Mgmt 583

1. Mgmt 583 Chapter 1: Introduction Fall 2008

2. Labor Relations • Labor Relations – a set of processes by which unions and management achieve their goals while accommodating each other’s needs. • a.k.a. Industrial Relations • a.k.a. Labor-Management relations • The Labor Relations’ environment is heavy regulated.

3. The Parties • Employers/Management • Line management • HR management • Unions • Government

4. What Unions Do • 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. • 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]

5. Trend in Union Membership • 1935 13.2% • 1945 35.5% • 1955 33.2% • 1965 28.4% • 1975 25.5% • 1985 18.0% • 1995 14.5% • 2007 12.1%

6. Union Membership • The unionization rate of private sector employees was 7.5 % in 2007. • Transportation 22.1%. • Utilities 22.1%. • Manufacturing industries 13.0%. • The unionization rate of government workers was 35.9% in 2007. • 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).

7. States with the Greatest Union Membership • Four states with the highest union membership rates in 2007: • New York (25.2%). • Alaska (23.8%). • Hawaii (23.4%). • Washington (20.2%).

8. States with the Lowest Union Membership • The four states with the lowest union membership rates in 2007: • North Carolina 3.0% • Virginia 3.7% • South Carolina 4.1% • Georgia 4.4% • Mississippi 6.7%

9. BLS Union Members Summary • 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.

10. Demographics of Union Membership • 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%).

11. Demographics of Union Membership • 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

12. 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

13. Willingness to Vote for a Union • Attitude of local community toward unions. • Favorable v. unfavorable. • Mississippi v. Michigan. • Peer pressure • Belief that union will be successful • Grievance handling • Bargaining demands

14. Collective Behavior • Collective Behavior – usually results from coming together to counter a mutual threat. Dependent on: • Group Cohesiveness • Class consciousness • External threat

15. Factors Affecting Cohesiveness • 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.

16. Factors Affecting Cohesiveness • The more isolated the group, the more cohesive. • 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.

17. Why Employees Organize • Dissatisfactiona necessary but not sufficient cause for successful organizing campaign. • Working conditions • Wages and benefits • Supervisory practices • Promotion/advancement policies • Job security

18. Formula for Employees Organizing Successfully • Dissatisfactionis 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.

19. Craft Unions • 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.

20. Industrial Unions • 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.

21. Trends in the Labor Movement • Greater female participation in the workforce. • Greater ethnic minority participation in the workforce. • Fewer skills (LIUNA and Hispanic janitors in L.A .). • Lack of mathematical and scientific skills. • Lower educational achievement. • Multilingual workplaces. • Immigration concerns. • Interestingly, unions used to be radically opposed to immigration, now they are supportive.

22. Trends in the Labor Movement • More organizing efforts among professional and white-collar employees. • Unions have problem with blue-collar image. • Job security offers an incentive for workers to organize. • Emerging two-tiered economic system based on education. • 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.

23. Why Unions Have Declined • Wages are more often determined by the market-driven economy than collective bargaining. • 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 • This ignores the effects of gov’t and the NEA on public education.

24. Why Unions Have Declined • Governments now provide many worker protections once offered only in CBAs. • OSHA • FLSA • Title VII • ERISA • The large American middle class is largely anti-union • 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.

25. Why Unions Have Declined • Private sector employers have taken proactive steps to avoid organization. • Competitive wages & benefits • Participative leadership styles. • More companies are using employee empowerment programs. • TQM • CQI