Schools of Thought

Schools of Thought

There are generally four schools of thought about employment relationship and they are mainstream economics, human resource management, industrial relations, and critical industrial relations. They each have their own rational and interesting view points, however, the schools that will be of major focus here are the mainstream economics and the industrial relations school.

According to our text in class, the mainstream economics school of thought focuses mainly on the economic activities of companies and workers that interact in competitive markets, and believe that equity, efficiency, and voice are attained through free-market competition. In this school of thought, labor problems are seen as a misuse or as an abuse if there is not enough labor market competition. Thus, labor unions are seen as labor market monopolies when they interfere with free-market competition by using their monopoly power to raise employees’ wages above the competitive level when they threaten to strike.

A practical example of how the mainstream economic school is applied in the real world today can be found in an article by the New York Times, titled Some Retail Workers Find Better Deals with Unions. Retailers in the New York area have been trying to get extra hours and a sense of job security for years to no avail. This article talks about two sets of people who work in retail, however one is in a union while the other is not. A lady by the name of Debra Ryan has been working for more than 20 years as a sales associate in the bedding and home furnishing department at Macy’s and is currently happy about not having to go to work guessing what her schedule will be like for the next upcoming weeks. She is a full time associate with assured work hours.

However, there are not too many people in the retail industry who can boast of guaranteed full time hours; in fact, this speaks true of the second lady in the article, Sonica Smith, who is also a sales associate and a mother of two. She is unfortunately currently working part-time at Zara with uncertain work schedules and can barely afford her house rent talk more of her children’s daycare charges. With her unpredictable work schedules, there are times at which she does not even work up to 20 hours a week. Dressing and meeting customer needs is what she loves to do only that she wishes to work more stable hours that would be sufficient to support her needs.

This article relates to the mainstream school of thought, which claims that unions (monopolies) benefit only a few at the expense of others because in this case, those who are not represented by the union suffers by getting unsteady work hours while those who are represented by unions get the benefit of a 40-hour week as well as an increased hourly wage. Also, if Sonica wanted to join the union, she could not because how can a person working part-time earning $11 per hour with to kids be able to afford union dues every month? This does not help her case and there are definitely some lazy workers at Macy’s who do not deserve to be protected by the union. Therefore, unions, according to this school, hinder employers from getting rid of less efficient workers. It would have been easy for Ms. Smith to get a job at Macy’s considering the fact that she is passionate about clothes and dressing people but because of union laws, Macy’s cannot just employer her by firing an unproductive worker – If that had happened, a lawsuit will be filed immediately; this is the reason why mainstream economics considers unions bad for employment.

On the other hand, the industrial relations school, formerly institutional labor economics, is one that believes labor problems are as a result of unequal bargaining power in democratic and capitalist societies. Employers usually have high bargaining power, which is why they can pay low wages to employees and make individual profit off them. Mainstream economics and the industrial relations school differ because in industrial relations, unions are important and necessary in controlling imbalances, protecting employees in the workforce, and promoting equity between workers and management, thereby giving employees a say, while mainstream economics believe that unions are bad because they hinder free market competition. In industrial relations school of thought, as our text states, the labor market is characterized by bargaining and not by competition and the society is worse off if either management or labor has too much power. Usually, management does not want to give up their authority or share equal power with their employees so, a union has to be formed in order to effectively enforce this.

In the world of sports, the industrial relations theory is the most dominant as we have heard of players such as Kain Colter wanting to form a union and Ed O’Bannor not wanting to watch others make profits