Building a Union Business
Unions Are Good for Business, Productivity and the Economy
According to Professor Harley Shaiken of the University of California-Berkeley, 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.
- Economic Growth
- Product or service delivery and quality
- Solvency of the firm
- Workplace health and safety
- Economic development
During the period 1945-1973, when a high percentage of workers had unions, wages kept pace with rising productivity, prosperity was widely shared, and economic growth was strong. Since 1973, union density and collective bargaining have declined, causing real wages to stagnate despite rising productivity. This decline in union density and bargaining contributed to the current financial crisis and severe recession, as unsustainable asset appreciation and easy credit too the place of wage increases most workers were not getting.
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.”
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.”
Product/ Service Delivery and Quality
According to Professors Michael Ash and Jean Ann Seago  heart attack recovery rates are higher in hospitals where nurses are unionized than in non-union hospitals. According to Professor Paul Clark, nurse unions improve patient care by raising staff-to-patient ratios, limiting excessive overtime, and improving nurse training.
Another study looked at the relationship between unionization and product quality in the auto industry. 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.”
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. 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.
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.’”
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. 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.”
The benefits of unions in terms of safer workplaces are hardly new. According to one most recent study, unions reduced fatalities in coal mining by an estimated 40 percent between 1897 and 1929.
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.”
(By Mark Gruenberg, PAI Staff Writer) Five construction union leaders, who have a combined 8,000 members working to build the Dakota Access Pipeline, are urging Democratic President Barack Obama to reverse agency rulings and let the oil pipeline project go ahead. Read more »
(Union Advocate) The AFL-CIO Housing Investment Trust treated the men and women working to redevelop a property in St. Paul’s Lowertown district to lunch Aug. 31, highlighting the trust’s unique approach to investing union pension funds in union-built construction projects. The development, 333 on the Park, is transforming an eight-story office building, originally constructed in 1913, into an apartment building with 134 market-rate units. Read more »
Statement by AFL-CIO President Richard Trumka regarding the Dakota Access Pipeline: The AFL-CIO supports pipeline construction as part of a comprehensive energy policy that creates jobs, makes the United States more competitive and addresses the threat of climate change. Pipelines are less costly, more reliable and less energy intensive than other forms of transporting fuels, and pipeline construction and maintenance provides quality jobs to tens of thousands of skilled workers. Read more »
(Michael Moore, Union Advocate) As the first trickle of mud oozed out of the concrete truck’s chute, 13 trainees dressed in hardhats, safety vests and tall rubber boots sprung into action, using shovels and trowels to distribute the concrete evenly across 13 rectangular slabs.
The July heat was pushing 90 degrees, and the trainees, participants in a unique pre-apprenticeship program co-sponsored by the Cement Masons and area tribal authorities, worked in silence, heads down, as their instructors barked orders and critiqued their work.
DFL-endorsed candidate for Congress in the 2nd Congressional District Angie Craig announced today that the Minnesota State Building and Construction Trades Council has endorsed her candidacy for Congress. Read more »
WorkdayMinnesota.org has completed a several months long study on wage theft in Minnesota. The problem is pervasive and widespread throughout the state in many types of work. Two of the studies focused on wage theft in non-union sectors of the building and construction trades. This article addresses partnerships between contractors and building trades unions using prevailing wage as a model. Read more »
Article by by Adam Belz at the StarTribune. The Federal Reserve Bank of Minneapolis has picked a union leader to join its board of directors. Harry Melander, president of the Minnesota Building and Construction Trades Council, was appointed as a new Class C member and will serve a three-year term. He will replace Pentair CEO Randy Hogan, who is retiring from the board. On Jan. 1, Melander will join MayKao Y. Read more »
A National Labor Relations Board (NLRB) administrative law judge virtually threw the book at a Grand Rapids, Minn., construction equipment firm for widespread labor law-breaking during a 2014 Boilermakers organizing drive.
Indeed, Terex’s violations were so bad that on June 11, Administrative Law Judge David Goldman ordered instant recognition and bargaining by the firm with the union, saying the union now represents the company’s undercarriage makers as well as its painters. Read more »