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.
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a.k.a. Industrial Relations
a.k.a. Labor-Management relations
The Labor Relations’ environment is heavy
regulated.
The Parties

Employers/Management
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Line management
HR management
Unions
Government
What Unions Do

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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.
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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
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1935
1945
1955
1965
1975
1985
1995
2007
13.2%
35.5%
33.2%
28.4%
25.5%
18.0%
14.5%
12.1%
Union Membership

The unionization rate of private sector employees
was 7.5 % in 2007.
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Transportation 22.1%.
Utilities 22.1%.
Manufacturing industries 13.0%.
The unionization rate of government workers was
35.9% in 2007.
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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 2007. Union Members
Summary. http://www.bls.gov/news.release/union2.nr0.htm (accessed August 20, 2008).
States with the Greatest Union
Membership

Four states with the highest union
membership rates in 2007:
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New York (25.2%).
Alaska (23.8%).
Hawaii (23.4%).
Washington (20.2%).
States with the Lowest Union
Membership
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The four states with the lowest union
membership rates in 2007:
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North Carolina 3.0%
Virginia 3.7%
South Carolina 4.1%
Georgia 4.4%
Mississippi 6.7%
BLS Union Members Summary

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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

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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

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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 http://www.laborresearch.org
Willingness to Vote for a Union
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Attitude of local community toward unions.
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Favorable v. unfavorable.
Mississippi v. Michigan.
Peer pressure
Belief that union will be successful
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Grievance handling
Bargaining demands
Collective Behavior

Collective Behavior – usually results from
coming together to counter a mutual threat.
Dependent on:
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Group Cohesiveness
Class consciousness
External threat
Factors Affecting Cohesiveness
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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.
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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
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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
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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
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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
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Greater female participation in the workforce.
Greater ethnic minority participation in the
workforce.
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Fewer skills (LIUNA and Hispanic janitors in L.A .).
Lack of mathematical and scientific skills.
Lower educational achievement.
Multilingual workplaces.
Immigration concerns.
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Interestingly, unions used to be radically opposed to immigration,
now they are supportive.
Trends in the Labor Movement
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More organizing efforts among professional and
white-collar employees.
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Unions have problem with blue-collar image.
Job security offers an incentive for workers to
organize.
Emerging two-tiered economic system based on
education.
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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
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Wages are more often determined by the marketdriven economy than collective bargaining.
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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
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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.
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OSHA
FLSA
Title VII
ERISA
The large American middle class is largely antiunion
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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.
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Competitive wages & benefits
Participative leadership styles.
More companies are using employee
empowerment programs.
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TQM
CQI