Tag Archives: Labor

What Are Labor Unions

Unions Explained, the Pros and Cons

There are a lot of misconception surrounding unions. Politicians love to talk about unions, most showing support on the campaign trail. However, politicians rarely do anything with regards to unions. Some politicians are vocally opposed to unions noting the adverse affects a union might have on a business or the economy. Though for many Americans, there’s still a lot of confusion with regards to unions.

For almost a century, unions have been a major part of business in the United States.  Greatly benefiting from FDR’s New Deal economic policy, unions grew at extraordinary rates in the 1930s.  Today, labor unions are much different.  With manufacturing jobs having been shifted towards automation and some overseas, the union-heavy labor fields aren’t as big.  Still, millions of Americans belong to a trade union.

First off, it’s important to understand the definition of a union or trade union.  An organization of workers who have come together to achieve common goals such as protecting the integrity of its trade, improving safety standards, achieving higher pay and benefits such as health care and retirement, increasing the number of employees an employer assigns to complete the work, and better working conditions.

That definition is pretty straight-forwards and basic.  Additionally, there are two types of unions.  They are as follows;

Craft (or Trade) Union

Craft unions are typically independent of a particular organization or employer.  Craft unions consist of workers who specialize in a skill and profession.  Doctors and lawyers are part of craft unions.  Tests and a required skill set may be part of a craft union.

Industrial Union

Industrial unions consist of all workers that are in the same trade or work for the same employer.  They may not be skilled workers.  Often times, in industrial unions, all employees at a certain company are required to join a union.  This ensures that the union can control the supply of labor.

Unions can end up being controversial.  Different sides of the political spectrum have a different understanding of the pros and cons of unions.  If you’re economically conservative, you’ll probably see the cons more than the pros.  Conversely, if you’re economically liberal, the pros are probably more evident than the cons.  Both sides are right to some degree.  Unions have both helped workers and organizations while they’ve also done more harm than good.

Unions; the Pros

The main positive result attributed to unions is higher wages, better working conditions, and trade protection.

One major reason that workers decide to unionize is to avoid low wages and poor benefits.  When workers unionize, they can choose to strike or restrict the availability of labor until their employer meets their demands.  These demands can range from better health benefits or higher wages.

A second reason workers unionize is to campaign for better working conditions.  Better working conditions are not only beneficial to workers but also the employer.  Happy and motivated workers can perform better-reducing inefficiencies.

Unions; the Cons

Unions can end up causing adverse affects not only to businesses but also those in the union.  Large unions are often of the most concern to businesses.  Large unions, typically industrial unions, have an extraordinary amount influence on a business.  When large unions abuse their power, it can lead to higher wages, however, this could mean lower profits for the business.  Though unions will often get workers higher wages, the higher wages have effects on businesses.  These adverse effects could be reflected in layoffs and reduced profitability.

Additionally, some law firms and organizations have noted abuse by unionized workers.  Often times, unionized workers are protected and are very hard to terminate.  Therefore, some unionized workers take advantage of their employer.  Along the same lines, feeling immune from disciplinary action, some unionized workers by complete their job inefficiently.

The main concern with unions is that unionized labor will lead to an increase in costs and therefore, reduced revenue and profitability.

Overall

This post shows only a small portion of the union debate.  Unions are a complex issue.  On one hand, they are able to advocate for living wages, better working conditions, and increased benefits.  At the same time, inefficient and reduced revenue can arise from unionized workers.