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WHO NEEDS UNIONS?

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Manual and service industry workers are often organized in labour unions, which attempt to ensure fair wages, reasonable working hours and safe working conditions for their members. British unions are known as trade unions because, as in Germany, they are largely organized according to trade or skill: there is an engineers' union, an electricians'; union, a train-drivers' union, and so on. In other countries, including France and Italy, unions are largely political: workers in different industries join unions with a particular political position.

Industrial relations tend to be better in countries, industries and companies where communications are good, i.e. where management consults workers on matters that will concern them, where neither side treats the other as an adversary, and when unions do not insist upon the preservation of completely uneconomic jobs and working practices. Although some employers and managers (and political parties) oppose the very existence of unions - even though, like doctors, lawyers, accountants, and so on, they might themselves belong to a professional association with similar basic aims - many management theorists stress the necessity of unions. In the 1970s, Peter Drucker wrote that 'Management is and has to be a power. Any power needs restraint and control - or else it becomes tyranny. The union serves an essential function in industrial society.'* Yet one of the chief objectives of right-wing governments in the 1980s (e.g. in Britain and the USA) was to diminish the power of trade unions, and to deregulate labour markets in accordance with the ideal of free markets.

As a result of deregulation, working conditions in many industries in many countries have worsened, leading to the creation of a great many casual, part-time, unskilled jobs done by non-unionized workers. France, for example, has the lowest number of workers in trade unions in the industrialized world. The unions now represent less than 10°/o of the French work force, and most of those are in the public sector. The vast majority of French workers seem to have rejected the confrontational politics of the main unions, notably the communist-controlled CGT. Consequently, when the largely non-unionized French lorry drivers blocked all the motorways in the 1990s, striking over the introduction of a new driver's licence with a penalty-point system (and over their working conditions in general), the French government found no one to negotiate with.

In fact, a number of politicians and business leaders are beginning to regret the weakness of unions. Some managers, including Antoine Riboud, the former head of the huge Danone food conglomerate, actively encourage unionization because they insist that a big company needs someone to represent and articulate the needs of the employees and act as a social partner to the employer. But there is clearly a problem if workers believe that the unions are incapable of doing this, and choose not to join them.

 

* Peter Drucker: An Introductory View of Management

Assignment 3. Find the words in the text whichmean the following.

1) people who work with their hands

2) a union for workers with a particular type of job

3) to ask someone’s opinion before making a decision

4) an opponent or enemy

5) too expensive, wasteful, loss-making

6) unlimited and unfairly used power

7) ending or relaxing restrictive laws

8) areas of the economy run by the local or national government

9) hostile, almost aggressive, seeking conflicts

10) a large corporation, made up of a group of companies

 

Assignment 4. Answer the following questions:

 

1) Peter Drucker says ‘Management is and has to be a power.’ What does this mean?

2) In your opinion, should unions be consulted before management makes decisions about the following?

a) manufacturing new products or offering new services

b) opening new factories, shops, and so on

c) closing existing factories, shops, and so on

d) changing working hours

e) hiring new staff

3) Should unions be represented on a company’s board of directors, as happens in some countries?

 

Assignment 5. Study the Active vocabulary and give the Ukrainian equivalents of the words and word combinations:

1) manual workers

2)service industry workers

3) to ensure fare wages

4) reasonable working hours

5) trade unions

6) industrial relations

7) adversary

8) uneconomic job

9) accountant

10) casual job

11) part-time job

12) unskilled job

13) non-unionized workers

14) the public sector

15) penalty-point system

16) to represent and articulate the needs of the employees

 

Assignment 6. Translate the sentences into Ukrainian paying special attention to the words given in bold:

 

1) "White collar" is a working class that is known for earning high average salaries and not performing manual labor at their jobs.

2) Since 1989, large companies in the United States have been required to let employees know 60 days in advance if there is going to be a massive layoff.

3) The global recession of 2008-2009 brought a great amount of attention to the risky investment strategies used by many large financial institutions.

4) In the United States, collective bargaining takes place between labor union leaders and the management of the company that employs that union's workers.

5) A go-slow may be used as either a prelude or an alternative to a strike, as it is seen as less disruptive as well as less risky and costly for workers and their union.

6) Collective bargaining consists of the process of negotiation between representatives of a union and employers in respect of the terms and conditions of employment of employees, such as wages, hours of work, working conditions, grievance-procedures, and about the rights and responsibilities of trade unions.

7) If there's no smoking on the premises of a high school, you can't even light up in the parking lot.

8) An individual that is working part-time at an office job instead of full-time is considered underemployed because they are willing to provide more employment, which can increase the overall output.

9) Casual employees are usually employed by the hour or by the day. They usually don’t get paid sick leave or annual leave. To make up for this they get extra pay called a casual loading.

10) A segment of the work force associated with a low skill level or a limited economic value for the work performed is unskilled labor. Unskilled labor is generally characterized by low education levels and small wages. Work that requires no specific education or experience is often available to workers who fall into the unskilled labor force.

11) Employers and workers seem to approach employment from vastly different perspectives. So how can the two sides reach any sort of agreement? The answer lies in unions. Unions have played a role in the worker-employer dialogue for centuries, but in the last few decades many aspects of the business environment have changed. With this in mind, it's important to understand how unions fit into the current business environment, and what role unions play in the modern economy.

 

Assignment 7. Read and discuss the text about unions:


Unions are organizations that negotiate with corporations, businesses and other organizations on behalf of union members. There are trade unions, which represent workers who do a particular type of job, and industrial unions, which represent workers in a particular industry.

 


Since the Industrial Revolution, unions have often been credited with securing improvements in working conditions and wages. Many unions were formed in manufacturing and resource companies, companies operating in steel mills, textile factories and mines. Over time, however, unions have spread into other industries. Unions are often associated with the "old economy": companies that operate in heavily regulated environments. Today, a large portion of membership is found in transportation, utilities and government.
The number of union members and the depth at which unions penetrate the economy varies from country to country. Some governments aggressively block or regulate a union's formation and others have focused their economies in industries where unions have not traditionally participated.

Industry deregulation, increased competition and labor mobility have made it more difficult for traditional unions to operate. In recent decades, unions have experienced limited growth due to a shift from "old economy" industries, which often involved manufacturing and large companies, to smaller and medium-sized companies outside of manufacturing. In the recent past, potential union members have spread into a larger set of companies. This makes collective bargaining a more complicated task, as union leaders must work with a larger set of managers and often have a harder time organizing employees.

The evolution of the modern worker has also changed the role of unions. The traditional focus of union leaders has been representing workers when negotiating with managers, but when developed economies shift away from a reliance on manufacturing, the line between manager and worker becomes blurred. In addition, automation, computers and increased worker productivity results in fewer workers being needed to do the same job.


The power of labor unions rests in their two main tools of influence: restricting labor supply and increasing labor demand. Some economists compare them to cartels. Through collective bargaining, unions negotiate the wages that employers will pay. Unions ask for a higher wage than the equilibrium wage (found at the intersect of the labor supply and labor demand curves), but this can lower the hours demanded by employers. Since a higher wage rate equates to less work per dollar, unions often face problems when negotiating higher wages and instead will often focus on increasing the demand for labor. Unions can use several different techniques to increase the demand for labor, and thus, wages. Unions can, and do, use the following techniques:

 

· Push for minimum wage increases. Minimum wage increases the labor costs for employers using low-skilled workers. This decreases the gap between the wage rate of low-skilled and high-skilled workers; high-skilled workers are more likely to be represented by a union. Increase the marginal productivity of its workers. This is often done through training.

· Support restrictions on imported goods through quotas and tariffs. This increases demand for domestic production and, therefore, domestic labor.

· Lobbying for stricter immigration rules. This limits growth in the labor supply, especially of low-skilled workers from abroad. Similar to the effect of increases in the minimum wage, a limitation in the supply of low-skilled workers pushes up their wages. This makes high-skilled laborers more attractive.


Unions have a unique legal position and in some sense, they operate like a monopoly as they are immune to antitrust laws. Because unions control, or can exert a good deal of influence on, the labor supply for a particular company or industry, unions can restrict non-union workers from depressing the wage rate. They are able to do this because legal guidelines provide a certain level of protection to union activities.

 


When unions want to increase union member wages or request other concessions from employers, they can do so through collective bargaining. Collective bargaining is a process in which workers (through a union) and employers meet to discuss the employment environment. Unions will present their argument for a particular issue, and employers must decide whether to concede to the workers' demands or to present counterarguments. The term "bargaining" may be misleading, as it brings to mind two people haggling at a flea market. In reality, the goal of the union in collective bargaining is to improve the status of the worker while still keeping the employer in business. The bargaining relationship is continuous, rather than just a one-time affair.

If unions are unable to negotiate, or are not satisfied with the outcomes of collective bargaining, they may initiate a work stoppage or strike. Threatening a strike can be as advantageous as actually striking, provided that the possibility of a strike is deemed feasible by employers. The effectiveness of an actual strike depends on whether the work stoppage can actually force employers to concede to demands. This is not always the case, as seen in 1984 when the National Union of Mineworkers, a trade union based in the United Kingdom, ordered a strike that, after a year, failed to result in concessions and was called off.


Whether unions positively or negatively affect the labor market depends on whom you ask. Unions say that they help increase the wage rate, improve working conditions and create incentives for employees to learn continued job training. Union wages were 21% percent higher than non-union wages as of 2002, though this figure varies according to industry.
Critics counter the unions' claims by pointing to changes in productivity and a competitive labor market as some of the primary reasons behind wage adjustments.

If the labor supply increases faster than labor demand, there will be a glut of available employees, which can depress wages (according to the law of supply and demand). Unions may be able to prevent employers from eliminating jobs through the threat of a walkout or strike, which will shut down production, but this technique does not necessarily work. Labor, like any other factor of production, is a cost that employers factor in when producing goods and services. If employers pay higher wages than their competitors, they will wind up with higher-priced products, which are less likely to be purchased by consumers.
Increases in union wages can come at the expense of non-unionized workers, who lack the same level of representation with management. Once a union is ratified by the government, it is considered a representative of the workers, regardless of whether all workers are actually part of the union. Additionally, as a condition of employment, unions are able to deduct union dues from employee paychecks without prior consent. Whether unions were a primary cause of a decline in labor demand by "old economy" industries is up for debate. While unions did force wage rates upward compared to non-union members, this did not necessarily force those industries to employ fewer workers. In the United States, "old economy" industries have declined for a number of years as the economy shifts away from heavy industries.


Unions have undoubtedly left their mark on the economy, and continue to be significant forces that shape the business and political environments. They exist in a wide variety of industries, from heavy manufacturing to the government, and assist workers in obtaining better wages and working conditions.

 

Now answer the following questions:




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