HRM 4570 ILR Homework 1

1HRM4570ILRCh1IntrotoILROnlineLecture2019-20audio4.pptx

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Chapter 1

Contemporary Labor Relations: Objectives, Practices, and Challenges

McGraw-Hill/Irwin

Hi Class, Welcome to Industrial and Labor Relations. Today we are going to discuss Chapter 1 Contemporary labor relations: objectives, practices and challenges.

Let’s start with a Chapter Overview

This chapter begins with a brief description of what you will encounter as you begin your study of labor relations.

The three major objectives of the employment relationship (efficiency, equity, and voice) are discussed in detail. Each objective is defined and the examples help illustrate how these objectives can either work together or conflict with each other. You are introduced to the current state of the U.S. labor relations.

This chapter also discusses the differences between U.S. labor law and the labor laws in other countries around the world, two different perspectives of looking at the U.S. labor relations, and the continued relevance of labor relations.

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Understand why studying labor relations is important, and how it can be fascinating

Define the objectives of the employment relationship and of labor relations

Describe the basic features of the contemporary U.S. labor relations system

Discuss the current pressures on the U.S. labor relations system

Learning Objectives

There are four Learning Objectives in this chapter:

1. Understand why studying labor relations is important and how the subject can be fascinating.

2. Define the objectives of the employment relationship (efficiency, equity, and voice) and of labor relations (striking a balance).

3. Describe the basic features of the contemporary U.S. labor relations system—collective bargaining, detailed union contracts, and private sector union density decline.

4. Discuss the current pressures on the U.S. labor relations system—on the corporate side, workplace flexibility and employment involvement (stemming at least partly from globalization); on the labor side, low union density, a representation gap, and difficulties in organizing new workers.

What is a union?

Please click on the video and watch what is a union.

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Labor union: Group of workers who join together to influence the nature of their employment

For employers labor relations are about managing relationships with employees and labor unions

In ways that promote organizational goals or cost-effective service delivery

Introduction

Labor union is a group of workers who join together to influence the nature of their employment. They seek improved wages and benefits, or protection against arbitrary treatment and discharge, or a greater voice in workplace decision making.

From the worker’s perspective, labor relations are about collective work-related protection, influence, and voice.

For employers, labor relations are all about managing relationships with employees and labor unions in ways that promote organizational goals such as profitability (in the private sector) or cost-effective service delivery (in the public sector).

Ordinarily two or more people can form a bargaining unit.

How many people are needed to form a union?

Theoretically, you only need two people. Ordinarily two or more people can form a bargaining unit.

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Nonunion employers try to remain union-free through preventive labor relations strategies

Unionized employers try to undermine labor unions by using the same strategies

Collective bargaining

Adhering to the resulting union contracts

Resolving disputes through grievance

procedures

Introduction

Nonunion employers typically pursue these goals by trying to remain union-free through preventive labor relations strategies. These strategies can range from aggressive union-busting tactics that scare workers away from unions, to progressive human resource management tactics that seek to make unions unnecessary.

Unionized employers might also try to undermine labor unions by using these same strategies, but most deal with their unions constructively, primarily through:

Collective bargaining

Adhering to the resulting union contracts

Resolving disputes through grievance procedures

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Strikes and other forms of labor–management conflict

Serve democracy by allowing labor unions to promote the decent working and living conditions

Introduction

Society also has an important stake in labor relations. Strikes and other forms of labor–management conflict can deprive consumers of goods and services and can even jeopardize safety.

Labor relations can also serve democracy by allowing labor unions to promote the decent working and living conditions that free and equal citizens deserve, and to provide a voice for workers in the political arena.

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Employees, employers, labor unions, the public, and policymakers are affected by the major processes of labor relations.

The union organizing process (how unions are formed)

The collective bargaining process (how contracts are negotiated)

The dispute resolution process (how bargaining impasses are prevented or resolved)

The contract administration process (how grievances over the application of the contract are managed)

Introduction

Employees, employers, labor unions, the public, and policymakers are affected by the major processes of labor relations. Consequently, studying labor relations frequently emphasizes these processes:

The union organizing process (how unions are formed)

The collective bargaining process (how contracts are negotiated)

The dispute resolution process (how bargaining impasses are prevented or resolved)

The contract administration process (how grievances over the application of the contract are managed)

Union density/Union membership rate

In 2018

Overall -10.5 %

Public-sector – 33.9 %

Private-sector - 6.4%

The number of wage and salary workers belonging to unions, at 14.7 million in 2018

Union density/Union membership rate: The percentage of wage and salary workers who are union members

https://www.bls.gov/news.release/archives/union2_01182019.htm

Union density/Union membership rate: is The percentage of wage and salary workers who are union members.

The union membership rate--the percent of wage and salary workers who were members of unions--was 10.5 percent in 2018, down by 0.2 percentage point from 2017, the U.S. Bureau of Labor Statistics reported today. The number of wage and salary workers belonging to unions, at 14.7 million in 2018, was little changed from 2017.

The union membership rate of public-sector workers (33.9 percent) continued to be more than five times higher than that of private-sector workers (6.4 percent).

The highest unionization rates were among workers in protective service occupations (33.9 percent) and in education, training, and library occupations (33.8 percent).

Men continued to have a higher union membership rate (11.1 percent) than women (9.9 percent).

Black workers remained more likely to be union members than White, Asian, or Hispanic workers.

Union density/Union membership rate

https://www.bls.gov/news.release/archives/union2_01182019.htm

--The highest unionization rates were among workers in protective service occupations (33.9 percent) and in education, training, and library occupations (33.8 percent).

--Men continued to have a higher union membership rate (11.1 percent) than women (9.9 percent).

--Black workers remained more likely to be union members than White, Asian, or Hispanic workers.

The U.S. union membership rate—the percent of wage and salary workers who were members of unions—was unchanged at 10.7 percent in 2017. New York continued to have the highest union membership rate (23.8 percent), while South Carolina continued to have the lowest (2.6 percent).

In 2017, 27 states and the District of Columbia had union membership rates below the U.S. average, 10.7 percent, while 22 states had rates above it and 1 state had the same rate.

Nine states had union membership rates below 5.0 percent in 2017, with South Carolina having the lowest rate (2.6 percent). The next lowest rates were in North Carolina (3.4 percent) and Utah (3.9 percent). Two states had union membership rates over 20.0 percent in 2017: New York (23.8 percent) and Hawaii (21.3 percent).

In 2018, union members accounted for 14.7 percent of wage and salary workers in California

Union Members in California — 2018

In 2018, union members accounted for 14.7 percent of wage and salary workers in California, compared with 15.5 percent in 2017

Union members.

Data refer to members of a labor union or an employee association similar to a union.

Represented by unions.

Data refer to both union members and workers who report no union affiliation but whose jobs are covered by a union or an employee association contract.

Union membership vs Union coverage

Union members.

Data refer to members of a labor union or an employee association similar to a union.

Represented by unions.

Data refer to both union members and workers who report no union affiliation but whose jobs are covered by a union or an employee association contract.

California had 2,405,000 union members in 2018.

In addition to these members, another 182,000 wage and salary workers in California were represented by a union on their main job or covered by an employee association or contract while not union members themselves.

i.e. 2,405,000+ 182,000=2,587,000 workers are represented by unions

Union membership vs Union coverage

California had 2,405,000 union members in 2018.

i.e. 2,405,000 + 182,000 = 2,587,000 workers are represented by unions

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Efficiency: Productive use of scarce resources for economic prosperity

Equity: Standard of fair treatment for employees

Voice: The ability of employees to have meaningful input into workplace decisions

Objectives of Labor Relations

Now let’s discuss The Objectives of Labor Relations

The foundation of studying any work-related subject is the objectives of the employment relationship.

The three objectives of the employment relationship are:

1st. Efficiency—the productive, profit-maximizing use of labor to promote economic prosperity. It is a standard of economic or business performance. Workplace policies that promote flexibility and productivity are examples of how efficiency might be achieved.

2nd. Equity—fairness in the distribution of economic rewards, the administration of employment policies, and the provision of employee security. It is a standard of fair treatment for employees. Decent wage and benefit packages or policies that dismiss workers only for valid, performance-related reasons are examples of providing equity.

3rd. Voice—the ability of employees to have meaningful input into workplace decisions. It is a standard of employee participation. Employee autonomy and representation by labor unions are examples of ways to pursue the voice dimension.

1. Efficiency—the productive, profit-maximizing use of labor to promote economic prosperity.

It is a standard of economic or business performance.

Workplace policies that promote flexibility and productivity are examples of how efficiency might be achieved.

Objectives of Labor Relations

1st, Efficiency is the productive, profit-maximizing use of labor to promote economic prosperity.

It is a standard of economic or business performance.

Workplace policies that promote flexibility and productivity are examples of how efficiency might be achieved.

2. Equity—fairness in the distribution of economic rewards, the administration of employment policies, and the provision of employee security.

It is a standard of fair treatment for employees.

Decent wage and benefit packages or policies that dismiss workers only for valid, performance-related reasons are examples of providing equity.

Objectives of Labor Relations

2nd Equity—fairness in the distribution of economic rewards, the administration of employment policies, and the provision of employee security.

It is a standard of fair treatment for employees.

Decent wage and benefit packages or policies that dismiss workers only for valid, performance-related reasons are examples of providing equity.

3. Voice—the ability of employees to have meaningful input into workplace decisions.

It is a standard of employee participation.

Employee autonomy and representation by labor unions are examples of ways to pursue the voice dimension.

Objectives of Labor Relations

3rd Voice—the ability of employees to have meaningful input into workplace decisions.

It is a standard of employee participation.

Employee autonomy and representation by labor unions are examples of ways to pursue the voice dimension.

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Efficiency, equity, and voice clash

Equitable treatment might reduce flexibility and efficiency

Employee voice might make decision making more cumbersome and less efficient

Unions centralize power to better achieve equity, but become less responsive to individuals

Labor relations must strike a balance between these conflicting goals

Objectives of Labor Relations

Labor relations must strike a balance between these three sometimes conflicting goals.

Efficiency, equity, and voice clash

Equitable treatment might reduce flexibility and efficiency

Employee voice might make decision making more cumbersome and less efficient

Unions centralize power to better achieve equity, but become less responsive to individuals

Labor relations must strike a balance between these conflicting goals

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Figure 1.1 - Aspects of Efficiency, Equity, and Voice in the Employment Relationship

Figure 1.1 shows Aspects of Efficiency, Equity, and Voice in the Employment Relationship.

Voice includes consultation, labor unions, self-determination and employee free speech.

Efficiency includes profitability, productivity, competitiveness and economic prosperity

Equity includes living wages, workplace safety, nondiscrimination, health and retirement security

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The U.S. encourages collective bargaining

Everyone has the right to form and join trade unions for the protection of his/her interests

Bargaining objectives

Negotiate the terms and conditions of employment

Mutual aid

Protection

Objectives of Labor Relations

The U.S. encourages collective bargaining

Everyone has the right to form and join trade unions for the protection of his/her interests

Bargaining objectives include

Negotiate the terms and conditions of employment

Mutual aid

Protection

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With inflated wages and restrictive work rules, unions:

Secure better wages

Negotiate extensive work rules to protect members against unfair treatment by management

Provide voice and representation to individual workers

Objectives of Labor Relations

With inflated wages and restrictive work rules, unions seek to

Secure better wages for union members. Compared to non-union counterparts, union members are able to secure higher wages. The average union wage premium is about 15%.

Unions also Negotiate extensive work rules to protect members against unfair treatment by management

Last but not least, unions provide voice and representation to individual workers

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Efficiency is important to the employment relationship because of its effect on:

Competitiveness

Economic development

Economic prosperity

Objectives of Labor Relations

For business leaders, business schools, the business press, and business-friendly politicians, the sole objective of the employment relationship is efficiency because of its effect on:

Competitiveness

Economic development

Economic prosperity

Business is seen as best promoting economic prosperity through free-market competition.

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The sole objective of the labor relation is efficiency

General belief is “what’s good for a company is good for the world”

Businesses are not designed to be democratic training grounds

A company has no obligation to provide personal and moral development

Isn’t Efficiency Enough?

Concerns like equity and voice are seen as social issues that interfere with business. The sole objective of the labor relation is efficiency

The General belief is summarized as follows: “what’s good for a company is good for the world.”

Businesses are not designed to be democratic training grounds

Companies, it is argued, have no obligation to provide personal and moral development.

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Equity and voice are social and human boundaries on efficiency and are weak compared to employment-at-will

Lack of just cause discharge protections

Isn’t Efficiency Enough?

The U.S. employment relationship is governed by the employment-at-will doctrine. A classic statement of this doctrine is the ruling that “all may dismiss their employees at will, be they many or few, for good cause, for no cause, or even for cause morally wrong, without being thereby guilty of legal wrong.”

Employers have wide latitude to fire workers for many reasons—or no reason at all.

The United States is unique among industrialized countries in the strength of at-will employment and the corresponding lack of just cause discharge protections.

There are a few exceptions to the employment-at-will doctrine in the United States, but these are limited to several legislative restrictions (especially antidiscrimination laws), contractual restrictions (most widely associated with union contracts), and a patchwork of state-by-state judicial exceptions (such as firing someone for refusing to break the law).

Although the employment-at-will doctrine treats workers as if they are nothing more than economic commodities exchanged in the marketplace, the fact that workers are human beings forces us to pay attention to equity and voice in addition to efficiency.

The quality of employment and the nature of the workplace are important for individuals, families, and society.

Employment-at-Will Quiz

Please work on the employment-at-will quiz on the lecture notes.

For each of the following scenarios, indicate whether you believe a court of law would find the discharge to be lawful or unlawful, NOT what you would like the result to be.

In each case, the employee is not represented by a union and was not discharged because of his or her race, sex, national origin, religion, age, or disability.

Employment-at-Will Quiz

For each of the following scenarios, indicate whether you believe a court of law would find the discharge to be lawful or unlawful, NOT what you would like the result to be.

In each case, the employee is not represented by a union and was not discharged because of his or her race, sex, national origin, religion, age, or disability.

Take the Employment-at-Will Quiz

For each of the following scenarios, indicate whether you believe a court of law would find the discharge to be lawful or unlawful, NOT what you would like the result to be. In each case, the employee is not represented by a union and was not discharged because of his or her race, sex, national origin, religion, age, or disability.

1. Company discharges Employee in order to hire another person to do the same job at a lower wage. Employee's job performance has been satisfactory. The discharge is:

Lawful ____________ Unlawful _____________

2. Company discharges Employee because of unsatisfactory job performance.

The discharge is:

Lawful ____________ Unlawful _____________

3. Employee is discharged because Company mistakenly believes Employee has stolen money. Employee is able to prove in court that Company is mistaken. Employee's job performance has been satisfactory.

The discharge is:

Lawful ____________ Unlawful _____________

4. Company discharges Employee because there is no longer enough work. The discharge is:

Lawful ____________ Unlawful _____________

5. Employee is accused of dishonesty. Supervisor knows that Employee is not dishonest, but discharges him anyway, because he dislikes Employee personally. Employee's job performance has been satisfactory. The discharge is:

Lawful ____________ Unlawful _____________

6. An employee discovers that Company has been violating the law by charging customers for services which were not actually provided. Employee is discharged because he refuses to participate in Company's illegal billing practices. The discharge is: Lawful ____________ Unlawful _____________

Lawful OR Unlawful discharge

Employment-at-Will Quiz

What are your answers?

1 – 5  Lawful discharge

6  Unlawful discharge

Employment-at-Will Quiz

In fact, cases 1 to 5 are lawful discharges and case 6 is an unlawful discharge.

The U.S. employment relationship is governed by the employment-at-will doctrine.

A classic statement of this doctrine is the ruling that “all may dismiss their employees at will, be they many or few, for good cause, for no cause, or even for cause morally wrong, without being thereby guilty of legal wrong.”

Employment-at-Will

The U.S. employment relationship is governed by the employment-at-will doctrine.

Employers have wide latitude to fire workers for many reasons—or no reason at all.

The United States is unique among industrialized countries in the strength of at-will employment and the corresponding lack of just cause discharge protections.

Employment-at-Will

Employers have wide latitude to fire workers for many reasons—or no reason at all.

The United States is unique among industrialized countries in the strength of at-will employment and the corresponding lack of just cause discharge protections.

There are a few exceptions to the employment-at-will doctrine in the United States, but these are limited to several legislative restrictions

antidiscrimination laws,

contractual restrictions (most widely associated with union contracts), and

a patchwork of state-by-state judicial exceptions (such as firing someone for refusing to break the law).

Employment-at-Will

There are a few exceptions to the employment-at-will doctrine in the United States, but these are limited to several legislative restrictions

antidiscrimination laws,

contractual restrictions (most widely associated with union contracts), and

a patchwork of state-by-state judicial exceptions (such as firing someone for refusing to break the law).

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Work and the workplace

The most important site of cooperative interactivity and sociability with adults, outside of the family

Isn’t Efficiency Enough?

Workplace is

The most important site of cooperative interactivity and sociability with adults, outside of the family

Work is not simply an economic transaction; work is a fully human activity such that employees are entitled to fair treatment and opportunities to have input into decisions that affect their daily lives.

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Industrial democracy

Belief that workers in a democratic society are entitled to the same democratic principles of participation in the workplace

Labor unions seek not only material gains in wages and benefits but also dignity, voice, and freedom

Isn’t Efficiency Enough?

Employee voice is essential for industrial democracy, a term that captures the belief that workers in a democratic society are entitled to the same democratic principles of participation in the workplace.

Labor unions seek not only material gains in wages and benefits but also dignity, voice, and freedom

Work should be seen as more than an economic transaction. Equity and voice along with efficiency must be the central objectives of the employment relationship.

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Workers want more influence over decisions that affect their job or work life

They would enjoy their jobs more

Their businesses would be more competitive

Managers like to deal with workers one-on-one

Half of workers prefer dealing with management as a group

Isn’t Efficiency Enough?

Workers want more influence over decisions that affect their job or work life

They would enjoy their jobs more

Their businesses would be more competitive

Managers like to deal with workers one-on-one

In fact, a survey shows that Half of workers prefer dealing with management as a group

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Unions underscore voice in union literature and campaigns

Unions overseas emphasize voice

Social commentators, labor leaders, and workers want:

Fairly distributed outcomes

Participation in decision making

Profitable and effective production

of goods and services

Isn’t Efficiency Enough?

Unions underscore voice in union literature and campaigns

Unions overseas emphasize voice

Social commentators, labor leaders, and workers want:

Fairly distributed outcomes

Participation in decision making

Profitable and effective production

of goods and services

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Conflicting Goals Mean Balancing Rights

These clashes can be thought of as conflicts between

the business pursuit of efficiency and

workers’ pursuit of equity and voice.

Conflicting Goals Mean Balancing Rights

Now, let’s focus on the conflicting goals of labor relations

Conflicting Goals Mean Balancing Rights

The greatest challenges in labor relations arise from conflicting goals.

These clashes can be thought of as conflicts between the business pursuit of efficiency and workers’ pursuit of equity and voice.

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The greatest challenges in labor relations arise from conflicting goals

Conflicts are generally resolved privately through bargaining and other means by:

Individuals

Unions

Companies

The key right of workers is the ability to quit jobs they do not like

Conflicting Goals Mean Balancing Rights

Conflicts are generally resolved privately by individuals, unions, and companies through bargaining and other means.

At a fundamental level, conflicts between employers and employees are seen as conflicts between the property rights of employers and the workers’ rights of employees.

The key right of workers is the ability to quit jobs they do not like.

Most of the world’s labor relations systems hold a pluralist perspective that sees the employment relationship as analogous to a pluralist political society in which multiple parties (such as employers and employees) have legitimate but sometimes conflicting interests and rights.

The U.S. labor relations system is based on the belief that labor and management should freely interact and resolve their conflicts within a framework that appropriately respects the rights of each party involved.

Operationally, U.S. labor law tries to balance property rights and workers’ rights, thereby balancing efficiency, equity, and voice.

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Pluralist perspective

The employment relationship as analogous to a pluralist political society in which multiple parties (such as employers and employees) have legitimate but sometimes conflicting interests and rights.

U.S. labor law tries to balance property rights and workers’ rights, thereby balancing efficiency, equity, and voice.

Conflicting Goals Mean Balancing Rights

Operationally, U.S. labor law tries to balance property rights and workers’ rights, thereby balancing efficiency, equity, and voice.

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Why might society and workers support unionization?

Unions help strike a balance between efficiency, equity, and voice

Contemporary U.S. Labor Relations

Now let’s move on to Contemporary U.S. Labor Relations

The three objectives of efficiency, equity, and voice provide a rich framework for understanding labor relations.

Why might society and workers support unionization?

Unionization is supported by both the society and workers because it helps strike a balance between efficiency, equity, and voice.

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U.S. labor law assumes that corporations have greater power than individual workers

Resulting in discriminatory treatment and unfair labor practices

1. Substandard wages and benefits

2. Discriminatory treatment

3. Autocratic supervision

4. Long working hours

5. Dangerous working conditions

Contemporary U.S. Labor Relations

Each labor law regime assumes that corporations have significantly greater bargaining power than individual, nonunion workers, resulting in the following conditions:

1. Substandard wages and benefits

2. Discriminatory treatment

3. Autocratic supervision

4. Long working hours

5. Dangerous working conditions

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Superior employer bargaining power results in:

Low wages and worker unrest

Long hours at low pay under discriminatory conditions violate equity

Employer dictation of employment conditions and autocratic supervision

Contemporary U.S. Labor Relations

Some of the reasons why the desired objectives of labor relations are not fulfilled:

Superior employer bargaining power results in:

1. Low pay and worker unrest can cause inefficiencies through lack of consumer purchasing power and economic disruptions because of strikes and other disputes.

2. Long hours at low pay under dangerous and discriminatory conditions violate equity.

3. Employer dictation of employment conditions as well as autocratic supervision fail to provide employee voice and are counter to democratic standards.

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If a majority of workers want union representation:

The employer must bargain with the union over wages, hours, other terms/conditions

Workers cannot be fired or discriminated against for their union support

Employers cannot threaten employees or take action to prevent unionization

Contemporary U.S. Labor Relations

The specific institutional approaches to striking a balance between efficiency, equity, and voice vary widely between countries in terms of the legal regulation of labor unions and other forms of worker representation, the scope of bargaining, and the specific nature of union contracts.

U.S. labor relations processes are tightly regulated by the legal system.

Some of the features of the U.S. labor law include the following:

It specifies that if a majority of workers in a specific workplace want union representation, their employer has a legal obligation to bargain with the union over wages, hours, and other terms and conditions of employment.

Workers cannot be fired or otherwise discriminated against because of their support for a union.

Employers cannot threaten employees or undertake other actions for the sole purpose of preventing unionization.

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U.S. labor law protects union to strike a balance between efficiency, equity, and voice

Increasing the purchasing power of workers and reducing disruptive strike activity

Achieving fair standards and protections against exploitation

Providing democracy in the workplace

Contemporary U.S. Labor Relations

The rationale for these legal protections is to allow workers to unionize to equalize bargaining power between employees and employers and thereby strike a balance between efficiency, equity, and voice in the following way:

1. Increasing the purchasing power of workers and reducing disruptive strike activity ( which is the efficiency dimension)

2. Achieving fair labor standards and protection against worker exploitation (which is the equity dimension)

3. Providing democracy in the workplace (which is the voice dimension)

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Collective bargaining: Representatives of the employer and employees negotiate employment terms and conditions

Compensation

Personnel policies/procedures

Employee and employer rights and responsibilities

Union rights and responsibilities

Dispute resolution and ongoing decision making

Contemporary U.S. Labor Relations

For employment relations system works effectively, efficiency, equity, and voice are achieved through collective bargaining. In collective bargaining, representatives of the employer and the employees negotiate the terms and conditions of employment that will apply to the employees.

The major subjects of the bargaining include:

Compensation—including wages, benefits, vacations and holidays, shift premiums, profit sharing

Personnel policies and procedures—including layoff, promotion, and transfer policies, overtime and vacation rules

Employee rights and responsibilities—including seniority rights, job standards, workplace rules

Employer rights and responsibilities—including management rights, just cause discipline and discharge, subcontracting, safety standards

Union rights and responsibilities—including recognition as bargaining agent, bulletin board, union security, dues check-off, shop stewards, no strike clauses

Dispute resolution and ongoing decision making—including grievance procedures, committees, consultation, renegotiation procedures

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The crucial feature of collective bargaining

Management’s authority to unilaterally establish conditions of employment is replaced by bilateral negotiations

Workers have a collective voice

Union contract: The provisions of a bargain that are written down and bound into a legally enforceable collective bargaining agreement

Contemporary U.S. Labor Relations

The crucial feature of collective bargaining is that management’s traditional authority to unilaterally establish terms and conditions of employment is replaced by bilateral negotiations.

Workers have a collective voice through collective bargaining

When the collective bargaining process results in terms that are approved by both upper management and union members, the provisions are written down and bound into a legally enforceable collective bargaining agreement, also called a union contract.

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Pressures for competitiveness and quality add pressure to collective bargaining

Flexibility clashes with lengthy contracts with detailed work rules

Cooperation and employee involvement clashes with the adversarial bargaining process

Renegotiated contracts are not flexible and involving

Contemporary U.S. Labor Relations

Business pressures for competitiveness and quality have pressured the collective bargaining process in at least three major ways:

The business need for flexibility clashes ( which is an efficiency concern) with lengthy contracts that spell out detailed work rules (which is an equity concern). As a result, there has been experimentation with shorter, less detailed (less restrictive) contracts.

The business need for cooperation and employee involvement clashes with the traditionally adversarial bargaining process in which labor and management use aggressive tactics to extract as many gains or concessions from the other side as their power allows. As a result, some advocate the mutual gains of integrative or “win-win” bargaining, which embraces a culture of joint problem solving rather than competition and conflict.

The need for both flexibility and involvement is not well served by a process in which contracts are renegotiated every three years or so with little productive communication (voice) between these formal negotiating periods. More bargaining relationships, therefore, are establishing mechanisms to foster ongoing communication.

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There are several Characteristics of the business climate of the 21st century:

Flexible production methods

The rise of knowledge workers

The blurring of traditional distinctions between brawn and brains

Intense global competition

Contemporary U.S. Labor Relations

There are several Characteristics of the business climate of the 21st century:

Flexible production methods

The rise of knowledge workers

The blurring of traditional distinctions between brawn and brains

Intense global competition

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Management’s perspective

Adversarial negotiations do not promote trust and cooperation

Need to supplement high-level, periodic negotiations with ongoing low-level communication and problem-solving mechanism

Lengthy, detailed contracts inhibit flexibility and involvement

Labor laws are outdated

Contemporary U.S. Labor Relations

Management’s perspective, the Contemporary U.S. Labor Relations often involves the following characteristics:

Adversarial negotiations do not promote trust and cooperation

Need to supplement high-level, periodic negotiations with ongoing low-level communication and problem-solving mechanism

Lengthy, detailed contracts inhibit flexibility and involvement

Labor laws are outdated

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Labor’s perspective

Labor law is weak

Penalties are minimal

Delays are frequent

Employers can use captive audience speeches and permanent strike replacements

Secondary boycotts are prohibited

Private sector union density is less than 7 percent

Workers in the global economy need protection more than ever

Contemporary U.S. Labor Relations

From the Labor Unions’ perspective

The U.S. labor law is criticized by union supporters—not so much for being outdated but rather for being too is weak.

Penalties are minimal

Delays are frequent

Employers can use captive audience speeches and permanent strike replacements

Secondary boycotts are prohibited

Private sector union density is less than 7 percent

Workers in the global economy need protection more than ever

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The union membership rate—the percent of wage and salary workers who were members of unions—was 10.5 percent in 2018, down by 0.2 percentage point from 2017. The number of wage and salary workers belonging to unions, 14.7 million in 2018, was about the same as in 2017. In 1983, the first year for which comparable union data are available, the union membership rate was 20.1 percent and there were 17.7 million union workers.

Reasons for Union Decline

Please click on the video and think about this question: what are the reasons for union decline?

Reasons for Union Decline

Here is one more video on reasons for union decline. Please click on the video and watch it. What are the reasons for union decline?

Reasons for Union Decline

Let’s summarize the reasons for union decline.

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Private sector U.S. union density has been declining for the past 50 years

The increase in the following non-union jobs contributes to the union decline.

Decline in traditionally unionized industries such as manufacturing while employment has increased in nonunion industries such as services.

Reasons for Union Decline

Private sector U.S. union density has been declining for the past 50 years

There are several reasons for the union decline in the U.S.

The increase in the following non-union jobs contributes to the union decline.

One possible explanation for the 50-year decline of private sector U.S. union density is that employment has declined in traditionally unionized industries such as manufacturing while employment has increased in nonunion industries such as services.

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Regional and demographic shifts

Faster employment growth in southern states

Increased numbers of women in the workforce

Increased education and skill levels

Reasons for Union Decline

Related structural, or compositional, changes include regional and demographic shifts,

such as faster employment growth in southern states,

Increased numbers of women in the workforce

and increases in education and skill levels. Also contributes to union decline

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Demand for union services has declined

Unions not doing a good job of responding to the needs of a changing workforce

overcoming the negative stereotypes of unions that are so common in American culture.

Employers have improved their responsiveness to employees’ needs

Reasons for Union Decline

A second possibility is that demand for union services has declined.

This explanation has three components:

Demand can decline because unions are not doing a good job of responding to the desires of a changing workforce

and overcoming the negative stereotypes of unions that are so common in American culture.

If employers have improved their responsiveness to employees’ needs, this can reduce demand for union protection and advocacy.

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Increased protective legislation has provided a substitute for unions

Civil Rights Act and Equal Pay Act

forbidding discriminatory employment practices

Occupational Safety and Health Act

workplace safety standards

Family Medical Leave Act

unpaid leave for parental, family, and medical reasons.

Reasons for Union Decline

Increased protective legislation may have provided a substitute for unions.

Examples include the Civil Rights Act and Equal Pay Act (and related laws pertaining to age and disability discrimination) forbidding discriminatory employment practices;

the Occupational Safety and Health Act governing workplace safety standards;

and the Family and Medical Leave Act, which requires employers to provide unpaid leave for parental, family, and medical reasons.

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Employer resistance or opposition

American managers are exceptionally hostile toward unions

Strong tradition of using union avoidance tactics

Failure to invest in union operations

Actively fighting union organizing drives

Reasons for Union Decline

The third, and most controversial, possible reason for the decline in U.S. union density is employer resistance or opposition.

American managers are exceptionally hostile toward unions

Strong tradition of using union avoidance tactics

Failure to invest in union operations

Actively fighting union organizing drives

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Union corruption

Rigid work rule

HRM as substitutes for unions

Loss of political influence. Inadequate union lobbying efforts

Individualist culture

Dominance of business unionism. U.S. labor movement was not perceived as a social movement.

Reasons for Union Decline

Other reasons for union decline in the United States includes

Union corruption

Rigid work rule

HRM as substitutes for unions

Loss of political influence. Inadequate union lobbying efforts

Individualist culture

Dominance of business unionism. U.S. labor movement was not perceived as a social movement.

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Representation gap

When workers were asked about their desire for union representation, approximately one-third of nonunion workers said they would like a union in their workplace (desired union density rate of 40%).

The difference between the desired union density rate (40%) and actual union density rate (10%), results in a 30% representation gap.

Contemporary U.S. Labor Relations

One factor that seems to support the significance of employer opposition is the existence of a representation gap:

When workers were asked about their desire for union representation, approximately one-third of nonunion workers said they would like a union in their workplace (desired union density rate of 40%).

The difference between the desired union density rate (which is roughly 40%) and actual union density rate (which is roughly 10%), results in a 30% representation gap.

What is the "representation gap" in the United States?

A quick recap. What is the "representation gap" in the United States?

What is the "representation gap" in the United States?

30 %

That’s right. 30%.

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Unions are relevant

blue-collar occupations;

doctors, nurses, lawyers, teachers, writers, professional athletes, college professors etc.

Continued Relevance of Labor Relations

Now Let’s focus on The Continued Relevance of Labor Relations

Contrary to popular stereotypes, unions are relevant

not only to blue-collar occupations;

doctors, nurses, lawyers, teachers, writers, professional athletes, college professors, and even graduate students are represented by unions.

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Labor relations continues to be a relevant and dynamic area of study and practice

All managers should understand labor relations

U.S. labor laws affect both union and non-union workplaces

Reveals consequences of poorly managed workforces

Continued Relevance of Labor Relations

Labor relations are a relevant and dynamic area of study and practice.

All managers should understand labor relations

U.S. labor laws affect both union and non-union workplaces

Reveals consequences of poorly managed workforces

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The study of Labor Relations

Explains historical, social, and political influences on business

Helps everyone understand and resolve conflict

Reveals how work and business are embedded in a complex environment

Continued Relevance of Labor Relations

The study of Labor Relations Explains historical, social, and political influences on business;

Helps everyone understand and resolve conflict;

and Reveals how work and business are embedded in a complex environment

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Labor relations involves diverse factors

Market forces

Individual emotions

Managerial strategies

Forms of work organization

Constitutional and legal issues

Continued Relevance of Labor Relations

History

Questions of human rights

Negotiation and conflict resolution strategies

Debates over globalization

Ethical challenges

Labor relations involves diverse factors

Market forces

Individual emotions

Managerial strategies

Forms of work organization

Constitutional and legal issues

History

Questions of human rights

Negotiation and conflict resolution strategies

Debates over globalization

Ethical challenges

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Underlying labor relations issues

Goals of the employment relationship

How employment relationship and labor markets operate

Major environmental pressures

Union strategies

Public policy

Continued Relevance of Labor Relations

The Underlying labor relations issues are not limited to

Goals of the employment relationship

How employment relationship and labor markets operate

Major environmental pressures

Union strategies

Public policy

An understanding of labor relations is important for all current and future managers.

The study of labor relations considers the goals of workers and society and does not shy away from the conflicts that can arise between competing groups, especially in a real world characterized by imperfect competition.

Labor relations can help everyone understand and resolve conflict—in the workplace, in business relationships, and in everyday personal interactions.

We have come to the end of our lecture today. If you have any questions, please feel free to email me.

See you next class!

Fault Lines - The decline of labour unions in the US

Here is one more optional video about union decline. If you have time, please click on the video and watch labor unions’ recent struggle.