UNDERSTANDING LABOUR UNIONS! In some labor markets, workers have joined together and formed a labor union, eg BOFEPUSU,BOSETU,BOPEU etc. By bargaining collectively with the employers, unions seek to exercise their market power and demand higher wages, better working conditions, or other benefits. Based on the Bureau of Labor Statistics data, while wages and salaries are slightly higher for union workers, benefits are significantly greater for union workers. Unions may seek to increase the wages of their members either by increasing the demand for labor or decreasing the supply of labor. To increase the demand for labor, unions may pursue a variety of activities. 1. Unions may seek to increase the price of alternative resources, such as lobbying to increase the minimum wage for nonunion workers or restrict the use of capital, which is a substitute to union labor. In 2002, the International Longshore and Warehouse Union (ILWU) shut down 29 west coast ports in part to protest and limit the adoption of technology for loading and unloading. Although it would increase the productivity of workers using the loading and unloading technology, the substitution to more capital, would have reduced the number of workers needed. Watch: pbs.org/newshour/bb/economy/july-dec02/ports_10-03.html 2. Unions may increase the productivity of workers through training or apprenticeship programs. As productivity increases, the marginal revenue product would rise increasing the demand for the labor. 3. Unions may pay for product advertisement to increase the demand for product and thus the demand for labor. 4. Last, unions may pursue political activities that increase the demand for the labor such as a requirement to employ only union workers on certain projects. Alternatively, unions seek to restrict the supply of labor to increase wages by lobbying for laws that restrict that age a person is eligible to work or the number of hours they are allowed to work. For example, the “law says that pilots who work for an airline cannot fly more than 100 hours a month or more than 1,000 hours a year” (bls.gov/k12/science03.htm). Air traffic controllers have a mandatory retirement age of 56 (bls.gov/oco/ocos108.htm). Other laws such as licensing requirements restricts the number of entrants in a particular occupation, such as electricians or plumbers. In the early twentieth century, some unions restricted the supply of labor in their crafts by prohibiting African Americans from becoming union members or requiring a literacy test to reduce the number of individuals qualified to join the union. Reference: econlib.org/library/Enc/LaborUnions.html wsws.org/articles/2002/oct2002/ilwu-o10.shtml
Posted on: Tue, 28 Jan 2014 13:21:11 +0000
Trending Topics
Recently Viewed Topics
© 2015