Unions - What good are they?

Unions play a role in the business world. WHY? Because the business world is interested in providing "a return" to it's stockholders. The stockholders put up money and expect a return. When someone puts up money, they have choices of where to "invest that money." So it stands to reason that anyone investing wants to get the best return on their money.

That flies right in the face of providing the best salaries and benefits for the people that do the work in a company.

There is a 'built-in' conflict. If the investors did not want to get a return - if the company did not want to make a profit - If the management did not want to earn a living - than and only then could all the workers in most companies get paid more. The workers want to be paid - Yes they do. And they deserve to be paid.

Now comes the union - whose job it is to negotiate on behalf of the workers to help the workers get more money while the management - every mindful of the need to keep the investors happy - try to get the most productivity out of the workforce. In almost most cases, a corporation will try to keep wages as low as possible. And in most cases, a union will try to get the most wages for its members.

If this was all that happened, then the process would be clean and agreements could be reached easily. However, in the real world, there are many complications. If the profits drop because the wages increase, then the dividend paid to the investors could drop or the stock value could drop. This would cause the investors to sell their investment in that company and then the company's stock value would eventually fall to levels that would cause harm or worse to the company. If the stock levels dropped too much, then that company could become a "takeover" business. That would mean many people would loss their jobs or the company could go out of bankrupt.

Or if the company could not sell its product in the competitive markets, then that company could go out of business; again with the loss of many jobs.

So the wages a company pays has a "balance" factor in the profit & longevity of a company.

Now consider the salaries of the management team. Usually they are much higher than any of the wage earners on the assumption that it's their knowledge and business acumen that makes the company profitable and therefore provides jobs for wage earners. And that can be demonstrated both positively and negatively. Then we have to consider that the management personal have choices of where to work. They can go to a better job with more wages just like a sports figure moves from one team to another team. In order to keep the best "talent" of management, higher and higher salaries have to be paid with terrific benefits, bonuses and parachutes clauses.

This puts the union in a tough place to negotiate. Many times the union will push too much and the wage earners will go out on strike. This is a lose- lose scenario. The workers lose earnings. The company loses sales and possible customers which they will never get back.

The reason for a union was supposed to get better wages for workers at a company. BUT Today, the role the union takes on is more political than negotiator for higher wages and benefits. Many of the union workers have reached a middle class status with a salary or hourly wage to be able to provide for their families.

But with a world-wide marketplace and manufacturing shifting to the lowest wage countries, the American unions are faced with deep declines in membership and that means a huge drop in union dues. AAHHH the union dues. That is what the union is now about in most unions. With lower memberships, the unions have less to spend on their politicians. And those beautiful buildings the unions built have mortgages to be paid and the union management has to be competitively paid or management will get another job. Faced with less memberships union dues has to go up. And if dues goes up, the workers then begin to think like investors and want more for the increased dues they are paying.

We have reached an apex in union effectiveness. In my opinion, it would have been idealistic and hopefully achievable to have managements and workers come to an agreement that management could be paid LESS and workers could be paid more. The stock prices would not be effected therefore the investors would be happy. AND with more workers earning more money, consumerism would help fuel the economy. That would be a win-win scenario.

It would be easy for workers to deal with a raise in their earnings. BUT getting management to give up their huge and mostly unwarranted salaries and perks is the tough factor to get in place. After all, who would ever want to make less - workers or management alike. And that's the rub that requires unions to force management to increase pay and benefits for workers.

Why unions? Because they are somewhat of an equalizer; even though they are not always doing what is in the best interests of their members. It's the need for workers to have a voice that causes unions to be.

And that's the way I see it...
Straight Talk With Jay Clifford