Unions Are Good for Business, Productivity and the Economy

With a note From Bob Daraio

I was recently asked by a visiting Tribune executive, what the union does for me.

I thought I'd respond here. I'm an IBEW Local 1212 represented video engineer at WPIX, a Tribune owned TV station in New York.

Even though we are the lowest paid union engineers in NYC, with Fox5 and MY9 both paying 25% higher wages, with other stations having even greater disparity in wages, even though our freelancers have not had a raise in at least seven (7) years and get no pension and welfare contribution, even though the severance package is better for the non-union employees and they get more vacation days, we still make substantially more money than the non-union workers at WPIX. Also, the grievance and arbitration rules in our union contract give us some small protection from management abuse that our non-represented colleagues do not have.

As to what advantages the employer gets from having a union, an AFL/CIO article posted below says it all:

From: http://www.aflcio.org/joinaunion/why/uniondifference/uniondiff8.cfm

According to Professor Harley Shaiken of the University of California-Berkeley,[1] unions are associated with higher productivity, lower employee turnover, improved workplace communication, and a better-trained workforce.

Prof. Shaiken is not alone. There is a substantial amount of academic literature on the following benefits of unions and unionization to employers and the economy:

• Productivity
• Competitiveness
• Product or service delivery and quality
• Training
• Turnover
• Solvency of the firm
• Workplace health and safety
• Economic development
• 
  

Productivity

According to a recent survey of 73 independent studies on unions and productivity: “The available evidence points to a positive and statistically significant association between unions and productivity in the U.S. manufacturing and education sectors, of around 10 and 7 percent, respectively.”[2]

Some scholars have found an even larger positive relationship between unions and productivity. According to Brown and Medoff, “unionized establishments are about 22 percent more productive than those that are not.”[3]

Product/ Service Delivery and Quality

According to Professors Michael Ash and Jean Ann Seago,[4] heart attack recovery rates are higher in hospitals where nurses are unionized than in non-union hospitals.

Another study looked at the relationship between unionization and product quality in the auto industry.[5] According to a summary of this study prepared by American Rights at Work:

“The author examines the system of co-management created through the General Motors-United Auto Workers partnership at the Saturn Corporation…The author credits the union with building a dense communications network throughout Saturn's management system. Compared to non-represented advisors, union advisors showed greater levels of lateral communication and coordination, which had a significant positive impact on quality performance.”

Training

Several studies in have found a positive association between unionization and the amount and quality of workforce training. Unionized establishments are more likely to offer formal training.[6] This is especially true for small firms. There are a number of reasons for this: less turnover among union workers, making the employer more likely to offer training; collective bargaining agreements that require employers to provide training; and finally, unions often conduct their own training.

Turnover

Professor Shaiken also finds that unions reduce turnover. He cites Freeman and Medoff’s finding that “about one fifth of the union productivity effect stemmed from lower worker turnover. Unions improve communication channels giving workers the ability to improve their conditions short of ‘exiting.’”[7]

Solvency

Labor’s enemies assert that unions drive employers out of business, but academic research refutes this claim. According to Professors Richard Freeman and Morris Kleiner, unionism has a statistically insignificant effect (meaning no effect) on firm solvency.[8] Freeman and Kleiner conclude “unions do not, on average, drive firms or business lines out of business or produce high displacement rates for unionized workers.”

Workplace Health and Safety

Employers should be concerned about workplace health and safety as a matter of enlightened self-interest. According to an American Rights at Work summary of a study by John E. Baugher and J. Timmons Roberts:

“Only one factor effectively moves workers who are in subordinate positions to actively cope with hazards: membership in an independent labor union. These findings suggest that union growth could indirectly reduce job stress by giving workers the voice to cope effectively with job hazards.”[9]

Economic Development

Unions also play a positive role in economic development. One good example is the Wisconsin Regional Training Partnership, “an association of 125 employers and unions dedicated to family-supporting jobs in a competitive business environment. WRTP members have stabilized manufacturing employment in the Milwaukee metro area, and contributed about 6,000 additional industrial jobs to it over the past five years. Among member firms, productivity is way up--exceeding productivity growth in nonmember firms.”[10]

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[1] Harley Shaiken, The High Road to a Competitive Economy: A Labor Law Strategy, Center for American Progress, June 25, 2004, pp. 7-8. http://www.americanprogress.org/atf/cf/%7BE9245FE4-9A2B-43C7-A521-5D6FF2E06E03%7D/unionpaper.pdf

[2] Christos Doucouliagos and Patrice Laroche, “The Impact of U.S. Unions on Producivity: A Bootstrap Meta-analysis,” Proceedings of the Industrial Relations Research Association, 2004. See also, by the same authors, “What Do Unions Do to Productivity: A Meta-analysis,” Industrial Relations, Volume 42 Issue 4 October 2003:

[3] Charles Brown and James L. Medoff, “Trade Unions in the Production Process.” Journal of Political

Economy, vol. 86, no. 3 (June 1978): 355–378.

[4] Michael Ash and Jean Ann Seago, “The effect of registered nurses' unions on heart-attack mortality,” Industrial and Labor Relations Review, Vol. 57, No. 3 (Apr. 2004), pp. 422-442.

[5] Saul A. Rubinstein, “The Impact of Co-Management on Quality Performance: The Case of the Saturn Corporation.” Industrial and Labor Relations Review, Vol. 53, No. 197 (January 2000).

[6] Harley J. Frazis, Diane E. Herz and Michael W. Horrigan, “Employer-Provided Training: Results from a New Survey.” Monthly Labor Review (May 1995): 3–17.

[7] Harley Shaiken, cited earlier, quoting Richard Freeman and James Medoff, What Do Unions Do? New York, Basic Books, 1984.

[8] Richard B. Freeman and Morris M. Kleiner, “Do Unions Make Enterprises Insolvent?” Industrial and Labor Relations Review, vol. 52, no. 4 (July 1999): 510–527.

[9] John E. Baugher and J. Timmons Roberts, “Workplace Hazards, Unions and Coping Styles.” Labor

Studies Journal, Vol. 29, No. 2 (Summer 2004).

[10] Annette Bernhardt, Laura Dresser, and Joel Rogers, “Taking the High Road in Milwaukee: The Wisconsin Regional Training Partnership.” Working USA, Vol. 5, Issue 3 (January 31, 2002).