Unions: Do They Help Or Hurt Workers?
The full and original article was published on Investopedia by Brent Radcliffe
Employers and workers seem to approach employment from vastly different perspectives. So how can the two sides reach any sort of agreement? The answer lies in unions. Unions have played a role in the worker-employer dialogue for centuries, but in the last few decades many aspects of the business environment have changed.
Whether unions positively or negatively affect the labor market depends on whom you ask. Unions say that they help increase the wage rate, improve working conditions and create incentives for employees to learn continued job training. Union wages were 21% percent higher than non-union wages as of 2002, though this figure varies according to industry. Critics counter the unions’ claims by pointing to changes in productivity and a competitive labor market as some of the primary reasons behind wage adjustments. Increases in union wages can come at the expense of non-unionized workers, who lack the same level of representation with management.
Unions may be able to prevent employers from eliminating jobs through the threat of a walkout or strike, which will shut down production, but this technique does not necessarily work. Labor, like any other factor of production, is a cost that employers factor in when producing goods and services. If employers pay higher wages than their competitors, they will wind up with higher-priced products, which are less likely to be purchased by consumers. Increases in union wages can come at the expense of non-unionized workers, who lack the same level of representation with management.
Unions have undoubtedly left their mark on the economy, and continue to be significant forces that shape the business and political environments. They exist in a wide variety of industries, from heavy manufacturing to the government, and assist workers in obtaining better wages and working conditions.