Trade Unions have existed over the past three hundred years in order to achieve various goals such as wage negotiations, better working conditions, firing and promotion of workers, retirement packages, workplace safety and policies etc. Trade Unions or Labor Unions as they are popularly known rose to fame after the industrial revolution where the mistreatment and lower wages of employees were the driving forces towards a creation of an organization of workers.
The statement being discussed is “Trade unions are a negative influence on work practices. They are an anachronism from another era, and do not belong in today’s work environment.” By no doubt this is a highly debatable topic since trade unions have faced equal amounts of criticism and appraisal. The statement itself is based on the various forms of criticisms trade unions have faced over the years. We will now analyze the various criticisms and appraisals of trade unions based on there functions and characteristics and the effects on the work practices.
Trade unions are notorious for the strikes they undertaken which has an impact on production and also causes social disruption. A major criticism towards trade unions is the fact that there existence is known to cause unemployment. Unionization results in the setting of minimum wages, at times above the equilibrium wage rates. The fact that prices are higher than equilibrium rates, a deadweight loss is created and its existence makes the labor market imperfect and inefficient. Higher wages are achieved at the expense of fewer jobs since demand for labor falls and eventually unemployment rises. Thus, as labor unions press for their own demands, the demands of the unemployed workers go unheard (K.D Ewing, 2005).
One other major criticism of trade unions is the fact that they contribute towards inflation. It makes sense, if unions demand higher wages then the companies would have to raise their prices in order to meet these demands. A raise in prices eventually affects a general increase in price levels. In fact, in 1979, UK’s inflation rate rose to 27% and a major driving force was the fact that strong unions negotiated higher wages.
Racism and harassment at the workplace are another factor. Although trade unions work towards eliminating the kind, they do not support or resolve such matters within the union. For e.g. if a black American women is subjected to racism by a white man, then the trade union would not know what to do. Since it represents all its employees, it would not know whom to support. In this respect trade unions are known to have ineffective policies towards racisms and sexism at the workplace (Joseph Stiglitz, 2002).
Trade unions are also marred by the phenomenon of narrow-mindedness. The fact that they are so engrossed in fighting or negotiating for their own rights that they overlook the long term goals of the organization itself. This means that long term projects which do not reap immediate rewards become unattractive for them (Edmund Heery, 2005).
Moreover, trade unions have been intolerant towards change as well. Changes in work practices, policies and regulations, production processes etc are hardly welcomed. Lastly, and most importantly, once part of a trade union, employee commitment gets transferred from the organization towards the union. This leads to lower morale and motivation to work.
These were some of the numerous criticisms that have been presented against trade unions. However, trade unions have also played a major role in shaping the business world. Work conditions, safety processes and employee treatment has improved drastically in organizations where trade unions operate. Ever since the industrial revolution, the systems have shifted towards employee centered processes, production techniques etc.
Firstly, even though the minimum wage rates set by the trade unions seem to be inappropriate they are not entirely inappropriate. Mostly companies are able to exploit workers through low wages and make extensive supernormal profits. Trade unions normally, negotiate a higher level of wages in light of these profits that the company makes. This also helps us answer another criticism regarding inflation. Most companies transfer excess profits towards wages therefore prices need not be raised all the time and thus effects on inflation remain low (Richard Hyman, 2007).
Trade unions also exist to counter balance monopsony powers of employers who set the wage rates. These wage rates are usually very low and unfair for the employees. Another important factor is that given the rapid development in industries, workplace safety and environment are in the lime light. Worker health and safety concerns are on the rise and trade unions ensure the same. Trade unions protect workers from exploitation and ensure that proper safety and health standards are met at the workplace (Edmund Heery, 2005).
Moreover, trade unions can also help negotiate productivity deals. Deals include negotiations based upon higher wages as a result of increased productivity. This highlights the fact that trade unions are not always narrow-minded. They have played an important role in increased productivity and the implementation of new work practices.
Even though trade unions have there drawbacks there existence is crucial for peace in the industrial world. Decisions based on collective bargaining and negotiations are far more beneficial for both the company and employees. Trade unions play a major role as a bridge between the management and the employees and become a channel of communications. Given rapid globalization and its consequences such as recessions, it is crucial for trade unions to exist so that workers’ interests can be protected, they can be protected against unfair dismissals and exploitation of various kinds. They have been known to have positive impacts on the work environment through fewer disputes. Thus, trade unions are completely a negative influence on work practices and definitely belong in today’s era.
- Edmund Heery (2005). Sources of change in trade unions. Work Employment Society, Vol 19, pg 91-106.
- Joseph Stiglitz (2002). Employment social justice and societal well-being. International Labor Review, Vol 141, pg 9-29.
- Richard Hyman (2007). How can trade unions act strategically? European Review of Labor and Research, Vol 13, pg 193-210.
- K.D Ewing (2005). The Function of Trade Unions. Industrial Law Journal, Vol 34, pg 1-22.