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Unions Are Good for Business, Productivity and the Economy

Unions create a more stable, productive workforce—where workers have a say in improving their jobs. Statistics bear this out. 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. 

There is a substantial amount of academic literature backing Shaiken on the following benefits of unions and unionization to employers and the economy:

  • Strong Middle Class Linked to Strong Unions
  • Productivity
  • Product or service delivery and quality
  • Training
  • Turnover
  • Solvency of the firm
  • Workplace health and safety
  • Economic development
Economic Growth

Between 1945 and 1973, when a high percentage of workers were in unions, wages kept pace with rising productivity, prosperity was widely shared and economic growth—and America’s middle class—was strong. Since 1973, the number of of people in unions have declined, causing real wages to stagnate, even though workers’ productivity has steadily risen. [2]

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.”[3]


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.”[4]

Professors Michael Ash and Jean Ann Seago [5]say heart attack recovery rates are higher in hospitals where nurses are in unions than in hospitals without unions.  According to Professor Paul Clark, nurses, through their unions, improve patient care by negotiating contracts that raise staff-to-patient ratios, limit excessive overtime and improving nurse training. [6]

 
Training

Several studies in have found a positive link between unionization and the amount and quality of workforce training. Unionized workplaces are more likely to offer formal training[8]and this is especially true for small firms. Workers, through their unions, often negotiate contracts that include training, and unions often hold their own training.

Turnover

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.[9] 

Solvency

Academic research refutes the claim that  unions are detrimental to business. According to Professors Richard Freeman and Morris Kleiner, unionism has a statistically insignificant effect (meaning no effect) on a firm’s solvency[10]  Freeman and Kleiner conclude that “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

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. [11]


Economic Development

Unions 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.”[13]



[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] Dean Baker, "The Recession and the Freedom to Organize," AFL-CIO Point of View, Feb. 2008

[3] 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:

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

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

[5]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.

[6] Paul Clark and Darlene Clark, "Collective Bargaining in American Hospitals: The Response of Nurse Unions to the Crisis in American Health Care, " LERA, Jan 2009.

[7] 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).

[8] 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.

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

[10] 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.

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

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

[12] William M. Boal, "The Effect of Unionism on Accidents in US Coal Mining," 1897-1929, 'Industrial Relations,' Vol. 48, No. 1 (Jan. 2009)

[13] 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).

 

 
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