Unions: What Are They Good For?

Unions: What Are They Good For?


In pre-pandemic January 2020, the Hoover Institution declared the “The Decline Of Unions Is Good News,” citing Department of Labor statistics that unionized workers in the private sector had fallen to 6.2% in 2019, down from 20% in 1983 and 35% in 1975.

Much was made about how unionized companies are unable to compete on a cost basis with non-unionized peers that can move operations overseas or increase automation on the shop floor. We’ve heard that collective representation is a product of yesteryear, with most blue-collar jobs requiring a higher skill level, or, alternatively, that the jobs of the future were strictly creative, white-collar tech roles.

As Covid-19 swept through the globe soon after, the so-called “dying” blue-collar jobs—the Walmart stockers fulfilling online deliveries, the Amazon warehouse stockers, and the Tyson Foods meatpackers—were suddenly gravely essential.

Health and safety concerns swelled, and public support for unions hit 65% as horror stories hit the presses. Issues like lack of PPE, serious injuries, hazard pay and even changes to company harassment policies drove many workers—blue and white-collar alike—to start organizing.

Small business leaders shudder at the thought of their employees unionizing. However, Rutgers School of Management and Labor Relations professor Dr. Paula B. Voos told the Senate in 2009: “Interestingly, rates of union representation in small employers are currently lower than those in larger organizations, even though unions are in fact more likely to win representation elections in small than in large units.”

One reason is that small employers often have a different employment atmosphere than larger bureaucratic companies. With fewer layers and silos, employees are more likely to get their grievances heard by management with less likelihood of miscommunication.

The Union Organizing Process

But what if your employees do decide to unionize? Waging an all-out war against Amazon required hefty resources, increased instances of absenteeism, and high turnover as tempers escalated. Not to mention the risk of running afoul of the National Labor Relations Act.

The organizing process starts when an employee has grievances they feel have not been adequately addressed, be that pay disparities, unsafe working conditions, or extended hours. If that employee finds co-workers who share a common interest, they can then talk to a union organizer—typically a local chapter of one of the major trade or industry unions—about strategizing.

These employees then form a committee and develop a list of demands or issues they would like to see addressed or improved. The committee will then solicit more employees to back their union.

Once at least 30% of employees show support for these demands, the union is eligible for an election and can submit a petition to the National Labor Relations Board (NLRB). Once the NLRB deems the union legitimate, it will facilitate an agreement between union members and the employer to set an election. A union is certified if it wins a majority of votes cast.

Once a union is certified, the hard part starts. Both parties come to the negotiating table to hash out a contract. This may also take months—if not years—to meet in the middle.

A Balanced Approach

The recent Amazon union election vote in Alabama was not the first (or last) organizing effort of its kind. Although unsuccessful, a recent ruling that Amazon’s anti-union efforts were overzealous may mean a revote in the future.

Despite public support for unions, the process of organizing a union itself often takes months, years for larger companies, hence the low percentage of unionized workers. Small and mid-sized businesses don’t have the luxury of cost or time to crush unions the way Amazon did. And even then, too much stick and no carrot could just result in a do-over and negate all union-busting efforts.

Too much carrot is equally bad. American Airlines president and COO Gerard Arpey took over in 2003 after his predecessor arranged massive bonuses for top executives while threatening bankruptcy with the unions. Arpey took over with a cloud of mistrust and went out of his way to appease the unions.

He took a strong no-bankruptcy stance and staved off bankruptcy for eight years before finally retiring when the airline caved in 2011, after continuous losses. Although he was at first lauded by unions, by the time American finally filed for Chapter 11, its competitors who had filed years prior had rebounded and started making profits again. Arpey only delayed the inevitable.

Former Chrysler chairman and CEO Lee Iacocca too threatened bankruptcy in 1980, but he also—rare for the time—added a union representative to the Chrysler board. With United Automobile Workers (UAW) president Douglas Fraser having a seat at the table, Iacocca soon convinced the unions to give up concessions and accept lower wages. The strong relationship later bore fruit for UAW when Chrysler rebounded, as Iacocca preserved Detroit plants and set up profit-sharing for employees.

Collaboration Across The Board

Unions are not inherently combative, and just like corporations, they find value in building society and uplifting the communities they operate in.

AFL-CIO executive vice president Tefere Gebre said: “If the labor movement is going to prosper...we have to invest in a real partnership with our communities.”

While Iacocca’s step to give a union representative a board seat may be a step too far for many CEOs, unions and employers can slowly move from adversaries to allies. Multiple employers, both small and large have found that collaborating with union representatives in training, innovation, charity events, and employee behavioral issues eventually lead to less combative sessions at the negotiating table.

It is important that this starts even before the union election. Once your employees start campaigning, it is important that you make it clear that the door remains open. If you do decide to discourage them from organizing, opt for pro-company messaging rather than an anti-union approach.

Otherwise, if the union is certified, you would then be starting off on the wrong foot and bringing that adversarial tone to the contract talks all while workplace dynamics deteriorate. Union or no, employee relations are key to business continuity.

In the words of another auto magnate, Henry Ford: “Coming together is the beginning. Keeping together is progress. Working together is success.”

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