Collective Bargaining Is Essential Component in Any Industrial Democracy

I. ESSAY ONE - Collective Bargaining is essential component in any industrial democracy.

“Labor market” can be defined as the mechanism in which workers compete for jobs and employers compete for workers. In a labor market, wages, benefits and responsibilities of workers are bought and sold. Unlike traditional markets however, labor is not a good that can be differentiated by conventional rules of supply and demand. While workers are the suppliers and employers are the buyers, overall supply cannot be manufactured as people only have a limited amount of time in a day. Additionally, companies are strong and can often directly manipulate the market by setting strict labor rules, triggering potential reductions in any supply side scarcity. A single employee is defenseless within this complicated environment. To balance the employment relationship, the National Labor Relations Act allows workers to unite. Through the formation of a union, workers can create resources and seek out benefits with much more success and efficiency than if they sought these advantages individually. From a management standpoint, desires for/against union formation remains a controversial issue. These principles are discussed in the materials that follow.

Employees must recognize the importance of uniting and its effects on managerial oversight. Early labor movements of the 1880’s began when working conditions were unbearable or even inhumane towards the working class. Workers felt that management paid miniscule wages, worked them too hard and subjected them to unsafe conditions. During that time, employers were extremely wealthy and extremely powerful, and could get away with almost anything. It is these analogies that the modern working class, must never forget. Over the past 80 years, a united working class has attempted to balance out large scale inequalities through collective bargaining and grievance arbitration procedures.

Oversight should not be the only attractive component as additional economic factors exist that may be attractive to employees within today’s labor movement. In the absence of a union, management has a monopoly over labor. Economically, this allows companies to either universally or in a single industry, drive down the market demand for labor. As a result, supply shifts downward, thus shrinking workforce wages. To offset this shift, employees are allowed to unionize, which shifts supply up. If equilibrium is not reached, both sides head to the bargaining table, schedule an arbitration hearing or ultimately strike.

Without a united workforce and detailed agreements, issues that are important to all employees such as wages and seniority can easily be ignored by management. Seniority protects veteran workers’ rights for promotion, while removing the threats of younger workers by simply replacing older ones, if/when management deems profitable. Through a united workforce, these instances are contractually safeguarded through negotiation procedures. Merely having the possibly of arbitration present, often pushes both sides closer to agreement of face the uncertainty of a third party. In a professional sports arbitration, the two sides present their respective demands. If settlement is not reached, then the case may head to arbitration. Under arbitration, both sides present their case. Rather than issuing a decision on a fair number, the arbitrator chooses one of the two side’s numbers. Obviously settlement is sought after more based on the possibly of an extreme decision ruling against your party.

Through collective bargaining, data shows that unions have raised wages of its workers historically 15 to potentially 20 percent, while improving safety, hours and other conditions in the workplace. Additionally, the greatest asset citizens and workers can possess is a voice. This goal is achieved through union voting privileges. Voting in union elections, provides each worker with a vehicle to express their opinions. On a larger scale, in some corporations, unions hold board positions and vote for management, compensation and policies. Once a union is initially formed, the Labor Relations Act ensures that management must recognize these institutions and the central bargaining authority on the workers behalf.

The principles/field of economics provide workers with a valuable tool when evaluating advantages of union membership. Through education and advancement, a united workforce can limit the market supply of skilled labor. Through increased education and training, unions can differentiate itself from its non-union competitors. As a result, members are paid higher salaries, thus pushing wages outward from W1 to W2 on a supply model. Collective bargaining can also shift wages outward, while guaranteeing future workers will not work for less than W2 based on seniority, years of service