Every working American should participate in a union or an association dedicated to improving the working condition of the membership. Owners and top management of companies tend to contribute and exchange ideas within their trade associations on a regular basis. Participation at this level facilitates the exchange of ideas, garners political muscle and improves a companies ability to incorporate technology. While the strength of organizations that cater to top managers continue to expand those organizations traditionally installed to benefit other American workers struggle to maintain membership.
Though the traditional unions still wield a lot of power within some American companies and the political system, the membership and power of these organizations will continue to diminished if they fail to adopt changes in structure and philosophy. Currently, two major problems exist to undermine the effectiveness of unions to provide proper support to the unions members. One of the two major problems lies in human nature, as the old saying goes power corrupts. During the inception of unions organizers relied on the participation of a great majority of the workers in order to establish the power needed to effect change. Now that unions enjoy membership in the establishment the tendency to ignore the constituency and work for personal gain continues to increase. Further discussion of this topic will continue after the discussion on the second major problem currently eroding stature of American unions.
Unions will continue to decline as a force in our society until the leadership of these organizations cast off the archaic methods used to apply power. The strike is dead! Sick outs gone. Minimum wage and health funds cost workers more and more each year. Buying political power worked in a foregone era which pretty much sums up the techniques employed by union leadership - belong in a foregone
era. Unions now enjoy permanent ranking in the establishment. They need to exert influence as a member of that establishment. Strikes generally do not benefit the establishment of which unions and workers now belong. After over sixty years of strong representation of workers, unions failure to establish a means for the workers to become the owners of the companies qualifies as one of the greatest American tragedies.
Today more and more evidence of the benefits of strong employee involvement surface all the time. Making employees stockholders ensures active participation by the employees in optimizing company profits. More profits allow companies to offer better wages and benefits. Employee ownership of stocks allows another means for employees to profit from the success of their company. It also reduces the competition for those profits between workers and stockholders. Obviously, the traditional strike invokes a confrontational posture and does not facilitate maximizing profits. Instead of the traditional strike union leaders should work for contract language or federal legislation that eliminates the need for a traditional strike.
Instead of walking off the job and trying to stop a company from doing business. Workers should demand a plan which calls for them to work during a strike. Once they vote to go on strike all the pay they would normally receive is diverted to a retirement account and used to buy stock in the company. The company is then forced to match the stock purchase and place those stocks in the employees retirement account. The financial stress on the strikers remains about the same as the old system since they won't receive any pay for the duration of the strike and once the strike ends they won't be able to redeem the stock purchased until they retire (the penalty for early withdraw will be forfeiture of the company purchased stock). The stress on management still includes financial considerations since they must purchase the stocks essentially doubling their payroll expense. This system also adds a worry about losing control of the company. But this system does permit the company to continue doing business as usual. This allows the company to maintain good relations with its costumers and in the end provides more resources for employee benefits. If you are a union representative before advocating implementation of this plan contact me for some more considerations. For instance setting the rules for how each party can "purchase" or redeem the stocks.
Another instance where unions continue to shoot themselves in the foot involves trade agreements with other countries. For instance excepting China into the WTO could be the catalyst for improved worker rights and benefits through out Asia. Instead of spending all their effort trying to force protectionist provisions into the agreement organized labor should consider opening and running factories. For the amount of money and effort required to achieve minimal legislative improvements these organizations could build the factories and hire employees. They can use their political clout
to ensure the parent companies purchase supplies through these companies. This still provides the parent company with a decrease in cost. It also allows the union to ensure the employees receive a good wage and work under satisfactory conditions. The increased wage these workers earn will allow them to purchase more consumer goods and improve the prospect for all American exporters. When other workers see the benefits the union workers receive they will demand the same wages and benefits. Ultimately, the standard of living of the country will equal that of this country and there will be no reason for companies to build new factories outside the borders of the United States.
The minimum wage actually works for unions at least in the short run because it helps eliminate competition and provides protection for big corporations. The minimum wage effectively prevents many individuals from establishing businesses. This is especially true in the entry level job market. What effect does raising the minimum wage have on the hamburger joint industry? Most of these employees are high school students. Big corporations like McDonalds and Burger King already pay wages higher than the proposed increases. So who will this increase affect? It will affect smaller single owner shops and start-ups. So instead of growing and become strong enough to offer higher wages these increased costs cause the smaller shops to either go out of business or not start at all. In the long run the protectionist practice of establishing a minimum wage not only costs the American worker but it costs the American public as well. Artificially set minimum wages do little more than contribute to the high cost of wages putting honest employers at a disadvantage and giving the dishonest employer an unfair and often overwhelming advantage. The minimum wage combined with social security contributions, unemployment insurance and other payroll taxes ensures a preponderance of successful start-ups are run by people willing to disregard the law. These businesses prosper by hiring illegal immigrants or paying wages "under the table"
to those on welfare or unemployment while those
businesses started by honest people lag behind or fail. By creating an environment where only liars and cheats can remain in business we create an environment where everyone we try to do business tries to extract every
ounce of cash while providing the bare minimum of service.
Union leaders continue to employ archaic means because they've become so disengaged from normal employees they don't possess the background to conceive new and effective methods to promote improvements. The leadership of
today's unions tend to isolate itself into a small circle of associates and work only issues that benefit the members of their
clique. This points to a major problem unions must address if they intend to stay strong in the upcoming
millennium. Unions must find a method to assure a larger portion of their member's concerns are addressed and resolved. Currently, members not included in the
clique actually are worse off having a union. If they have a grievance
the company directs them to contact their union representative. Since the member isn't part of the inner circle the union doesn't diligently work for a solution. Thus the member actually expends twice the effort. For the vast number of workers unions are nothing more than a preliminary head that must be cut off prior to dealing with the original monster. Even when done with good intentions failing to resolve a members
grievance
erodes the general populations loyalty to the organization. Here is a true story. Back in the sixties a number of employees filed legitimate
grievances
against a large company. The company knowing it would have to pay did a sweep and fired over thirty people for minor infractions of company policy (playing cards during lunch etc.). They then went to the union and worked a deal to hire the employees back if the union didn't pursue the
grievances. The union accepted and
without telling the aggrieved members allowed the
grievances
to languish until it was too late for any other action. The common
occurrence
of this course of action
insidiously
works to erode the faith employees have in the ability of the union to take care of the needs of the workers. Not only does it affect the attitude of the worker with the
grievance
but it affects the attitude of all the workers familiar with that workers situation. None of us are foolish enough to believe that all the misguided decisions made by union official are made with good intentions.
To often deals are designed with the best interest of the
officials
in mind. The officials may not even "profit" directly. There are instances where unions insist on managing health care funds even though other plans provide lower
deductibles
and better prescription coverage. There's no evidence these officials receive anything more than the thrill of managing a large amount of money. But these officials are so hooked on the power they eagerly defend a system detrimental to the well being of the membership. Sometimes you have to wonder if the officials aren't directly in
cahoots
with management. It used to be common for the auto industry to layoff workers for a few weeks while the factories re-tooled. When layoffs occur it causes increased unemployment insurance so companies don't like to layoff workers systematically. Doesn't it seem
convenient
that every year about the time re-tooling needs done and inventories are high some labor problem
shuts down a key parts maker until inventories return to a more reasonable manner?
More to follow on this issue