, 1977, p. 392). That concept of having masters and servants can be traced back in history. Changes had happened in the labor system especially in the United States, but the pattern almost remained the same just like the master and servant system which started in the Middle Ages. That system continued despite of the existence of other order of feudalism to be scattered in newly established institutions. The role of the master has been replaced by the firm owners and managers and their privilege is still the same. The resistance rendered by the workers is still the same and even the legislation pressurizes the change in the system. It can also be traced back in the performance of the government in the past on how they deal with the relationships between the owners and the workers (Orren, 1999, p. 4). The relationship between the employer and employee or the so-called employment relationship is usually compared with the master-slave relationship but they differ in voluntariness (Ellerman, 2006, p. 324). Perhaps the master and slave system exhibits harshness through force while employment relationship does not use force for the workers to follow. It is also said that the duration scale is not the distinguishing factor for the difference between the two kinds of relationships (Ellerman, 2006, p. 324). The origin of employment relationship can be traced back in master and slave relationship as the former exhibits the following: (1) The dominant role of employers in defining the work activities of many employees, (2) The difficulty of proof regarding the respective roles of employers and employees in initiating employee misconduct, and (3) The desirability of linking the interests of employers to the misconduct of employees to ensure that the former will monitor and discourage employee misconduct (Gruner, 2004, p.2-30). First, it shows how employers dominate the work of employees which is possibly the responsibilities of the employers, but it may also show how a master dominates his slaves. Second, the proof regarding the roles of both parties can be traced back in the way master and slaves deal with misconduct. Lastly, there should be a desire in the side of the employers to correct and monitor the employees that can be compared to how a master watches his slaves. When the employers or the management go beyond the allowed handling of workers like violating the freedom of employees, it can be considered as a modern slavery. Government or the state then intervenes when harm is done by the employers on their employees. Firing employees will not fall under the category of harm as it does not inflict any physical damage. When the inflicted action on the employees leads to physical harm, then the pressure is in the form of violence that is clearly enslavement. It may differ from other workers who consider themselves slaves as they speak figuratively in terms of being entrapped by their wages. In reality, salaries do not enslave them but certainly violence does enslave people (Scriven, 1997, p. 71). Abuses can also occur in the corporate world recreating the concept of slavery. When that occurs, corporate slavery exists. Usually it exists in the form of discrimination especially to women despite of their academic achievements and advancement in career. For those corporate slaves, their boss is the center of their lives. They work so hard to please them and wait him to give them praises. The boss or any person higher than those “corporate slaves” steps on them to get ahead of the promotion and even take credit for the work of those corporate slaves. Those having the corporate life and may succumb as slaves have wide variety of skills and great capacity to perform well but they have the fear and low self-esteem (Valentine, 2007, p. 80). The relationship is not limited to master and slave concept as there is other forms of legal relationships. One is principal-agent relationship wherein the agent represents the principal and the agent has a degree of freedom to act and decide on matters. Another relationship is employer and independent contractor. In legal sense, independent contractor is not considered as an employee as his performance not controlled by the employer (Meiners, Ringleb & Edwards, 2009, p. 351). Since the paper focuses on labor unions, the employer-employee relationship is the center of attention. To prevent discrimination and abuse in the corporate world especially towards employees, union comes to life. The union is the support group for employees which are also composed of employees themselves. There are many reasons for establishing and joining a union. First, the alienation theory explains the work conditions as a reason for having a union. Employees who feel alone or culture-shocked seek the comfort of a group through a collective action. They might get alienated due to lost in contact with their own work and the finished products are taken away. They might also lost participation in the work when machines are used for repetitive activities instead of manual labor. Also they may feel tired of having no real relationships and interactions as a result of heavy competition. Through the union, the employees are able to speak their minds and relieve themselves from burdens (Holley, Jennings & Wolters, 2012, p. 178; Budd, 2010, Chapter 6). That shows how a union can become a support group to assist the employees with their needs. Second, the Scarcity Consciousness Theory explains the need of the employees for job security. Employees assume that their jobs will be protected by union especially for manual laborers where they believe that opportunities are limited (Holley, Jennings and Wolters, 2012, p. 179). Also the union can make negotiations regarding the work nature and rules to ensure the needs of the workers to be met. The union protects the employees from maltreatment, unjust wages and violations. They can make collective bargaining with the employers and have the support of the union (Holley, Jennings and Wolters, 2012, p. 429; Budd, 2010, Chapter 7). The union can also do the following to uplift the wages of its members: Increase the demand for the good they help produce and thus the derived demand for their own labor services. One way to increase product demand is to advertise and persuade the public to purchase only those goods manufactured by union workers. Another approach might be to pressure Congress to impose restrictive tariffs or quotas on, say, steel imported from South Korea, so that U.S. consumers will demand more steel produced by U.S. workers. Moreover, teachers’ unions often lobby for increased government spending on public education, and aerospace workers push for increased spending on national defense. Support increases in the minimum wage laws to increase the cost of unskilled labor. A rise in the wage rate of unskilled labor results in a decrease in the quantity demanded of unskilled labor demanded and an increase in the demand for more skilled, union workers. Increase the productivity of union members. By establishing grievance procedures, unions may reduce turnover and promote stability in the workforce – conditions that enhance workers’ productivity, thus increasing the demand for union workers (Carbaugh, 2011, p. 160). With the first way on how a union can uplift the earnings of its members, the union itself advertises and persuades the public to buy the goods that the union members have helped to produce and in turn the union members can demand for increase in wages. The second way on how a union can uplift the earnings of its members deals with increasing the need for skilled union workers and decreasing the need for unskilled laborers leading to increase in the wages of unskilled workers. Lastly, rules can be setup by the union to enhance the efficiency and productivity of its members that leads to greater demand for those workers. Despite of the positive purpose of the existence of a union, its popularity is decreasing in the past decades especially during 1980s and 1990s as affected by politics. Member contribution increases at the same time as their participation in political campaigns increase. The membership in union dropped to 13.9 percent by 1998 from 33 percent membership in 1945 (U.S. Department of State, n.d.). The state or the government has the primary responsibility or control over union creation, so most probably the politicians have big effects toward the decline of union membership. The regulation and assistance in union creation is provided by the National Labor Relations Board. With that, it was observed the decision-makings of the politicians who are ought to office in that Board and their ideals have affected the outcome (Tope, 2007, p. 20). Past researches that were checked by Tope (2007, iii) suggested that “when conservative politicians hold office, their policy preferences favor businesses and other affluent constituents.” The opposite is also true that when presidents come from the Republican Party, the favored side by the NLRB is the employers. Another reason for the decline of union membership is automation. That is a big challenge especially to manual workers as they are continuously replaced by machines as those equipments save time and money by boosting productivity and minimizing the expenses of the companies. In response, union dared to combat the scenario by “free retraining, shorter workweeks to share the available work among employees, and guaranteed annual incomes,” (U.S. Department of State, n.d.). Globalization is the reason for the union decline in general as technology speeds up and manual workers are replaced by powerful machines. Also companies lay-off and dare to have contracts with other smaller agencies for contractual hiring and outsourcing (Budd, 2010, Chapter 11). The shift in industry employment is connected to the decisions and actions made by the companies in response to globalization. That shift had hit the unions at their weak point. Contractual, part-time, temporary and young workers have occupied most of the jobs available today and they are not covered by union. Also the industry relocated to places where unions are weaker (U.S. Department of State, n.d.). In another perspective, the labor union is affected by external forces such as structural adjustment of labor market and the income distribution. Also varying policies affect the existence of union. If there is the so-called trade liberalization, union will most probably flourish as there will be less control over their existence (Berry, Gunderson and Reynolds, 1995, p. 1). With that, it shows how labor union is going to exist in the twenty-first century. They may need to make many changes when it comes to leadership within the union and for politicians, they must strengthen the support that may promote the balance and fairness in labor relations or employment relationships. Also the workers must look for alternative ways to learn not just through the traditional methods to gain new skills and improve their prices in the labor market. References Berry, A., Gunderson, M., and Reynolds, C. (1995). 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