Pros and Cons of Labor Unions
It goes without saying labor unions are controversial, at least in the United States. Pro-union workers believe unions are one of the basic building blocks of a strong working class. Opponents say unions are too restrictive and hurt working class employees.
Unions - Current Statistics
That latest data concerning union membership is from 2017 and was released by the U.S. Department of Labor’s Bureau of Labor Statistics in January of 2018. According to the BLS, the number of wage and salary workers belonging to unions was 14.8 million. That’s up by 262,000 from 2016. In 1983, the first year for which comparable union data are available, the union membership rate was 20.1 percent and there were 17.7 million union workers.
- The union membership rate of public-sector workers (34.4 percent) continued to be more than five times higher than that of private-sector workers (6.5 percent).
- Workers in protective service occupations and in education, training, and library occupations had the highest unionization rates (34.7 percent and 33.5 percent, respectively).
- Men continued to have a higher union membership rate (11.4 percent) than women (10.0 percent).
- Black workers remained more likely to be union members than White, Asian, or Hispanic workers.
- Nonunion workers had median weekly earnings that were 80 percent of earnings for workers who were union members ($829 versus $1,041). (The comparisons of earnings in this release are on a broad level and do not control for many factors that can be important in explaining earnings differences.)
- Among states, New York continued to have the highest union membership rate (23.8 percent), while South Carolina continued to have the lowest (2.6 percent).
With those statistics in mind, it is worth asking the question: what are the pros and cons of labor unions from an HR perspective?
Pro 1: Unions provide worker protections.
In most U.S. states, non-union workers are at-will employees. In short, employers can fire employees for virtually any reason. Of course, there are limitations in place such as discrimination. For union members, it’s different. There must be just cause. And it’s not a simple firing. In most instances, this type of decision must go through arbitration or a grievance procedure.
Speaking of those procedures, unions make it easier for workers to handle disputes and complaints with management and other workers. Members, regardless of status, are able to use the processes to raise grievances. In some unions, members will see the organization subsidize legal fees on disputes related to discrimination and wrongful terminations.
Pro 2: Unions promote higher wages and better benefits.
Through collective bargaining, unions are able to secure higher wages and better benefits. That said, unionized workers are not the only ones to benefit from this. Employers have also raised wages for non-unionized workers in order to compete for talent.
Pro 3: Unions are economic trend setters.
Before unions, weekends and provisions for workers did not really exist. Even though the U.S. workforce has not been 100% unionized, unions do impact trends that benefit all workers. Other examples include the minimum wage, OSHA guidelines, and overtime rules.
Pro 4: Political organizing is easier.
Unions are able to amplify and advance political causes the working class supports. This doesn’t necessarily mean unionized workers always support the political agenda of their union, but generally speaking, unions help keep candidates focused on issues that matter to the American worker, unionized or non-unionized.
Con 1: Unions require dues and fees that some workers don’t want to pay.
Workplaces with unions fall into two categories: open and closed. What’s the difference between the two? Open shops don’t require employees to pay dues or fees to the union. In a closed environment, employees have to be union members in order to apply for a job. Some will allow candidates to apply for the job as a non-unionized candidate, but if the candidate is hired, the non-member must become a member. Some allow employees to work as non-members, but those workers are required to pay agency fees, which contribute to the work the union is doing.
Opponents say closed environments are unfair to those individuals who have valid reasons for not supporting the work of the union.
Another reason for this particular con is that union dues are deducted from a worker’s paycheck. In most circumstances, that can translate to a deduction of 1.5%-2.5% in their pay. These fees can reduce or wipe out any pay gain the employee would have had in moving from a previous job to another.
Con 2: Labor unions discourage individuality
Workers are bound by the decisions of the union even if they disagree with the decision. In some instances, they only way a unionized employee can get out of the situation is to resign, which isn’t always an option.
Also, working in groups encourages “group think” situations, which in turn discourages individual creativity.
Con 3: Unions make it harder to promote and terminate workers.
Unions focus a lot on the seniority of the worker. This often translates into the lack of advancement for new and high performing employees to advance. Similarly, it is difficult to demote those employees who are not performing at high levels.
Going a step further, unions can discount worker education and experience. Because of seniority, the perfect employee may not get the job because they have not been with the company/union a specific amount of time.
Con 4: Unions can drive up costs.
Though it is a pro that unions can often get higher compensation for their members, it can likewise be stated that hiring unionized workers can be more expensive than hiring non-unionized workers. It also comes with added safeguards and rules and regulations that can lead to hire litigation and negotiation costs should issues be taken to arbitration or put through a grievance process.
The above pros and cons were in no way designed to change positions on whether or not unions are more positive than negative or vice versa. As with everything, there are elements of both in the argument. It depends on whether or not a company’s culture is ripe for a unionized workforce.
HR professionals must also consider the changing face of unions. At one point in time, unions were negatively perceived and were less diversified. That is no longer the case. More and more, union membership is looking less white male and more inclusive. And though the numbers show a decline in unions, there are some signs resurgence is on the way. Time will tell as to how that plays out.