Question

Modern labor unions in the United States can trace their origins to the 19th century and started gaining footholds in many major corporations almost a century ago. For example, Boeing signed its first contract with a labor union in 1936, and Ford signed its first labor contract in 1941. Today, unions at those and many other “old-line” businesses still weld signifi- cant power and represent thousands of workers.

On the other hand, many newer businesses have suc- cessfully avoided unionization among their employees. Their arguments against unions include the following:

“With the vote against third-party representation, our employees have made it clear that they prefer a direct connection with Amazon.”

—Mary OsakO, aMazOn spOkespersOn1

employees remain nonunionized, and the UFCW still faces an uphill fight.

Starbucks has also faced union challenges. For its part, the coffee giant has helped minimize unionization interest among its employees by treating them very well. Even part-time workers at Starbucks get benefits, for example, and the firm offers many opportunities for advancement. Still, the Industrial Workers of the World union continues to explore unionization interest among Starbucks employees. The firm recently created a policy that its workers could actually wear a button support- ing the union but a limit of a single badge less than one inch in diameter was imposed. The union filed a legal claim against Starbucks, but the company policy was upheld in court.

Various unions, including the International Association of Machinists and Aerospace, a trade union of the AFL-CIO, have also tried to unionize workers at Amazon. Recently, for example, this union managed to gain government approval for a union vote at an Amazon facility. While the majority of workers ended up voting against unionization, the mere fact that they managed to secure the election was seen by the union’s leaders as at least a minor victory.2

Think iT Over

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Unions constantly push for higher wages and expensive benefits to the point of reducing business competitiveness.

Unions usually want businesses to retain and reward workers based on seniority rather than performance.

? Unions aggressively fight job cuts and employee layoffs.

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Unions have the ability to strike, potentially crippling a business for an extended period of time.

Unions push for highly restrictive work rules, limiting a firm’s flexibility to reassign workers to other jobs or change the scope of a worker’s job.

Firms such as Walmart, Starbucks, Google, and Amazon are at the forefront of large younger businesses who work consistently to thwart efforts to unionize their employees. Walmart, in particular, has had several major skirmishes. Some Walmart workers complain about low wages, poor benefits, a lack of full-time jobs, and erratic and unpre- dictable work schedules. For its part, Walmart warns that unionization could mean the end of employee perks such as paid vacation and quarterly bonuses. The United Food and Commercial Workers Union has made Walmart its major battleground and has won several small battles. The union has also had success fighting Walmart in the courts based on various situations in which the retailer has crossed legal lines in trying to avoid unionization. But still, most of Walmart’s

2. If you were a manager trying to convince your employees not to form a union what might you say to them?

Answer 1

A refined answer to this question depends on the particular conditons facing the firm and the manged group. However, it can be pointed out the the employees that unions can push up wages and cause umemployment. So, while those employees who are unionised may earn somewhat higer wages if the union is able to negotiate well on their behalf, overall employment may reduce and some of the workers trying to unionize may suffer. Union can reduce efficiency in allocation of labor. It can increase inefficiency by retaining unproductive employees, and reduce a firms ability to compete in the market place. It may not always negotiate the best deals for workers, can cause work disruptions, become corrupt and spoil the work environment. In all these ways a union can harm employee welfare in the short and the long run.