Labor Union- A need in an Industrial Environment or just another Money-Making Community?

Labor Union- A need in an Industrial Environment or just another Money-Making Community?

The primary meaning of labor union means an established association of workers/labors, frequently in a trade or profession, developed to protect and facilitate their rights and interests. Some people say that “Unions” work like a democracy. They hold elections for administrators who make decisions on behalf of members, giving workers extra power on the job. A local union is a locally-based group of workers with a permit from a national/international union, for instance, United Auto Workers (UAW) or the Service Employees International Union (SEIU). A local union may incorporate workers from the same company or field. It may also have labors from the same business sector, employed by diverse companies. Whereas others point the fact that these unions work to collapse native industries and debate that unions harm the economy.

Since the Industrial Revolution, often unions have been attributed to safe-guarding enhancements in working conditions and wages. Many unions were formed in production and resource companies, organizations operating in steel mills, mines, and textile factories. Over time, however, labors have expanded into other industries. In recent decades, labor unions have undergone limited growth due to a shift from “old economy” industries, which frequently involved manufacturing and large corporations, to smaller and medium-sized businesses outside of production. Recently, potential union members have spread into a broader assortment of companies. This makes the collective business a more complicated activity, as union leaders need to work with a more extensive set of managers and often have a harder time organizing employee. The progression of new labor has also transformed the role of unions. The usual focus of union leaders has been serving workers when bargaining with managers; however, when developed markets shift away from a reliance on manufacturing, the line between manager and worker becomes blurred.

The point of concern arise on the parameters of the economy, how does union affect the economy?

Proponents say, because of the involvement of labor union, the push for minimum wage rises. Minimum wage raises the labor costs for corporations using low-skilled labors. This reduces the gap between the wage rate of low-skilled and high-skilled labors; high-skilled workers are more prone to be represented by a union.

  • Also, it Increases the marginal productivity of its workers; which is often made possible through training.
  • It supports limitations on imported goods through tariffs and quotas; this boosts demand for domestic production and, hence, local labor.
  • Lobbying for stringent immigration rules – This, in turn, restrains growth in the labor supply, especially of low-skilled workers from overseas. Like the effect of rises in the minimum wage, a limitation in the number of low-skilled workers pushes up their earnings. This makes high-skilled laborers more attractive.

While on the other hand, opponents believe that:

  • Unemployment is a big problem in the U.S, and labor cartels play an essential role in that. In most states, joining a union isn’t a choice; if you want to work at individual organizations or in specific enterprises, you must present to the union monopoly and provide dues. While on the flip side, union members may see some benefits from this, the overall effect in the economy is adverse.
  • Monopolies on labor limit jobs – More unemployment means more people on government aid. Further, more government aid means more taxpayer money is required to provide for those individuals. Even after that, if that wasn’t enough, public sector unions use their political weight and monopoly on public sector jobs to force governments to give them lavish salaries and pensions. Unions exist to leverage employers.
  • Also, because unions get tons of money in dues, unions have sizable bank accounts to lobby for influence. Unions were some of the biggest money players of the 2014 midterms.
  • Unions have unquestionably left their mark on the economy and remain to be significant forces that develop the business and political environments. They exist in a wide variety of industries, from heavy manufacturing to the government, and assist workers in obtaining better wages and working conditions. However, their existence is still doubted on so many aspects.

What’s your take on this? Do you believe labor unions help or hurt the US economy?

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