Friday, October 28, 2022

Unions: the leverage of the group versus the individual

 

     "I'm a good employer. I already give among the best benefits in the business. Retention is high and voluntary attendance at the company functions is good. Why would my employees want to be part of a union?"

     In a private company, there are owners, employees (including managers), and customers. In a publicly traded company, board members and stockholders are added to the mix (plus market analysts). In an ideal world, everyone is well taken care of and all are happy. In a booming economy and a booming company, it may get close to that point (though the word "more" seems to be an unrelenting fixture within the market economy -- especially in the US).

     But the economy is NOT always booming. And companies, either through mistakes or changes in the market, can lose the gleaming shine that makes everyone pleased with them. In these periods of decline, even when no mistakes have been made, choices must be made as it is no longer possible to even attempt to please everyone. 

     What are the priorities of a company? I am in agreement that well-cared-for employees will voluntarily want to do the best they can for the company and the customers. Thus, a high priority exists to take care of the employees. But, for publicly-traded companies, the happiness of the stockholders translates into higher stock prices and, thus, greater value to all who have invested in the company. Depending on company benefits and ownership, this may be directly of financial benefit to many, or most, of the employees. This argues that perception of stock/company value should be of the highest priority.

     Line managers are rarely considered to be among the most important parts of a company. However, for publicly-traded companies in the US, the advisory boards seem to want to push C-level salaries, bonuses, benefits, and parachutes as high as conceivable based on the idea that if their C-level execs are paid so much they (and the company of which they are part) will be perceived as also being "winners" within the game of acquiring the "best" executive level people. This competitive formula is difficult for C-level people to resist yet it does factor into how the income of the company is distributed.

     Moving back to the original question then, why would people want to be part of a union?

     Treatment of employees depends on company policies. With changes in high-level corporate management, company policies can change. They may change due to changes in corporate profitability or they may change due to changes in company advisory culture. Without a union, employees are left in the same way that most people perceive Blanche DuBois in the play/movie "A Streetcar named desire". As her character is quoted, "I have always depended on the kindness of strangers".

     Within a smaller company, most people should know each other and, certainly, all of the employees should know their managers and the managers know their employees. But, what about within a company with thousands (maybe tens of thousands) of people? The higher-level managers will not know all of the employees. The general employee is indeed in the same situation as Blanche DuBois.

     And that is a very insecure place to be. 

     Supply/demand can give the general employee leverage. If people of desired skills and experience are difficult to attract and retain, they inherently warrant more support. But if it is perceived that the employee may easily be replaced with someone else, they have very little perceived inherent value and have almost no leverage individually.

     That word "individually" is the key to unions. While a single employee has limited leverage, the majority (or universal) set of employees of a company has great leverage.

     Does being part of a union have disadvantages? As is true of many things, the advantages have a shadow side. Being part of a group, rather than an individual, means that there is less flexibility for the company to give unscheduled perks -- such as extra "free" days, or swag packages, or anything that may not be applicable under the terms of the agreements with the workers' union.

     For smaller companies (and some well-structured larger companies), unions can lessen the feeling of being part of a company "family". Also, a union that continues to grow may encounter the same problems as happened in the 1970s and 80s where leadership is now in a hierarchical position of power over the "rank and file" and the power of the group is used more for personal power and control than for the benefit of the employees.

     Companies have many sub-groups to consider, and take care of. Changing conditions carry with them a change in the ability to take care of each sub-group. Unions can help give individuals leverage -- especially within large companies -- but that same grouping carries certain limitations.

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