Labor Relations and Labor Unions' Effect on the American Companies - Literature review Example

Labor Unions Labor unions are interest groups whose main purpose is to protect workers’ interests in regard to salaries, working conditions and other benefits affiliated workers (Asher, 2001). Arnold (2007) observes that labor unions focus on areas such as employment and the wage bill in regard to maximizing income. Therefore, labor unions are interest groups that consist of a band of workers led by common leader or leaders. These groups try to safeguard the welfare of workers (its members) from exploitation from their employers and wrongful legislation from the government (the ruling class). Labor relations concern the interaction between labor unions, its members and the government’s role in safeguarding the interests of the involved parties. In view of this paper, the National Labor protection act of 1935 has three main definitive features. One is to safeguard the interest of the employees and the employers through collective bargain. Secondly, employees have the right under law to voice their opinions and should not be subject to wrongful acts such as firing in the event that they do so. Thirdly, employers cannot refute collective bargaining (Arnold, 2007). Labor relations and labor unions have a tremendous effect on the running of organizations in America. Labor unions affect wage rates in the sense that they determine the minimum wages of employees. As such, an organization can only take on employees in relation to their ability to supply the minimum wage required. Some research has shown that unions may increase the productivity of an organization. Unions may decide to train its members to attain certain standards of skills, in an attempt to ensure their employees receive adequate remuneration. In doing so, employers utilize the skills of the employees thus increased production for the organization. Arnold reflects that labor union activities may affect the distribution of companies. For instance, company’s movement to the south decreased after companies realized unskilled, non union affiliated labor is more expensive than skilled union labor. Unions achieve these effects through closed shop and open shop strategies. Closed shop strategy stipulates that an employee can only work when they join a labor union. On the other hand, an open shop strategy is where the employee can commence work but should join a union after a certain period (Arnold, 2007). Change a key driving force for the existence of Labor Unions. For instance, changes in technology led to the need to safe guard workers against the increasing redundancy discharges. Employee relation strategies have also evolved especially with the change in human resource management strategies. The human resource section of organizations tries to keep at par with these changes in various ways. In modern times, employees feel the need to increase the productivity of their employees without the cost of a law suit. As such, they adopt strategies such as flexi-time or shifts. These strategies ensure that employees work at the required amounts of time. Other strategies such as flexi-time prove efficient in improving employee productivity as the employee feels some sense of autonomy accorded to them. The increase of minimum wages has also led to the improved lifestyle of employees thus their motivation to work. Henry Ford the pioneer of ford motors saw the need to motivate his employees in a way that benefitted his company and the employees. He adopted the shift working system and increased wages by up to 50%. Although Ford was strongly against Labor Unions, these principles he utilized ultimately led to the success of his company (Wheeler, 2002). With the increased need to treat employees as essential features of an organization and not just a means of production, labor unions increased their campaigns for the humanization of the work force especially in the 18th and 19th century (Wheeler, 2002). The policies they fought to enact such as improved healthcare have transformed the working environments. Human resource has also improved the relationship between organizations and employees. Employee grievances rarely make it to the trade unions as there is an internal grievance handling procedure. These factors may significantly contribute to the decline of labor union membership. By the year 2002, only 13% of employed Americans were members were members of trade unions. However, the improved relationship between employees and employers has reduced the occurrence and the magnitude of strikes over the centuries. Employers also see the need to develop their employees through training. The feeling of growing with the organization enables organizations to fully harness the potential of its workforce. In summery, organizational performance has improved with the adoption of new strategies and policies especially in regard to compensation and reward. This is because employees are more satisfied and hence have morale to work (Wheeler, 2002). Politics is at the moment, the most noted hindrance to the functioning of labor unions. This is because labor unions evolved from massively social movement groups to bureaucratic politically oriented organizations. Asher (2001) observes that, labor unions could be facing hard times citing issues such as the political and economic power of the labor union leaders. The demographics of labor unions suggest that some unions predominantly affiliate to certain political fronts. Asher notes that Ohio Education association, between the years of 1990-2000, had a majority of its members supporting republican ideologies while others held different views. For those leaders who fail to appease the majority of its members, there is a decline in membership and loyalty to the Trade Union. Asher believes that, union leaders lag behind in regard to relevance to the political and economic climate. The decline of membership in labor unions in turn reflects on the flustered future of labor unions. Also, state and federal laws take on a restrictive nature in regard to labor union activities in political fundraising, spending and picketing. The dominance of republicans in the political arena in the past decade can bear weight on the unfavorable climate labor unions are facing (Asher, 2001). However, the success of labor unions in these same troubled decades show that labor unions are far from irrelevant and out phased. For instance, there is the increase of minimum wage and student loans. Though the labor unions stand on free trade has some ridiculous bearings, they are putting up a vigorous fight. Wheeler (2002) is of the view that labor unions are pragmatic in nature and are, therefore, likely to adopt a trial and error approach to survive in the 21st century. This, however, depends on the union leader’s ability to stay relevant and intelligently cope with change. For instance in 2001, the AFL-CIO decided to seek to represent retirees. Students are also becoming a significant driving force for the labor union activities. Focus groups that need the services of labor unions still exist; therefore, labor unions are relevant. This includes mostly women and immigrants. Also, analysts see the recent wave in politics favoring democrats as a good sign for trade unions. As such, labor Unions are still relevant in the United States despite their shortcomings (Wheeler, 2002). References: Arnold, R. A. (2007). Economics. New York: Cengage Learning. Asher, H. B. (2001). American Labor Unions in the Electoral Arena. Maryland: Rowman & Littlefield. Wheeler, H. N. (2002). The Future of the American Labor Movement. Cambridge: Cambridge University Press. Read More