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Ashley Levins

Todd Gunsher

AP Seminar

13 October 2016

The Social and Financial Impacts of Labor Unions

The entire structure of labor unions was built off of and continuously relies on people, but

what if that structure begins to crumble and rust? ​In the past, workers formed groups called craft

unions. The unions gathered employees or skilled workers with the same skills, then formed

protests against employers and other types of workers. These craft unions would make demands

for their needs, and if the employers or workers refused, the unions would prove their strength in

protests and rebellions. The craft unions eventually died out, according to Gerald Friedman, a

professor at the University of Massachusetts at Amherst, but they were immediately replaced

with labor unions (Friedman). ​Unions were created in favor of workers’ welfare, but an ongoing

debate struggles to conclude whether or not their once noble purpose has faded into ignoble

misuse. Zooming in on this debate, a focal point of issue could possibly be found in the social

and financial relationships between employers and employees, union members and

non-members, and working families. So, have labor unions outlived their usefulness, or are they

still fruitful?

During the Great Depression, unions lost the majority of their strength and numbers, but

according to Friedman, during the economic rise in the post-depression stages, unions increased

by 76% from what was originally only a few thousand. This occurred, not just in America, but

also in 10 different countries (Friedman). During the return of economic stability, unions
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provided financial welfare to families who needed help getting back on their feet. When World

War II came along, financial pay increased by 86.7%, creating a financial boom for American

families and eliminating unemployment for the war effort (Friedman). This helped large

businesses emerge, and the average American family became more stable, providing for larger

families with ease. ​Once unions became larger in numbers, they continuously gained members

en masse. Now, numbers don’t rise as steeply “​because social upheaval provokes a hostile

reaction” (Friedman). To explain, whenever labor unions start to grow too rapidly for comfort,

employers take action against the unions. The employers begin to support each other during

strikes and demands, and they start demanding for the government to take action. This makes the

work environment very tense between the workers and employers; not a very healthy situation

for manufacturers.

Even so, Morgan Reynolds, a member of the Economic Policy Institute, explains how

unions are “immune to taxation and antitrust laws,” making it possible for them to bargain or

demand higher wages (Reynolds). Also, unions can force their companies to open up their land

for union use, mandating employers to share space and privileges with union members. That is,

according to Reynold’s report, where employers tend to demand government action against

unions, causing unions members to strike for further freedoms.

Chil Sun Choi, a professor at Dong-A University, says that in Korea, labor unions in

manufacturing firms are charged debts by their companies (Choi). In response the labor unions

demand more capital than is needed to pay their debts. Due to this, for example, in 2012 the

Hyundai motor company lost around 8 million USD per day to the union strikes (Choi). This

doesn’t just happen in Asia; American companies also struggle to keep up with the demands of
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labor unions. Morgan Reynolds mentions that along with immunity and access to privileges,

“​union officials can force compulsory union dues from employees—members and nonmembers

alike—as a condition for keeping their jobs” (Reynolds). Even though non-members can be

forced to pay union dues, they still do not receive all of the wage raises, better health care plans,

or some other wins that members receive.

To help non-members keep their jobs without harsh pressure from unions, states began

to pass r​ight-to-work laws, which have been reported in twenty-six US states. These laws

prohibit labor unions from requiring employees to become members (Murphy). Even though the

laws allow for non-member workers to keep their freedom of choice, they also allow for some

workers to be “free-riders.” According to Katie Murphy, these “free-riders” are workers who

follow the unions for benefits, but don’t pay to be members. They get the money and benefits of

unions without actually taking part in strikes or effort toward union demands; as a result of the

right-to-work laws, non-members are not compelled to pay dues anymore, but now they have a

loophole. This loophole allows non-members to receive benefits without paying union dues

(Murphy). Right-to-work laws have caused heavy debates on whether they reverse the alleged

misuses; now non-members can take advantage of members. In his article “How Unions Help

All Workers” Matthew Walters, however, argues that union members still mostly receive more

benefits than non-members, even with the right-to-work laws. According to Walters, who is a

member of the Economic Policy Institute, unions raise compensation (wage and benefits) by

28%. Yet, union members are 18% to 28% more likely to have employer paid health insurance

than non-members, and members receive 26% more vacation time than non-members (Walters).

Union efforts result in many benefits for members, and a few for non-members, yet some still
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debate whether unions have a place in the labor environment or not. It is possible that unions

deserve their benefits, but it could also be that unions are abusing their power.

Even still, non-union employees and employers alike work for their raises and privileges

by means of keeping loyalty to and supporting the company, rather than protest against it.

Though non-union workers stay loyal to their employers, research shows that union members

tend to have more satisfactory work lives. Patrick Flavin, a member of the Department of

Political Science, and his team of researchers ​conducted a study where they surveyed union and

non-union individuals (Flavin). The survey asked the respondents to rate their “satisfaction of

life” on a scale from 1-10. The survey results reached a plateau. Data showed that union

members were more satisfied at work, at home, and at the bank (Flavin). Also, according to

Katie Murphy’s “Fact Sheet: The Value of Unions and the Consequences of Right-to-Work

Laws,” the Center For American Progress Action Fund implemented a study, in which they

found that unionization increased employment and education of workers by 10%. They also

raised the average annual income, unionized or not, by $1,501 (Murphy). Additionally, Murphy

states that unions have helped increase safety regulations, for example, the requirements of

multiple exits put in after the Triangle Shirtwaist Fire in 1911. Not only have unions become

more satisfied, but they have increased work environments and income amounts, creating a safer

and more desirable environment for most workers.

In conclusion, labor unions have caused conflicts between labor and management in the

past and present, but they have also increased satisfaction of the quality of life for struggling

workers. They have provided opportunities for improvements, yet the debate still stands on

whether or not the unions have maintained alignment with their original purpose: to make
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regulations and income necessary for life. A report on CNN written by Donna Brazile, the Chair

of the Democratic National Committee, concludes that in the past and present, labor unions have

“​played a major role in ending the sweatshops and child labor” around the world, and have been

at the “forefront of reforming working conditions and pushing for comprehensive safety and

workers' compensation laws” (Brazile). The improvements made by unions have played out, but

there is a fine line between fighting for a cause and abusing the power that could be used to

greatly benefit the common worker. And herein lies the hindrance: unions could in-fact be

disrupting the working environment, but ridding the country of them could cause a financial

downfall for some workers.

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Works Cited

Brazile, Donna. "What Have Unions Done for Us?" ​CNN​. Cable News Network, 4 Sept. 2012.

Web. 23 Sept. 2016

Choi, Chil Sun, Pando Sohn, and Ji-Yong Seo. "Relationship between Leverage and the

Bargaining Power of Labor Unions: Evidence from Theoretical and Empirical

Perspectives." ​Estudios De Economía Estudios De Economía 4​ 3.1 (2016): 53-69. Web.

21 Sept. 2016.

Flavin, P., and G. Shufeldt. "Labor Union Membership and Life Satisfaction in the United

States." ​Labor Studies Journal​ 41.2 (2016): 171-84. ​Academic Search Complete

[EBSCO].​ Web. 21 Sept. 2016.

Friedman, Gerald. "Labor Unions in the United States." ​EHnet.​ EH.net Encyclopedia, 16 Mar.

2008. Web. 23 Sept. 2016.

Murphy, Katie. "Fact Sheet: The Value of Unions and the Consequences of 'Right-to-Work'

Laws." ​Center for American Progress​. Center for American Progress, 13 Dec. 2012.

Web. 24 Sept. 2016.

Reynolds, Morgan O. "Labor Unions." ​The Concise Encyclopedia of Economics.​ Library of

Economics and Liberty, 2008. Web. 24 Sept. 2016.

Walters, Matthew. "How Unions Help All Workers." ​Economic Policy Institute.​ Economic

Policy

Institute, 26 Aug. 2003. Web. 27 Sept. 2016.