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THE ROLE OF LABOR UNIONS IN HUMAN RESOURCE MANAGEMENT When a public or private organization is unionized, the labor union influences almost all human resource programs and practices. The major purpose of a labor union is to attain fair treatment for workers in such areas as compensation, including health and retirement benefits, safe working conditions, working hours, job security, and work-life programs. According to the United States Bureau of Labor Statistics, about 10.3 percent of wage and salary workers Ire union members, a level that has remained stable for several years. The union membership rate has declined from a high of 20.1 percent in 1983, partially because of the manufacturing decline in North America. The unionization rate for government workers is 33.6 percent, whereas the rate for private sector workers is 6.2 percent. The most heavily unionized public sector workers is protective service occupations (33.8 percent) and in education, training, and library occupations (33.1 percent). The most heavily unionized occupations include police officers, firefighters, and teachers. Among private industries, utilities, transportation, telecommunication and construction have the highest union membership rate. Because the manufacturing sector has been the hardest hit by foreign competition, union leaders are often unable to push for improved compensation including wages and health retirement benefits. Company executives can use the threat of sending work offshore when union demands are too high. Another alternative for an American employer is to threaten to relocate operations to a state where union membership is low, such as South Carolina (2.1 percent), or North Carolina (3.0 percent).² Low-wage workers appear to be important to future union organizing because many of these workers are performing jobs that cannot be globally outsourced. The union movement for a higher minimum wage in recent years could result in more workers earning enough money to be able to afford union dues. Also, low-paid service workers represent growth potential for unions, with only 1.3 percent of workers in the food industry being organized. A concern management has had about unions for many years, particularly in manufacturing, is that union leaders attempt to avoid flexible work rules that allow workers to rotate jobs or shifts in work assignments. For example, a welder would not be allowed to pitch in as a parts assembler. Another concern is that in some industries, union demands for compensation have made it difficult for companies to remain competitive. As a result, foreign car makers have established manufacturing facilities in several Southern states in recent years by utilizing generous tax benefits and laws that make it easier to build a largely non-union workforce." Two union counterarguments are that workers should: (a) receive a fair share of profits, and (b) not be expected to receive low wages to compensate for management bungling. A reasonably balanced point of view is when employers offer workers what they want and need, employee desire to unionize diminishes. Human resource strategies and policies like these discourage union activities, as they address the type of demands labor unions typically seek. • Fair and consistent policies and practices = Open-door management policies (workers are free to discuss problems with management) Competitive pay and benefits . Employee trust and recognition LEARNING OBJECTIVE 7 Understand the role of labor unions in human resource management. labor union An organization formed to attain fair treatment for workers in such areas as compensation, including health and retirement benefits, safe working conditions, working hours, job security, and work-life programs.
Many instances exist of healthy partnerships between management and labor unions in which both sides gain advantage. One example is Costco Wholesale Corpora- tion and the International Brotherhood of Teamsters. Costco provides wages and benefits higher than industry standards and demonstrates that treating employees well is good for business. The annual membership fees Costco collects from customers helps fund their generous benefits. Perhaps not every business firm is in a position to have such progressive labor relations, yet the message is clear that working well with all stakeholders is associated with business success.