Unions in the Global Economy

 

M4D1: Unions in the Global Economy
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Before you begin this activity, be sure that you have:

Read Textbook Chapters 8, 9
Reviewed the PowerPoints for:
Chapter 8 [PDF file size 11.4 MB]
Chapter 9 [PDF file size 9.4 MB]
Reviewed the Videos:
Bill Moyer’s Journal: Interview with Andrew Stern, President of Service Employees International Union (SEIU) (Links to an external site.)Links to an external site.

This discussion will provide you with a more sophisticated understanding of globalization’s impact on companies, unions and workers, and how it has impacted the collective bargaining process and issues.

Globalization refers to the integration of economies and societies due to the advances in communications, technology and transportation. It refers to both the expansion of international trade in goods and services and also the interdependence that connected with the integration of production across national boundaries. For example, for almost 100 years, automobile production was concentrated at the national level. It is now at the global level with autos often assembled from parts that are produced by suppliers in many countries.

Service occupations and industries have also been impacted by globalization. It is now possible for companies to shift knowledge work such as information technology to off-shore locations. And many countries import workers for low-pay service sector jobs. As a result, globalization has had a substantial impact on bargaining agendas. Employers and union need to carefully consider the economic environment within the workplace, the industry in which they operate, within the United States, and around the globe.

In your initial post please address the following:

How has globalization impacted the relationship between management and unions?
In your response, also address how it has also impacted collective bargaining and how unions have dealt with globalization.

Once you have posted your response, you must also read through your classmates’ posts. From the responses choose some that you find interesting and respond substantively to them. You are also responsible for responding to students who post comments regarding your initial posts. The goal is to create a dialog among the class.

See the Course Calendar for due dates for posts and responses.

Consult the Discussion Posting Guide for information about writing your discussion posts. It is recommended that you write your post in a document first. Check your work and correct any spelling or grammatical errors. When you are ready to make your initial post, click on “Reply.” Then copy/paste the text into the message field, and click “Post Reply.”

To respond to a peer, click “Reply” beneath her or his post and continue as with an initial post.
Evaluation

This discussion will be graded using the discussion board rubric. Please review this rubric, located on the Rubrics page within the Start Here module of the course, prior to beginning your work to ensure your participation meets the criteria in place for this discussion. All discussions combined are worth 20% of your final course grade.

M4D2: Wage vs. Non-Wage Issues in Bargaining
4 4 unread replies. 4 4 replies.
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Before you begin this activity, be sure that you have:

Read Textbook Chapters 8, 9
Reviewed the PowerPoint for:
Chapter 8 [PDF file size 11.4 MB]
Chapter 9 [PDF file size 9.4 MB]
Reviewed the Videos:
Bill Moyer’s Journal: Interview with Andrew Stern, President of Service Employees International Union (SEIU) (Links to an external site.)Links to an external site.

This discussion will help you understand how unions and management view wage vs. non-wage issues in negotiating a contract.

As your text notes, bargaining agendas are divided into monetary and non-monetary items. However, employers consider every bargaining item to be a monetary issue. It is also important to remember that there are few one-time costs in a collective agreement. Since the value of an employee’s benefits is linked to his/her wage rate, even a small wage increase will automatically increase benefit costs. This helps explain why employers have in recent years sought to cap employee benefit costs. Since health care and defined benefit pension costs are often unpredictable, we see ever-increasing efforts (both union and non-union) to have workers cover a greater percentage of their health care costs through higher prescription dispensing fees, and higher co-payments. This is also why we see so many companies close down their defined-benefit pension plans in favor of defined-contribution plans such as 401K plans. Moving to defined –c ontribution plans protects the employer from taking on high, uncertain legacy costs. Paying workers lump sums or bonuses rather than a percentage increase is another method of containing payroll costs. From a union perspective, moving more of the costs of benefits on to workers is a negative bargaining position. So too is paying workers lump sums or bonuses rather than percentage increases every year. Health and safety remain an ongoing issue in most workplaces.

Workforce demographics have a profound impact on bargaining agendas. Younger workers are more likely to be concerned with percentage wage increases and work flexibility, while older workers are more concerned with pensions and benefits. Unionized workers also tend to be older than non-union workers. Unions will eventually include younger workers as their current members retire. However, there is the potential for generational conflict within unions as older workers strive to maintain pensions and younger workers seek to find more flexibility and greater workplace compensation and recognition.

In your initial post please address the following:

Given the environment, what two (2) issues do you see as most important in negotiating a labor agreement? As part of your response, be sure to explain why the issues you selected are critical.

Once you have posted your response, you must also read through your classmates’ posts. From the responses choose some that you find interesting and respond substantively to them. You are also responsible for responding to students who post comments regarding your initial posts. The goal is to create a dialog among the class.

See the Course Calendar for due dates for posts and responses.

Consult the Discussion Posting Guide for information about writing your discussion posts. It is recommended that you write your post in a document first. Check your work and correct any spelling or grammatical errors. When you are ready to make your initial post, click on “Reply.” Then copy/paste the text into the message field, and click “Post Reply.”

To respond to a peer, click “Reply” beneath her or his post and continue as with an initial post.
Evaluation

This discussion will be graded using the discussion board rubric. Please review this rubric, located on the Rubrics page within the Start Here module of the course, prior to beginning your work to ensure your participation meets the criteria in place for this discussion. All discussions combined are worth 20% of your final course grade.

 

Expert Answer

Unions in the Global Economy

Unions in the Global Economy

The relationship between management and labor unions has been worsened by globalization. This is because management is no longer able to cater for the high union wages and employee benefits in the now cutthroat global economy where companies have to keep their costs low (Abraham et al., 2009). Having unions hurts the competitiveness of an organization at the global economy, making it difficult for the organization to compete effectively. Labor unions have largely been marginalized in a global economy. The changing economy, union busting, globalization, and labor outsourcing, companies are on a spiral downward on wages and benefits. In the global economy, companies have access to extremely low paid employees from developing countries, who undercut the low skilled employees from developed countries (Piazza, 2005). Management is resistant to unionization since there is a need to ensure competitiveness at the global scene. Unions find themselves unable to conduct collective bargaining since companies choose to let unionized employees go and employ the low paid workers from developing countries. Unions have not been able to deal with the effects of globalization, which has resulted in union decline.

References

Abraham, F., Konings, J., & Vanormelingen, S. (2009). The effect of globalization on union        bargaining and price-cost margins of firms. Review of World Economics, 145(1), 13-36.

Piazza, J. A. (2005). Globalizing quiescence: globalization, union density and strikes in 15            industrialized countries. Economic and Industrial Democracy, 26(2), 289-314.

Wage vs. Non-Wage Issues in Bargaining

 

Wage vs. Non-Wage Issues in Bargaining

When negotiating a labor agreement, there are a number of issues that need to be considered. First, the negotiators need to conduct research and understand the industry. The negotiating team needs to look at the external factors, including the compensation packages offered by other employer’s in the industry, the benefits they offer, and the recent contract settlement terms of comparable employers (Loughran, 1992). This is important as the negotiating team will acquire a favorable economic comparison, which will be helpful when conducting the labor agreement negotiation. Other employers may have implemented innovative and better measures that may be used by the team to facilitate the development of an agreement. Secondly, it is important that the negotiating team develops bargaining strategies and understands all the important aspects of the agreement or contract (Noe et al., 2006). A draft needs to be generated, addressing all the non-economic and economic (wage and non-wage) provisions of the agreement. This way, the negotiators will be able to voice their terms chronologically and the management will not be resistant to the negotiation as it will understand the terms clearly.

References

Loughran, C. S. (1992). Negotiating a Labor Contract: A Management Handbook (pp. 458-59).    Bureau of National Affairs.

Noe, R. A., Hollenbeck, J. R., Gerhart, B., & Wright, P. M. (2006). Human resource         management: Gaining a competitive advantage.

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