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Mgmt 583 Chapter 1: Introduction Fall 2008

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Page 1: Mgmt 583 Chapter 1: Introduction Fall 2008. Labor Relations  Labor Relations – a set of processes by which unions and management achieve their goals

Mgmt 583

Chapter 1: IntroductionFall 2008

Page 2: Mgmt 583 Chapter 1: Introduction Fall 2008. Labor Relations  Labor Relations – a set of processes by which unions and management achieve their goals

Labor Relations Labor Relations – a set of processes by

which unions and management achieve their goals while accommodating each other’s needs. a.k.a. Industrial Relations a.k.a. Labor-Management relations

The Labor Relations’ environment is heavy regulated.

Page 3: Mgmt 583 Chapter 1: Introduction Fall 2008. Labor Relations  Labor Relations – a set of processes by which unions and management achieve their goals

The Parties Employers/Management

Line management HR management

Unions Government

Page 4: Mgmt 583 Chapter 1: Introduction Fall 2008. Labor Relations  Labor Relations – a set of processes by which unions and management achieve their goals

What Unions Do Permit workers to collectively negotiate for pay and

working conditions. They allow members to exercise monopoly power

over their employers by controlling the supply of labor. Union monopoly power costs the GDP about 1.2% per

annum. It would cost more if unions were not in decline. In 2007, full-time wage and salary workers who were

union members had median usual weekly earnings of $863, compared with a median of $663 for wage and salary workers who were not represented by unions. [30.2% more]

Page 5: Mgmt 583 Chapter 1: Introduction Fall 2008. Labor Relations  Labor Relations – a set of processes by which unions and management achieve their goals

Trend in Union Membership 1935 13.2% 1945 35.5% 1955 33.2% 1965 28.4% 1975 25.5% 1985 18.0% 1995 14.5% 2007 12.1%

Page 6: Mgmt 583 Chapter 1: Introduction Fall 2008. Labor Relations  Labor Relations – a set of processes by which unions and management achieve their goals

Union Membership The unionization rate of private sector employees

was 7.5 % in 2007. Transportation 22.1%. Utilities 22.1%. Manufacturing industries 13.0%.

The unionization rate of government workers was 35.9% in 2007. Teachers had the highest unionization rate, at 37.2 %. Protection agencies (fire & police) at 35.2%.Source: U.S. Bureau of Labor Statistics (January 25, 2007). Union members in 2007. Union Members

Summary. http://www.bls.gov/news.release/union2.nr0.htm (accessed August 20, 2008).

Page 7: Mgmt 583 Chapter 1: Introduction Fall 2008. Labor Relations  Labor Relations – a set of processes by which unions and management achieve their goals

States with the Greatest Union Membership Four states with the highest union

membership rates in 2007: New York (25.2%). Alaska (23.8%). Hawaii (23.4%). Washington (20.2%).

Page 8: Mgmt 583 Chapter 1: Introduction Fall 2008. Labor Relations  Labor Relations – a set of processes by which unions and management achieve their goals

States with the Lowest Union Membership The four states with the lowest union

membership rates in 2007: North Carolina 3.0% Virginia 3.7% South Carolina 4.1% Georgia 4.4% Mississippi 6.7%

Page 9: Mgmt 583 Chapter 1: Introduction Fall 2008. Labor Relations  Labor Relations – a set of processes by which unions and management achieve their goals

BLS Union Members Summary Workers in the public sector had a union

membership rate nearly five times that of private sector employees.

Education, training, and library occupations had the highest unionization rate among all occupations, at 37 percent.

The unionization rate was higher for men than for women.

Black workers were more likely to be union members than were white, Asian, or Hispanic workers.

Page 10: Mgmt 583 Chapter 1: Introduction Fall 2008. Labor Relations  Labor Relations – a set of processes by which unions and management achieve their goals

Demographics of Union Membership Union membership rates were higher among

men at 13.0%, than for women at 10.9%. Workers ages 45 to 54 were more likely to

be unionized than either their younger or older counterparts (16.0%).

Workers in the age category 16 to 24 were the least likely to be union members (4.4%).

Page 11: Mgmt 583 Chapter 1: Introduction Fall 2008. Labor Relations  Labor Relations – a set of processes by which unions and management achieve their goals

Demographics of Union Membership Blacks were more likely to be union

members (14.5 percent) than were whites (11.7 percent), Asians (10.4 percent), or Hispanics or Latinos (9.8 percent).

Full-time wage and salary workers who were union members had median usual weekly earnings of $833, compared with a median of $642 for wage and salary workers who were not represented by unions.

Source: BLS Union Members Summary 2008

Page 12: Mgmt 583 Chapter 1: Introduction Fall 2008. Labor Relations  Labor Relations – a set of processes by which unions and management achieve their goals

Largest Labor Unions Union members with >1M members:

National Education Association (NEA) 2.7M Service Employees International Union (SEIU)

1.46M United Food & Commercial Workers International

Union (UFCW) 1.38M International Brotherhood of Teamsters (IBT)

1.35M American Federation of State, County & Municipal

Employees (AFSCME) 1.35M

Source: Labor Research Association http://www.laborresearch.org

Page 13: Mgmt 583 Chapter 1: Introduction Fall 2008. Labor Relations  Labor Relations – a set of processes by which unions and management achieve their goals

Willingness to Vote for a Union Attitude of local community toward unions.

Favorable v. unfavorable. Mississippi v. Michigan.

Peer pressure Belief that union will be successful

Grievance handling Bargaining demands

Page 14: Mgmt 583 Chapter 1: Introduction Fall 2008. Labor Relations  Labor Relations – a set of processes by which unions and management achieve their goals

Collective Behavior Collective Behavior – usually results from

coming together to counter a mutual threat. Dependent on: Group Cohesiveness Class consciousness External threat

Page 15: Mgmt 583 Chapter 1: Introduction Fall 2008. Labor Relations  Labor Relations – a set of processes by which unions and management achieve their goals

Factors Affecting Cohesiveness Greater agreement on group goals, greater

the cohesiveness. Greater the similarity of members (i.e.,

skills, opinions, attitudes, interests, background, etc.), the greater the cohesiveness.

The more frequent the contact among group members, the more cohesive.

The smaller the group the more cohesive.

Page 16: Mgmt 583 Chapter 1: Introduction Fall 2008. Labor Relations  Labor Relations – a set of processes by which unions and management achieve their goals

Factors Affecting Cohesiveness The more isolated the group, the more

cohesive. Physical barriers. This forces proximity and interaction.

The more intergroup competition the more cohesive.

The greater the groups success in achieving group goals the more cohesive.

A real or perceived threat increases cohesiveness.

Page 17: Mgmt 583 Chapter 1: Introduction Fall 2008. Labor Relations  Labor Relations – a set of processes by which unions and management achieve their goals

Why Employees Organize

Dissatisfaction a necessary but not sufficient cause for successful organizing campaign. Working conditions Wages and benefits Supervisory practices Promotion/advancement policies Job security

Page 18: Mgmt 583 Chapter 1: Introduction Fall 2008. Labor Relations  Labor Relations – a set of processes by which unions and management achieve their goals

Formula for Employees Organizing Successfully

Dissatisfaction is present and they believe that they are individually unable to change the conditions causing their dissatisfaction.

A majority of the employees must believe that collective bargaining (i.e., a union) will improve the situation.

This implies that the benefit from improving conditions out weighs the cost of union dues.

Page 19: Mgmt 583 Chapter 1: Introduction Fall 2008. Labor Relations  Labor Relations – a set of processes by which unions and management achieve their goals

Craft Unions Union membership is limited to members of a

specific craft (example: IBEW, UBCJA). One craft, one union. Exercise economic power by controlling the

supply of the craft. Control apprenticeship. Trace history to the guilds of the Middle

Ages.

Page 20: Mgmt 583 Chapter 1: Introduction Fall 2008. Labor Relations  Labor Relations – a set of processes by which unions and management achieve their goals

Industrial Unions Union membership open to employees of a

specific industry (example: UAW, USW). One industry, one union. Exercises economic power only by political

fiat. In recent years, industry designations have

become meaningless.

Page 21: Mgmt 583 Chapter 1: Introduction Fall 2008. Labor Relations  Labor Relations – a set of processes by which unions and management achieve their goals

Trends in the Labor Movement Greater female participation in the workforce. Greater ethnic minority participation in the

workforce. Fewer skills (LIUNA and Hispanic janitors in L.A .). Lack of mathematical and scientific skills. Lower educational achievement. Multilingual workplaces. Immigration concerns.

Interestingly, unions used to be radically opposed to immigration, now they are supportive.

Page 22: Mgmt 583 Chapter 1: Introduction Fall 2008. Labor Relations  Labor Relations – a set of processes by which unions and management achieve their goals

Trends in the Labor Movement

More organizing efforts among professional and white-collar employees. Unions have problem with blue-collar image. Job security offers an incentive for workers to

organize. Emerging two-tiered economic system based on

education. Roughly 20% of the working population has four years

of college. Unions have to deal with a new underclass of workers

who lack the skills to be successful employees.

Page 23: Mgmt 583 Chapter 1: Introduction Fall 2008. Labor Relations  Labor Relations – a set of processes by which unions and management achieve their goals

Why Unions Have Declined

Wages are more often determined by the market-driven economy than collective bargaining. Competitive pressures on employers. Particularly global competition.

Employers control job content. Employers have been involved with the U.S.

Education system which (in theory) develops skills for future employees This ignores the effects of gov’t and the NEA on public

education.

Page 24: Mgmt 583 Chapter 1: Introduction Fall 2008. Labor Relations  Labor Relations – a set of processes by which unions and management achieve their goals

Why Unions Have Declined Governments now provide many worker

protections once offered only in CBAs. OSHA FLSA Title VII ERISA

The large American middle class is largely anti-union View unions as contrary to efficiency and productivity Opposition to income redistribution, which unions

support. Though unions see them as a possible target for

organization efforts.

Page 25: Mgmt 583 Chapter 1: Introduction Fall 2008. Labor Relations  Labor Relations – a set of processes by which unions and management achieve their goals

Why Unions Have Declined Private sector employers have taken

proactive steps to avoid organization. Competitive wages & benefits Participative leadership styles.

More companies are using employee empowerment programs. TQM CQI