Do we still need unions?

Wisconsin and Ohio have stripped public workers of their collective bargaining rights. Other states threaten to do the same. Many Americans have the same response: Who cares? We don’t need unions anymore.

Have unions outgrown their usefulness in the modern workplace? Definitely not. In fact, in today’s unbalanced economic climate, they’re more important than ever. Let’s examine some of the benefits traditionally associated with unions to see why they’re still vital.

1. Wages. Fair pay was one of the first union battlefields.

My paternal grandfather was a coal miner. He didn’t know when he walked into the mine each day whether he’d walk back out. One day he was “covered up” — crushed under a cave-in at his section of the mine.

For all his hours of intensive labor, my grandfather received 25 cents per ton of coal. He didn’t get paid for the time spent laying track for the coal carts, clearing debris, or putting up safety structures.

He and the other miners fought for a union. After a tense battle, the miners won and got a raise. The first thing the new union bosses did was to inspect the scales. They discovered the scales were weighted — the company was wringing every last penny from the already underpaid miners.

Greed is a strong force: every dollar that doesn’t end up in the worker’s pocket ends up in the owner’s, so there’s a clear motivation to pay workers as little as possible. Unions help to balance the playing field.

However, many people think unions aren’t needed because the government has stepped in. The Fair Labor Standards Act established a federal minimum wage – currently $7.25/hour — and dictates that workers receive even higher overtime pay.

But the law established only a minimum wage, not a fair wage for the work being done. Because of the ample supply of workers, companies don’t have to think of employees as human beings but as line items on a budget sheet. Union advocate Michael D. Yates explains:

If we are honest we must admit that our employers have real power over us. Some of them may be nice and some of them may be nasty, but none of them will spend money just because it will be good for one of us. They know that as individuals we are less powerful than they are. We have only our ability to work to sell, but they have the jobs. In our economic system, these jobs belong to them and not to us, and they can do with them whatever they want. It is a simple but powerful truth that working people and their employers do not face each other as equals. Their employers have the jobs they need, and workers are replaceable.

Union workers receive higher wages than their nonunion counterparts. According to the Bureau of Labor Statistics, median weekly wages for private sector union workers were $838 in 2008 versus $680 for nonunion workers. The numbers for the public sector were $900 versus $753.

A common argument is that unions force companies to pay excessive wages and benefits to workers, above what the company can afford. Although it’s true that some companies agree to generous wage packages only to find themselves in a sudden economic downturn, in those cases unions usually make concessions to keep their companies afloat.

And most companies can certainly afford to provide a fair wage. Walmart, one of America’s largest employers, has revenue of $101.95 billion and net income of $3.44 billion. A wage study between 1992 and 2000 showed the negative impact of Walmart’s nonunion wages: For each new Walmart store that opens, wages in the general merchandising sector drop 1 percent. Grocery store wages drop 1.5 percent. In states with an average of 50 Wal-Mart stores, the average retail wages are 10 percent lower than in other states.

A follow-up study at U.C. Berkeley refuted Walmart’s claim that if it raised wages, prices would increase, hurting low-income families. The study took a hypothetical scenario where Walmart had to pay a minimum of $10 per hour to its workers. Some workers would earn approximately $1,000 to $4,600 more each year, with nearly half of the higher wages going to families whose incomes are below 200 percent of the poverty level.

Researchers examined the effect on prices if the company passed on 100 percent of the added wage expense to consumers – an event that researchers claimed was unlikely in the “real world” because Walmart would absorb the increase by reducing other salaries or by accepting lower profits. Researchers noted two financial gains from the higher salaries: increased productivity from more satisfied workers and the opportunity to expand into urban areas, where Walmart stores are often blocked because of wage issues.

But in the worst-case scenario where Walmart didn’t accommodate for any of those issues and passed every cent onto consumers, an average shopper would pay only $9.70 per year more at Walmart. Since low-income people were the focus of Walmart’s claim, researchers studied that group in more detail and discovered that they would end up paying only about $1.47 more per shopping trip, about $90 a year.

Despite the furor about “overpaid” union workers, American laborers aren’t the highest paid. When comparing total compensation packages in manufacturing – a common area for unionization – we don’t even crack the Top 10:

Source: Handbook of U.S. Labor Statistics, Table 10-10, p. 422. Figures adjusted to U.S. dollars

It’s true that workers in countries like Taiwan, Mexico, and the Philippines (where wages are, respectively, $8.15, $3.91, and $1.37 per hour) would love to receive American wages, union or otherwise, but I like to think America can set a higher standard for its workers.

The lower ranking on the international scale doesn’t mean our workers don’t work hard: they rank well in productivity, measured in output per hour by the Bureau of Labor Statistics:

Source: Handbook of U.S. Labor Statistics, Table 10-9, p. 417. 2007 figures.

2. Working conditions. This issue is the other hallmark of early unionization. Laborers had to work six long days or be replaced. In 1881 in Eau Claire, Wisconsin, lumber workers went on strike with the rally cry, “Ten hours or no sawdust.” Along with protesting the required 12-hour day, the strikers wanted to be paid with money, not due bills for the company store (any balance was paid in cash, but not until the end of the season, and of course the company controlled prices at the store.)

Even though the strike was peaceful, the governor sent in state troops, and sheriffs arrested the union leaders. With workers in disarray, the strike ended. After a decade of strikes, the lumber workers finally achieved the 10-hour workday but still struggled with wage issues.

Reducing hazards in the workplace was another victory for early unions. Once again, however, the government has stepped in:

  • The younger miners who replaced my grandfather are protected by the Mine Safety and Health Act of 1977 and the Black Lung Benefits Act.
  • For all workers, we now have the Occupational Safety and Health Administration (OSHA) that enacts guidelines for safe workplaces and inspects work sites for violations.
  • The Fair Labor Standards Act also specifies strict guidelines for employment conditions for those under 18 — they can’t work too many hours or in dangerous working conditions.

But in 2007, OSHA had only 6.5 compliance officers for each million American workers. Unions fill the gap, adding an extra measure of safety. Unions frequently distribute information about OSHA regulations to workers who otherwise might not know the rules their employers are supposed to follow. Here are two examples of how unions disseminate safety information and lobby for improved safety regulations:

http://www.cwa-union.org/pages/health_and_safety_links

http://www.aflcio.org/issues/safety/

Unions also have contract language regarding procedures employees can follow to report unsafe working conditions without being fired or harassed by management.

These measures pay off. The Pittsburgh Post-Gazette investigated the issue of safety in union vs nonunion coal mines and discovered that of 265 mine fatalities between 2002 and 2010, only 30 occurred in union mines. That means nonunion mines represented 89 percent of the fatalities.

Despite government regulations, workers are still concerned about safety. A 2007 poll found that improved workplace safety was the main reason workers joined unions, and over 40 percent said that unions created substantially better working conditions.

3. Benefits. Once unions tackled the more crucial issues of wages and safety, they went after “fringe” benefits like health-care insurance, pensions, and paid vacations. Of course, now even nonunion jobs have such benefits, but unions work hard to promote their members’ financial security in these areas.

According to a CDC survey, 23 percent of uninsured adults surveyed were employed. Having workers with health benefits provides significant rewards for our economy and the individual:

  • Unpaid medical bills are the top cause for personal bankruptcies in the U.S.
  • A person without health insurance is 25 percent more likely to die than an insured person.
  • An uninsured person is more likely to use the emergency room for medical care, and those unpaid bills are passed on to the rest of us in the form of higher rates.

So unions still make a difference in the areas of wages, working conditions, and benefits. Of course, unions aren’t perfect. Some unions fight for unrealistic clauses and benefits, sometimes dragging down efficiency in the workplace.

But a few bad incidents shouldn’t make us forget the overall value of unions. Think of unions as the safety pads that NFL players are required to wear. From time to time, the safety equipment limits the mobility of the players. But the game is fairer and safer with the extra protection.

REFERENCES

Some sources about issues of coal miner pay and safety:

http://www.post-gazette.com/pg/10108/1051388-455.stm

Boal, William M. “The Effect of Unionism on Accidents in U.S. Coal Mining, 1897–1929.” Industrial Relations 48.1 (2009): 97-120. Business Source Premier. EBSCO. Web. 4 Apr. 2011.

Elegant, Simon. “Where The Coal Is Stained With Blood.” Time 169.11 (2007): 32-34. Academic Search Premier. EBSCO. Web. 26 Mar. 2011.

Sources for government regulations:

http://www.dol.gov/compliance/laws/comp-flsa.htm

http://www.dol.gov/compliance/guide/index.htm

Sources for the Walmart studies:

Clifford, Stephanie. “Growth Overseas Lifts Wal-Mart Profit.” New York Times 17 Nov. 2010: 2. Academic Search Premier. EBSCO. Web. 26 Mar. 2011.

Jacobs, Ken. “Living Wage Policies and Wal-Mart.” Social Policy 38.2 (2008): 6-10. Academic Search Premier. EBSCO. Web. 26 Mar. 2011.

O’Keefe, Brian, and Doris Burke. “Meet the CEO of the Biggest Company on Earth.” Fortune 162.5 (2010): 80. MasterFILE Premier. EBSCO. Web. 26 Mar. 2011.

Health-care issues:

http://www.cdc.gov/nchs/nhis/releases.htm

http://www.cdc.gov/nchs/data/nhis/earlyrelease/insur201103.htm

http://iom.edu/~/media/Files/Report%20Files/2009/Americas-Uninsured-Crisis-Consequences-for-Health-and-Health-Care/Americas%20Uninsured%20Crisis%202009%20Report%20Brief.pdf

http://www.nytimes.com/2008/12/09/business/09emergency.html?_r=1

http://www.pnhp.org/new_bankruptcy_study/Bankruptcy-2009.pdf

Galambos, Colleen. “The Uninsured: A Forgotten Population.” Health & Social Work 30.1 (2005): 3-6. Academic Search Premier. EBSCO. Web. 9 Apr. 2011.

Gladwell, Malcolm. “The Moral-Hazard Myth.” New Yorker 81.25 (2005): 44. MasterFILE Premier. EBSCO. Web. 9 Apr. 2011.

Sources regarding safety issues:

“Workplace safety top reason workers join unions.” Industrial Safety & Hygiene News 41.6 (2007): 14. Business Source Premier. EBSCO. Web. 4 Apr. 2011.

http://www.aflcio.org/issues/safety/memorial/upload/_29C.pdf

http://osha.gov/OSHA_FAQs.html

Here are two examples of how unions disseminate safety information, from the Communications Workers of America and the AFL-CIO:

http://www.cwa-union.org/pages/health_and_safety_links

http://www.aflcio.org/issues/safety/

Other union references:

Ozanne, Robert W. “Lumber Industry Strikes: Eau Claire, Marinette, Ashland, LaCrosse.” Workers and Unions in Wisconsin: A Labor History Anthology. Ed. Darryl Holter. Madison: State Historical Society of Wisconsin, 1999. 22-25. Print.

Yates, Michael D. Why Unions Matter. New York: Monthly Review Press, 1998. Print.

Additional reading

Here’s a well-researched paper that goes into far more detail than my simple blog. “How unions help all workers”:

http://www.epi.org/publications/entry/briefingpapers_bp143/

And a post about unions as a safety net

http://www.michiganfuture.org/04/2011/the-saftey-net-and-unions/

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One thought on “Do we still need unions?

  1. Pingback: Unions – A Look at their Effects on Labor Statistics | Labor Statistics

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