Mgmt 583 Chapter 1: Introduction Fall 2008

Labor Relations  Labor Relations – a set of processes by which unions and management achieve their goals while accommodating each other’s needs. a.k.a. Industrial Relations a.k.a. Labor-Management relations  The Labor Relations’ environment is heavy regulated.

The Parties  Employers/Management Line management HR management  Unions  Government

What Unions Do  Permit workers to collectively negotiate for pay and working conditions.  They allow members to exercise monopoly power over their employers by controlling the supply of labor. Union monopoly power costs the GDP about 1.2% per annum. It would cost more if unions were not in decline. In 2007, full-time wage and salary workers who were union members had median usual weekly earnings of $863, compared with a median of $663 for wage and salary workers who were not represented by unions. [30.2% more]

Trend in Union Membership  %  %  %  %  %  %  %  %

Union Membership  The unionization rate of private sector employees was 7.5 % in Transportation 22.1%. Utilities 22.1%. Manufacturing industries 13.0%.  The unionization rate of government workers was 35.9 % in Teachers had the highest unionization rate, at 37.2 %. Protection agencies (fire & police) at 35.2%. Source: U.S. Bureau of Labor Statistics (January 25, 2007). Union members in Union Members Summary. (accessed August 20, 2008).

States with the Greatest Union Membership  Four states with the highest union membership rates in 2007: New York (25.2%). Alaska (23.8%). Hawaii (23.4%). Washington (20.2%).

States with the Lowest Union Membership  The four states with the lowest union membership rates in 2007: North Carolina 3.0% Virginia 3.7% South Carolina 4.1% Georgia 4.4% Mississippi 6.7%

BLS Union Members Summary  Workers in the public sector had a union membership rate nearly five times that of private sector employees.  Education, training, and library occupations had the highest unionization rate among all occupations, at 37 percent.  The unionization rate was higher for men than for women.  Black workers were more likely to be union members than were white, Asian, or Hispanic workers.

Demographics of Union Membership  Union membership rates were higher among men at 13.0%, than for women at 10.9%.  Workers ages 45 to 54 were more likely to be unionized than either their younger or older counterparts (16.0%).  Workers in the age category 16 to 24 were the least likely to be union members (4.4%).

Demographics of Union Membership  Blacks were more likely to be union members (14.5 percent) than were whites (11.7 percent), Asians (10.4 percent), or Hispanics or Latinos (9.8 percent).  Full-time wage and salary workers who were union members had median usual weekly earnings of $833, compared with a median of $642 for wage and salary workers who were not represented by unions. Source: BLS Union Members Summary 2008

Largest Labor Unions  Union members with >1M members: National Education Association (NEA) 2.7M Service Employees International Union (SEIU) 1.46M United Food & Commercial Workers International Union (UFCW) 1.38M International Brotherhood of Teamsters (IBT) 1.35M American Federation of State, County & Municipal Employees (AFSCME) 1.35M Source: Labor Research Association

Willingness to Vote for a Union  Attitude of local community toward unions. Favorable v. unfavorable. Mississippi v. Michigan.  Peer pressure  Belief that union will be successful Grievance handling Bargaining demands

Collective Behavior  Collective Behavior – usually results from coming together to counter a mutual threat. Dependent on: Group Cohesiveness Class consciousness External threat

Factors Affecting Cohesiveness  Greater agreement on group goals, greater the cohesiveness.  Greater the similarity of members (i.e., skills, opinions, attitudes, interests, background, etc.), the greater the cohesiveness.  The more frequent the contact among group members, the more cohesive.  The smaller the group the more cohesive.

Factors Affecting Cohesiveness  The more isolated the group, the more cohesive. Physical barriers. This forces proximity and interaction.  The more intergroup competition the more cohesive.  The greater the groups success in achieving group goals the more cohesive.  A real or perceived threat increases cohesiveness.

Why Employees Organize  Dissatisfaction a necessary but not sufficient cause for successful organizing campaign. Working conditions Wages and benefits Supervisory practices Promotion/advancement policies Job security

Formula for Employees Organizing Successfully  Dissatisfaction is present and they believe that they are individually unable to change the conditions causing their dissatisfaction.  A majority of the employees must believe that collective bargaining (i.e., a union) will improve the situation.  This implies that the benefit from improving conditions out weighs the cost of union dues.

Craft Unions  Union membership is limited to members of a specific craft (example: IBEW, UBCJA).  One craft, one union.  Exercise economic power by controlling the supply of the craft.  Control apprenticeship.  Trace history to the guilds of the Middle Ages.

Industrial Unions  Union membership open to employees of a specific industry (example: UAW, USW).  One industry, one union.  Exercises economic power only by political fiat.  In recent years, industry designations have become meaningless.

Trends in the Labor Movement  Greater female participation in the workforce.  Greater ethnic minority participation in the workforce. Fewer skills (LIUNA and Hispanic janitors in L.A.). Lack of mathematical and scientific skills. Lower educational achievement. Multilingual workplaces. Immigration concerns.  Interestingly, unions used to be radically opposed to immigration, now they are supportive.

Trends in the Labor Movement  More organizing efforts among professional and white-collar employees. Unions have problem with blue-collar image. Job security offers an incentive for workers to organize.  Emerging two-tiered economic system based on education. Roughly 20% of the working population has four years of college. Unions have to deal with a new underclass of workers who lack the skills to be successful employees.

Why Unions Have Declined  Wages are more often determined by the market- driven economy than collective bargaining. Competitive pressures on employers. Particularly global competition.  Employers control job content.  Employers have been involved with the U.S. Education system which (in theory) develops skills for future employees This ignores the effects of gov’t and the NEA on public education.

Why Unions Have Declined  Governments now provide many worker protections once offered only in CBAs. OSHA FLSA Title VII ERISA  The large American middle class is largely anti- union View unions as contrary to efficiency and productivity Opposition to income redistribution, which unions support. Though unions see them as a possible target for organization efforts.

Why Unions Have Declined  Private sector employers have taken proactive steps to avoid organization. Competitive wages & benefits Participative leadership styles.  More companies are using employee empowerment programs. TQM CQI