Module 3 - Addendum Lecture: Union Actions and Impacts PDF

Chapter 5: ADDENDUM - Union Actions and Impacts Unions take many kinds of actions in support of their objectives and these have economic and social impacts, both in workplaces and within Canadian society as a whole. There is a broad range of union activities, from traditional ones such as collectiv...

Chapter 5: ADDENDUM - Union Actions and Impacts Unions take many kinds of actions in support of their objectives and these have economic and social impacts, both in workplaces and within Canadian society as a whole. There is a broad range of union activities, from traditional ones such as collective bargaining and political action to modern ones such as the creation of union-supported venture capital corporations. Unions' have wage impacts, both on employers and on other, non-unionized workers in addition to unions' productivity effects and impacts on the management of organizations and broader effects on Canadian society as a whole. I) Union Actions Although collective bargaining and political action remain at the core of unions' activities, the scope of both has expanded considerably in recent years. In addition, unions have expanded their overall sphere of action to take in such things as participation in joint union–management ventures, publicity campaigns, and educational and business ventures. Thus, while their general objectives remain the same as those of unions in the past, today's unions tend to operate within a far broader context, and they also have available to them a range of strategies and technologies which earlier unionists could only dream about. Collective bargaining Wages and job security remain unions' central concerns at the bargaining table. But the range of bargaining issues is now far greater than it was 100 years ago. During the early postwar period, unions began to negotiate a broad range of fringe benefits, including pensions, vacations, and medical and hospitalization insurance. In the last part of the previous century, demands from women and ethnic minority group members caused unions to negotiate maternity and paternity leave provisions, flexible schedules, and anti-discrimination and anti- harassment provisions. The introduction of new technology and unknown substances into workplaces has caused unions to seek to negotiate protective provisions in these areas, while concern for their members' well-being has led many to negotiate employee assistance programs to help members with drug, alcohol, or other personal problems. In addition, more and more unions have begun to engage in integrative (problem-solving) bargaining, rather than the distributive (adversarial) bargaining which was the norm in the past. The move toward integrative bargaining requires a significant attitudinal change on the part of both parties, a change which may not be easy to achieve given that many managers and union leaders have been brought up to distrust the other side. Joint union–management ventures at the workplace In recent years, unions have begun to participate in a large number of joint ventures with management. Many of these joint ventures are designed to increase morale and productivity. They range from single-issue labour– management committees to broad gainsharing plans such as the Scanlon Plan, and can also include quality circles, self-directed work teams, and employee stock ownership plans. In some cases, unions and management have negotiated joint governance arrangements whereby the union becomes, in effect, a full partner in managing the organization. While they offer many opportunities for unions, they also pose many challenges. Most importantly, they seem to entail a radical transformation of the union's role, from that of workers' advocate to that of co-manager of the organization. They also open up far greater possibilities for direct communication between management and workers—possibilities that run the risk of reducing the union's influence in the workplace. For this reason, such joint governance schemes remain controversial within the labour movement. Joint participation outside the workplace Canadian unions are also involved in a variety of joint ventures with management outside the workplace. In recent years, unions and management groups have formed a number of sectoral councils to address such issues as training, economic restructuring, trade policy, and labour–management cooperation on an industry-wide basis. Among the best-known of such councils are the Canadian Textile Labour–Management Committee and Canadian Steel Trade and Employment Congress. In addition, Canadian unions have been involved in a number of tripartite or labour–management–government initiatives. Perhaps the most important of these is the Canadian Labour and Business Centre (CLBC), formerly known as the Canadian Labour Market and Productivity Centre, which in recent years has done research on labour related issues ranging from work hours to women's changing role in the workplace. Political action Most Canadian unions engage in some kind of political action. Actually, some kind of union political involvement would appear to be inevitable, given that unions' abilities to achieve their objectives depends to a large extent on the types of legislation and government policies in place. To influence legislation and government policies means getting involved in politics in some way or another. There is some difference of opinion within the labour movement as to the appropriate form political activity should take. While most unions believe their objectives can best be achieved through formal or informal affiliation, some unions and labour federations, notably the former Canadian Federation of Labour and Centrale des syndicates démocratiques, have argued strongly against any such affiliation. Over the years, linkages between the labour movement and the NDP and its forerunner party, the CCF, have generally proven beneficial to the labour movement in English Canada. Thanks in large measure to the work of its political partner, the labour movement has achieved basic bargaining rights, liberalized labour legislation, and a broad range of social programs to benefit all working Canadians. Much the same has been true in Quebec as between the labour movement and the Parti Québécois. In both cases, however, the linkages are now being questioned because of the tendency of NDP and PQ provincial governments to turn on their labour allies once in power. Another recent tendency is the carrying on of a broader range of extra- parliamentary political activity. A vehicle which a number of unions are now using to address political issues, particularly those around international development, is the Social Justice or Humanity fund whereby participating employers are required to contribute a certain quite nominal amount for each hour worked by a bargaining unit member. Publicity campaigns and member communication Like most other modern organizations, unions find they have to spend an increasing amount of their time and energy communicating, both with their members and with the public at large. External union publicity efforts serve a variety of purposes, ranging from informing the public what the union is doing on a particular issue to protesting government policy or expressing support for a political party. These campaigns are particularly important for public sector unions, whose bargaining rights are often severely restricted. Internal publicity efforts are needed both to keep members generally informed of what unions are doing, and to keep them “onside,“ especially with regard to controversial issues where the organization may be divided. Unions in business The severe recession of the early 1980s caused many labour organizations to start working proactively to create jobs and promote local and community development. It was at this time that the first labour-sponsored venture capital corporations began to appear. While the best-known of these ventures is the Quebec Solidarity Fund, launched in 1984 with support from the Quebec government, many other such funds have since been launched across Canada. Unions and labour federations have also been heavily involved in social housing and in using members' pension funds to promote such objectives as community development and affordable housing. The vehicle normally used for the latter purpose is an Economically Targeted Investment (ETI), a pooling mechanism that allows pension funds to channel a certain portion of their assets into such worthwhile ventures. In some cases, unions and their members have bought significant interests in the firms for which members work. The strategy has been used most often in single- industry towns where the employer wants to pull out even though the enterprise may still be viable. While many unions have been critical of employee buyouts, the Steelworkers have been a notable exception to this trend. Education The labour movement has been involved in education since the 19th century, when union halls often served as libraries, concert venues, and forums for public lectures and seminars. Ever since, unions have mounted a broad range of educational efforts. While many union-sponsored courses have obviously addressed 'core' union issues such as organizing and negotiating strategies, a recent trend has been expansion to include courses on personal development issues such as assertiveness and public speaking and contemporary economic and political issues of special relevance to members. For example, CUPE, which represents large numbers of health care workers, offers a broad range of health and safety courses of both a general and a specialized nature. Unions' expanded scope of action While collective bargaining, grievance-handling, and legislative and political lobbying continue to be central concerns for most Canadian unions, most have expanded their sphere of activity greatly in recent years. For example, many have entered into a broad range of partnerships with management, both at the workplace and beyond it. Politically their activities have moved beyond Parliaments and legislative assemblies to encompass coalitions with other progressive groups at home and with foreign unions and Canadian NGOs promoting international development and human rights overseas. Particularly since the mid-1980s, many unions have entered the world of business, learning how to use available funds such as pension monies to promote job creation, community development, and other social objectives. As for labour education, a number of unions, such as CUPE and the UNIFOR, have expanded the labour 'curriculum' beyond traditional 'labour' subjects to encompass personal development courses and technical courses in health and safety and environmental protection. Supporting all these efforts has been an increasingly sophisticated publicity apparatus using the full gamut of media approaches, from traditional newspaper and magazine ads to direct mail campaigns and the establishment of Web sites on the Internet. While this expanded scope of union action has not been uncontroversial, either within the labour movement or outside of it, most would probably agree that in today's economic environment, few unions can afford simply to “stay home and mind the shop.“ Overall, it appears likely that the scope of union action will continue to expand in the 21st century. II) Union Impacts Unions achieve a broad range of impacts both at the workplace and beyond it. While the impacts of greatest interest to any given individual are likely to depend upon the individual's general perspective, it is important to take the full range of impacts into account to have a good understanding of how unions operate in Canada today. Wage impacts are of obvious importance since the major reason why many workers join unions is to achieve higher wages. Overall, the direct union wage impact (or premium a worker receives from union membership) is in the 10-25% range in Canada, though it's far higher in certain industries such as construction. In general, the impact is greater for blue-collar than for white-collar workers, in the private sector than in the public sector, and for less-skilled than for more- skilled workers. Unions' impact on fringe or non-wage benefits is greater than their wage impact, since most unionized workers prefer to receive a relatively large proportion of their total compensation package in the form of such benefits, and indeed many employers prefer this as well, as a way of “locking workers in” to avoid costly turnover. Indirect union wage impacts are the effects unions have on the wages of non-unionized workers. Overall, the indirect effect of unions on wages is a small one—probably less than 4%. But it's misleading and perhaps not even very meaningful to speak of a single indirect union wage effect, since there are really two separate effects, pulling in different directions and applying to quite different groups of workers. The 'crowding' effect which results from added unemployment due to unionization in competitive markets tends to depress wages. On the other hand, the 'threat' or 'shock' effect which results from employers' willingness to raise wages to forestall unionization drives or the departure of skilled workers with scarce skills is a positive one. The former effect applies mainly to unskilled workers with little labour market power; the latter, to skilled professional or technical workers with considerable labour market power. In effect, the latter is a soft union-avoidance tactic, since its primary aim is to reduce workers' demand for union services. While the existence of a union/non-union wage differential tends to increase the amount of wage dispersion in the economy, overall the effect of unions is to reduce the amount of wage dispersion since there is less of a “gap” between the highest wage and lowest wage among unionized workers than between the highest wage and lowest wage of nonunionized workers. How unions achieve their wage goals Collective bargaining is unions' major method of achieving higher wages, but it is by no means the only method they use. Other methods include: a) support for restrictive licensing and credentialing policies for trades and professions (in order to keep potential competitors out), b) opposition to free trade agreements and liberalized immigration policies, and c) support for higher minimum wages and equal pay legislation, which is aimed at reducing the relative cost of union as opposed to non-union labour, thereby increasing or at least maintaining the demand for the former. In the political sphere, unions may also support changes to labour legislation aimed at improving the bargaining environment, such as liberalized certification and exclusion policies or more centralized bargaining structures which can increase their strike power. Union impacts on productivity It is extremely difficult to determine unions' overall impacts on productivity. One reason is that, outside the goods-producing sector, productivity itself can be hard to define, much less quantify. Another reason is that unions' productivity impacts often vary according to the nature of the individual union–management relationship, whose effect on productivity can only be determined by detailed, workplace-level case studies. Neoclassicists and others who take primarily an economic view of unions argue that unions reduce productivity by raising wages above competitive levels, by reducing outputs through the strikes they call, and by forcing management to agree to restrictive work rules that result in the substitution of machinery for human labour, and hence increased unemployment levels. Institutionalists and others primarily interested in workplace equity or equity within society as a whole argue that unions generally have positive effects on productivity. These include reduced quit rates and improved morale and worker management cooperation resulting from union grievance processes, joint committees, and other “workplace voice” mechanisms. They also argue that unions can induce manage to use more efficient production methods and personnel policies and that they can increase productivity by collecting information about the preferences of all workers, information that can help the firm select better personnel policies and a more appropriate mix of wages and benefits. Union impacts on management of the organization Here again, there's considerable debate over whether union impacts help or hinder organizations overall, although almost everyone agrees that those impacts are substantial. What can be said is that in North America, unionization does constitute a severe limitation on management's ability to run enterprises as it sees fit. Unions' most important impacts on the management of the organization come through the grievance process, work rules laid out in collective agreements, and joint participation with management in various committees. The fact that management must operate in accordance with the collective agreement makes management in a unionized environment more formal and more legalistic than it would otherwise be. Whether this is good for the organization or not depends on the type of organization being considered. To the extent that the collective agreement brings a degree of certainty to what might otherwise be confused, chaotic, or arbitrary management practice, the firm will likely benefit. To the extent that its work rules stifle creativity and innovation and cause everyone to be more concerned about legalistic observance of the contract than about doing their jobs better, the firm is likely to suffer. Here again, no theory can tell us whether the positive or negative effects are more likely to predominate; the only way to tell is to go to individual workplaces and do detailed case studies. Union impacts on society as a whole While unions’ impacts at the workplace level appear to be somewhat mixed, the situation is more clear-cut for society as a whole. At this more macro level, unions' impacts appear to have been almost entirely positive. These impacts, achieved mainly through unions' political participation, include publicly-funded medical care, unemployment insurance, public pensions, and other worthwhile social programs. The labour movement has also done a good deal to raise the profile of health and safety issues, encourage adult education, and to bring in employment equity, pay equity, anti-discrimination legislation, and other human rights measures benefitting all Canadians. All in all, the evidence strongly suggests that had unions never existed, Canada would be a much poorer and meaner-spirited country than it has become. III) Are Unions Still Needed? Many commentators argue that while unions may have served an important purpose in the 19th and 20th centuries, they are no longer needed in today's modern workplace where workers are almost always well paid and well-treated and where few have to labour under unsafe conditions. Others suggest that pay and conditions are not always good for today's workers and that many continue to be subjected to arbitrary management practices of various kinds. Another, more general argument in support of unions is that free trade unions seem to go hand-in-hand with democracy. Almost all democratic societies have such unions, while societies in which unions' rights are fully or partially restricted tend to be to some degree totalitarian or dictatorial. Yet another general argument in favour of unions is that without them, there would be no group in contemporary Canadian society big or powerful enough to provide a check to the economic and political clout of big business and the political right, or prepared to advance the economic and political interests of ordinary working Canadians.