chapter 35: unions jimmy hoffa teamster president -fight-to-end-child-labor#the-fight-...

Chapter 35: Unions

Jimmy Hoffa Teamster President

http://www.history.com/videos/the-fight-to-end-child-labor#the-fight-to-end-child-labor

http://www.youtube.com/watch?v=tsWVzTK0__s

http://www.history.com/videos/the-fight-to-end-child-labor



http://www.youtube.com/watch?v=tsWVzTK0__s

American Labor Movement

• Began in 1836 in Massachusetts with the first child labor law: children under the age of 15 were forbidden to work in incorporated factories, unless they had attended school for three months the prior year of their employment.

American Labor Movement

• Labor Movement primarily concerned with wages, hours, safety & the right to organize (unionize).

Reaction to Early Organizing: The Criminal Conspiracy Doctrine

Prohibited all organization of workers, labeled them conspiracies

The earliest legal regulation of union activity, adopted from British common law.

Used in a case against cordwainers* in the city of Philadelphia 1806.

*make fancy shoes

Labor Union:

• collective organization of employees who bargain as a group (joint bargaining) with employers for wages, benefits, working conditions, grievance procedures, etc.

Craft Unionism

• Organizing a union in a manner that seeks to unify workers in a particular industry along the lines of the particular craft or trade that they work in by class or skill level

Industrial Unionism

• Organizing all workers in the same industry are organized into the same union - regardless of skill or trade - thus giving workers in one industry, or in all industries, more leverage in bargaining

Terence V. Powderly; Knights of Labor

Business Unionism• Philosophy that organized

labor is a business that sells labor.

• Unions purpose: improve wages, hours, and working conditions.,

• In contrast to "social" unionism, which emphasized the welfare of the working class as a whole, i.e. promote socialism etc.

Uncle Sam: “Get rid of your dangerous companion”

WORKER UNIONISM

• The International Workingmen's Association (IWA) : Aimed at uniting political groups and trade unions in a class struggle based on Marxism.

Industrial Workers of the World aka "Wobblies"

• "There can be no peace so long as hunger and want are found among millions of working people and the few, who make up the employing class, have all the good things in life.”

Mother Jones

Industrial Workers of the World (IWW)

• The IWW founded in Chicago 1905 at a convention of two hundred socialists, anarchists, and radical trade unionists from all over the United States who were opposed to the policies of the American Federation of Labor (AFL).

Percentage of workers are members of labor unions

• 2009: 12.3% 15.3 million • 2008: 12.4% • 1983: 20.1% 17.7 million• 1954: peak (32% of labor force)

UNION MEMBERSHIP ASPERCENTAGE OF EMPLOYMENT, 2003Membership as Percentage of Payrolls

Who is in a Union?

Who is Not in a Union?

• Farmers• Waitresses/Services

Do labor unions influence non-union shops?

• Probably not. • Unions can raise

wages in unionized sectors, but the law of demand shows that fewer workers will be hired at the higher wages.


• With fewer high-paying union jobs, large numbers of workers will move to the non-unionized sector, depressing wages in the nonunion sector.


• If union workers get a 10% wage premium, nonunion workers would be paid a 10% discount, so that overall average wages won't increase.

The 3 phases of the labor movement

A) The Repressive Phase of the labor movement: prior to 1930

B) The Encouragement Phase: 1930- 1945

C) The Supervision (Intervention) Phase; after WW II

The Repressive Phase of the Labor Movement

Prior to 1930, unions were opposed by courts and successful firm tactics.

The courts used the criminal conspiracy doctrine and restraint of trade arguments to issue injunctions preventing union actions.

The Repressive Phase of the Labor Movement: anti-union techniques of

managementDiscriminatory Discharge:

termination for:whistle-blowing on violations or

crimesrefusing to commit illegal acts

for your employerdiscrimination on the basis of

your age, race, color, national origin, gender, disability, or for taking maternity or family medical leave

The Repressive Phase of the Labor Movement: anti-union techniques of management

1. Blacklisting: which denied workers chances to get employed elsewhere;

lists of union members shared or circulated between multiple organizations to prevent hiring of employees who have been critical of management or advocated on behalf of members of their profession.

The Repressive Phase of the Labor Movement: anti-union techniques of management

Lockout: tactic of withholding jobs, to hinder union organization or to gain leverage in labor disputes.

It is often accomplished by literally locking workers out of the workplace, but it can also be achieved through work stoppage, layoffs, or the hiring of TEMPORARY nonunion replacement workers (scabs, rats).

Lockouts• The rulings of the

federal circuit courts as well as various state courts, the right of employers to use the lockout has been upheld.


Yellow-Dog Contract: firms required new employees to sign a ‘yellow dog’ contract promising not to join a union.

Coal Creek: Tennessee Coal Mining Company (TCMC) rejected the demands, and on April 1, 1891, they shut down their mine. Two months later they demanded the miners agree to a yellow-dog contract before working in the mine. The miners refused. Mine reopened with convict labor.


Company Unions: a trade union which is located within and run by a company or by the national government, and is not affiliated with an independent trade union.

Company unions were outlawed in the United States by the 1935 National Labor Relations Act

Samuel Gompers The American Federation of Labor (AFL) 1886

AFL was successful because it was guided by 3 ideas -

1. a practical approach of business unionism: higher wages so that they could enjoy an "American" standard of living

2. neutrality in politics 3. trade autonomy: it was

made of trade (or craft) unions. Limited membership to skilled labor that could be grouped workers into locals based on their trade or craft identification

Gompers’ AFL supported US in WW I

• Gompers established an wartime labor policy that laid out government support for independent trade unions and collective bargaining.

• Yet Gompers’ had a deep distrust of government intervention in labor/management relations & collective bargaining.

Pro-labor legislationThe Encouragement Phase

Pro-labor legislation:New Deal’s National

Labor Relations Act of 1935, (Wagner Act), the federal government guaranteed the rights of workers to organize and bargain collectively

Pro-labor legislation Norris-LaGuardia Act of 1932

prevented yellow-dog contracts and injunctions*

* (court ordered stop orders prohibiting the aiding or abetting of a strike or boycott down to the most minute tactics).

Pro-labor legislation Wagner Act of 1935

Legalized Unions

Created the National Labor Relations Board and prohibited company anti-union discrimination

Wagner’s Act 1935NLRB

• The National Labor Relations Board

• Its purpose is to legalize the formation of unions.

• Legalized collective bargaining and for workers to chose their representives to bargain for them.

The Congress of Industrial Organization, 1936

• CIO formed by John L. Lewis. The purpose of the CIO was to unionize the low skilled employees (instead of the highly skilled crafts of the AFL) and to present a united front to the employers in collective bargaining procedures. The CIO rejoined the AFL in 1955.

Miller-Tydings Fair Trade Act, 1937

• The intent was to address concerns about big chains pushing out small retailers through loss leader (predatory pricing) pricing.

• The Act was repealed in 1975

Intervention Phase Legislation:

Taft-Hartley Act of 1947

Prohibits unfair labor practices (such as featherbedding, sympathy or jurisdictional strikes) and outlines union administration requirements, and provides for a cooling-off period in negotiation.

Government intervention required to prevent unions from having the power to shut down or sap the strength of key industries.


• It forbids jurisdictional strikes* and secondary boycotts (sympathy strikes).

*Illegal strike over the dispute which trade union should have the right to represent a particular group of employees in an organization


• It forbids unions from contributing to political campaigns.


• It allows the president to appoint a board of inquiry to investigate union disputes when he believes a strike would endanger national health or safety, and obtain an 80-day injunction to stop the continuation of a strike.


• It declares all closed shops illegal.

• It permits union shops only after a majority of the employees vote for them.

Closed Shop:

• a form of union security agreement under which the employer agrees to only hire union members, and employees must remain members of the union at all times in order to remain employed. In response to the abolishment

of the closed shop.

CLOSED SHOPS: illegal in US

• The Taft-Hartley Act outlawed the closed shop in the US in 1947

Right-to-work laws

• prohibit making membership in a union a condition of employment, either before or after hiring.

• enforced in 22 states, (mostly in the southern or

western U.S.), • part of the Taft-Hartley

Act, which

Intervention Phase Legislation: Landrum Griffin Act of 1959:

• Provides for election and accounting procedures.

• Because unions have control over large sums of money from union dues, some unions (most notably the Teamsters union) have been infiltrated by undesirable individuals and organized crime.

• The act was intended to protect the interests of the members.

Taylor Law, 1967

The Public Employees Fair Employment Act • Defines the rights and

limitations of unions for public employees in New York.

• Makes strikes punishable with fines and jail time.

Public Employees Law

• provides job safety and health protection for workers through the promotion of safe and healthful working conditions throughout the

State.

A union shop

• a form of a union security clause under which the employer agrees to hire either union members or nonmembers but all non-union employees must become union members within a specified period of time or lose their jobs.

Preferential hiring agreement

• is a system under which employers agree to hire only union members as long as the union is able to fill demands for workers. This agreement is secured as part of agreements between the unions and the employers.

An agency shop

• A form of union security agreement where the employer may hire union or non-union workers, and employees need not join the union in order to remain employed.

• However, the non-union worker must pay a fee to cover collective bargaining costs, known as the "agency fee."

Open Shop:

• a place of employment at which one is not required to join or financially support a union as a condition of hiring or continued employment (aka Merit Shop).

Local Business: Open or Closed, or

Union or non-union? • Hardinge Inc.• One Hardinge

Drive Elmira, NY 14902-1507

• Open Shop• Has laid off

workers who have been there for 20-30 years

Local Business: Open or Closed, or Union or non-union?

• Tops Market• chain based in

Williamsville, NY, with stores in the western and central regions of that state and in northern Pennsylvania

• Find out!

UNION DECLINE• Since the 1950's, the

union membership has declined from 25% to15% of the labor force.

• Automation: factories have introduced labor- saving automated machinery to perform tasks previously handled by workers

UNION DECLINE

Non-union > Union

• In manufacturing b/c firms migrate south.

• Labor fears losing jobs if unionizing b/c of threat of outsourcing & imports.

Outsourcing hurts Unionization

• Companies producing for U.S. markets are substituting cheap labor for expensive U.S. labor (i.e. union).

• The U.S. loses jobs to cheaper foreign labor, so unionized industries in the US have lost jobs.

http://videocafe.crooksandliars.com/david/romney-adviser-defends-bain-sending-jobs-chi

http://www.cbsnews.com/8301-18563_162-57472228/what-was-romneys-role-at-bain-during-outsourcing-/





Reasons for Union Decline: Structural Change Hypothesis

shift of the economy toward service industries where union membership is difficult to maintain,

The shift to service industry

• Where unions traditionally have been weaker.

• Women, young people, temporary and part-time workers -- all less receptive to union membership -- hold a large proportion of the new jobs created in recent years.

What do these Statistics tell us?

UNIONS DECLINE:

Increased security from other sources (e.g. social security), the government and employers now provide services that were previously provided by unions.

The government provides workers’ compensation and health and safety laws.

Some firms try to prevent unionization by using grievance procedures.

UNION DECLINE: Structural Change Hypothesis

• U.S. auto industry has been gradually moving away from Detroit southward, building plants in the Southeast for the past 25 years, lured by tax incentives and cheaper, non-union labor.

Managerial Opposition Hypothesis:

Change in managerial attitudes. The increased union wages in the 1970s caused firms to fight unions more aggressively.

• Firms may hire permanent strike breakers, illegally fire pro union workers, hire consultants, etc.

• The number of illegal anti-union activities have increased but are difficult to prove

Collective Bargaining

negotiations between an employer and a union or group of employees so as to determine the conditions of employment.

The 4 basic parts of a Collective Bargaining Agreement

1) Written, legally enforceable contract for a specified period (usually one year).


• Is between the management of an organization and its employees represented by an independent trade union.


It sets down and defines ‘conditions of employment’ only.

(wages, working hours and conditions, overtime payments, grievance procedures, holidays, vacations, benefits, etc.)

NOT jobs description, management decisions (who, what, where, when to produce)


• Includes procedures for dispute resolution. (Grievance procedures)

The law of Collective Bargaining

• The employer may not refuse to bargain over mandatory subjects of bargaining, include wages, hours, and other terms and conditions of employment.

• The employer and the union are not required to reach agreement but must bargain in GOOD FAITH over the mandatory subjects.

Arbitration

• A form of alternative dispute resolution (ADR), is a legal technique for the resolution of disputes outside the courts, where the parties to a dispute refer it to one or more persons (the "arbitrators"), by whose decision (the “ award") they agree to be bound.

The economic effects of unions: Do unions raise wages?

• Unions cannot negotiate higher wages in isolation from market forces. Market forces play a strong role in the labor market, and unions cannot operate independently from the market.

• The more (less) competition present from nonunion producers and foreign competitors, the less (more) bargaining power the union has.

The economic effects of unions: How efficient and productive are unions?

• Union employees do earn about 10 to 15% higher wages.

• However, it is argued that the professions easier to unionize are higher paying and the higher wages would have existed anyway.

How efficient and productive are unions?

• Some restrictive union strategies are viewed as reducing employment.

• However, unions' impact can also be argued as beneficial for firms since it requires them to be more efficient in using their resources.

Decrease in union prestige

• A result of the union contract giveback during the recession of 1981-82,

• Some American industries were deregulated (ex: airlines).

• Some of the give backs were forced out of unions with the help of bankruptcy laws, (ex: Eastern Airline).

The economic effects of unions: Negative View: Featherbedding

• Featherbedding is the practice of hiring more workers than are needed to perform a given job, or to adopt work procedures which appear pointless, complex and time-consuming merely to employ additional workers. ILLEGAL

http://www.youtube.com/watch?v=gBG8JapD0GQ

http://www.youtube.com/watch?v=gBG8JapD0GQ

The economic effects of unions, Negative View: Work Rules

• Regulations governing on-the-job standards and conditions of work (such as those affecting health and safety of

workers) that are incorporated into collective bargaining agreements, create inefficiencies.

The economic effects of unions:

Strike: a work stoppage caused by the mass refusal of employees to perform work. A strike usually takes place in response to employee grievances.

Strikes can cause major disruptions to industry and even the national economy.

The economic effects of unions:

3. Labor Misallocation: as a result of the union wage advantage.

(but studies suggest that the efficiency loss is minimal - perhaps only a fraction of one percent of U.S. GDP).

The economic effects of unions: How efficient and productive are unions?

The economic effects of unions Positive View: Shock Effect

1. Managerial Performance: Managerial performance may be improved when wages are high because managers are forced to use their workers in more efficient ways.

The economic effects of unions Positive View:

2. Reduced Worker Turnover: Worker turnover may be reduced where workers feel they can “voice” dissatisfaction and have some bargaining power. This contributes to increasing productivity.

“Voice Mechanism”

• opportunities for union members to communicate their collective concerns to management: collective bargaining, contract administration, grievance procedures

• Reduces labor turnover, saving labor costs.

The economic effects of unions Positive View:

3. Seniority and Informal Training: Seniority promotes productivity because workers do not fear loss of jobs, and informal training may occur on the job because workers do not compete with one another in a seniority‑based system.

COSTS OF A STRIKE• A strike imposes costs on both the employer and the

employee. • Employer costs: 1. Lost money during the strike 2. Possible

permanent or long term loss of market share (e.g. UPS), either due to switching or customer dissatisfaction (baseball or basketball).

• Employee Costs 1. Lost wages during strike (UAW strike lasted 8 weeks last summer). 2. Profit-sharing? 3. Fewer jobs in the long run if there is a permanent loss in market share.

• Point: Strikes receive worldwide, media attention, but are by far the exception. Every year there are 120,000 contracts negotiated, and far more than 99% of the time contracts are settled without a strike.

Unions increase inequality

Since union workers usually earn more than nonunion workers, and since union members in higher-paying occupations tend to exercise more clout than union members in lower-paying ones, higher union membership can increase income inequality.

Perks and other treats Unions bring

Perks: an incidental benefit awarded for certain types of employment (especially if it is regarded as a right); "a limousine is one of the fringe benefits of the job"

Perks and other treats Unions bring

Fringe Benefits: Compensation in addition to direct wages or salaries, such as company car

You win some, you lose some

Givebacks: a union term for the reduction or elimination of previously won benefits.

Fair trade

• A social movement and market-based approach to help producers in developing countries make better trading conditions and promote sustainability.

• Not a union activity, may be seen as a short term threat to unions, but in the long run will help increase demand for union made goods.

Do unions reduce the inequality with which earnings are distributed

B) Promotes Equality:

1. Uniform wages within firms:

2. Uniform wages among firms:

How unions affect inflation

• If union agitation leads to wage increases, will that cause prices in general to increase?

• Remember, change in income shifts Demand


• The quick answer is, No, not if the demand for money remains the same.

• Higher wages cause prices to increase,


• If unions succeed in wage hikes, and employers raise the prices they charge consumers to maintain their own profit margins, and the supply of money remains the same, then something else has to "give."


• Either the prices of goods and services in nonunion sectors have to fall and offset the union sector hikes, or people's cash balances need to fall, in terms of their purchasing power.


• Unions (or OPEC countries, for that matter) cannot change the supply of money.

• If their actions do not somehow indirectly alter the demand for money, then they clearly cannot change the price of money.

• So, unions can't directly cause price inflation.

Wage Freezes

• Attempt by a government to restrain wage-push inflation by holding wages at their existing level by force of law.

That was One View…

How unions affect inflation:

Higher Wages & Higher Unemployment

Effects of Unions increasing wages

Higher wage Wu causes Labor Demanded to decrease from L1 to L2; The displaced workers increase employment in Sector 2 from L’1 to L’2 . Wages decrease from Wn to Ws; Ws stands for Labor Surplus Workers wages.

Effects of Unions increasing wages

The loss of output in Sector 1 is B + C + D. The gain in Sector 2 is F + GSo, the net loss of output is C.

Unions create a decline in economic efficiency.

Non Union output = area of rectangle 0L1 times Wn to D1

Union output = area of rectangle 0L2 times Wu to D1

Wages & Fringe BenefitsUnion vs Nonunion

Net benefit of Unions to society

• Even as union wages are more than nonunion workers’; their net effect was to reduce income inequality.

• By standardizing wages in an industry, unions create stable levels of higher wages.

• That remains true, though perhaps not as true as it was 30 years ago.

State of the Unions

• In the 1980's, unions suffered from scandals of corruption and losing public favor.

• President Reagan broke one union and declared it illegal. PATCO, a union of air-traffic controllers was disbanded by the Federal government because they were determined to be an illegal union since they vital for interstate commerce and public safety and could not strike.

State of the Unions

• In the 1980s unions agreed to givebacks, in which employees agree to reduced wages and benefits in return for job security, particularly in the manufacturing industries.

• In response, employers have given unions a larger voice in the allocation of jobs and in the work environment.

Union Membership as a % of Total

Employed

Employee Free Choice Actbetter known as the Card Check bill

1. Allow a union to be certified as the official union to bargain with an employer if union officials collect signatures (Card Check System) of 50% of workers

i.e. easier unionization

Critics of the Bill point out that this signature collecting process eliminates Secret Balloting

Employee Free Choice Act

2. the Bill would require employers and unions to enter binding arbitration to produce a collective agreement at latest 120 days after a union is recognized.

Employee Free Choice Act

3. the Bill would increase penalties on employers who discriminate against workers for union involvement.

Still be decided upon as of 1/2/2012.

chapter 35: unions jimmy hoffa teamster president -fight-to-end-child-labor#the-fight-...

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