5 Critical Pros and Cons of Labor Unions

5 Critical Pros and Cons of Labor Unions

by / Comments Off / 4170 View / Jan 13, 2015

You have probably heard of labor unions before, but are you completely aware of what they are designed to offer employees and employers? Due to the steadily growing industrial development in the 19th century, many employers gained profits by taking advantage of employees that did not have any power or control. Many uneducated and unknowing country dwellers migrated to the city during this time period and worked for wages that were well below standards.

This led to the invention of labor unions that started in the United Kingdom. They were originally designed to be a way for workers to band together and finally obtain some equity for themselves. At the time, these workers realized that all they had to bargain with was their actual labor. This resulted in them banding together to withdraw labor in the form of a strike until their demands were met.

Spread of Labor Unions

Even though these labor unions originally started in the United Kingdom, they quickly started to spread. It did not take long for the labor movement to finally makes its way to different parts of the world over a few decades. Labor unions were designed to bring about change and allow employees to unite and leverage their power against employers that were taking advantage. Labor unions are a sort of change mechanism and have often been viewed from a political point of view.

Is It All Good or All Bad?

The only way to formulate an unbiased opinion of labor unions is to compare the pros against the cons. Not everything involving these types of unions is positive and not everything is negative. Both employers and employees are put into different situations with the forming of a labor union. If you want to gain a better understanding, you must breakdown the pros and the cons.

Advantages of Labor Unions

Higher Wages
One of the main reasons that labor unions were formed was to help workers finally gain the type of pay that they deserve. Higher wages are possible with labor unions, because there is a contract that must be maintained. A worker going to an employer and asking for a raise on their own is not likely to have much success. However, if you have a union backing your demand it is much likelier to be taken seriously and considered. Labor unions have a higher likelihood of success because they unite the entire workforce together and get a sort of leverage to use for their benefit. Getting workers higher wages is just one pro from labor unions.

United Workforce
A labor union is designed to keep the workforce united and strive to get them the type of working conditions and benefits that are needed. Not only are higher wages expected, but also proper punishment guidelines and an overall fair treatment in the workplace. Having a labor union to keep the workforce united can be a huge benefit to employees.

Disadvantages of Labor Unions

Unrealistic Wages Levels
Although one benefit of labor unions is that workers can finally get access to higher wages, this can also be a negative. In many cases, labor unions can raise wages to unrealistically high levels that employers can’t afford to pay. This cuts into profit margins and can have devastating effects on the business. When wages rise to levels that are way above actual market value. This leads to rising costs for consumers and can be a devastating cycle. Since the increased cost is passed through the distribution chain, it does trickle down to workers eventually.

Another downside to labor unions are often strikes. Strikes are the only real leverage that unions have and they result in workers uniting together and refusing to work until demands are met. However, strikes can lead to workers looking greedy and can even backfire in some instances for the workforce. Strikes can sometimes result in employers getting a new workforce to work for the lower wages. This means that labor unions do not always get the demands met. There is some risk involved in being a part of a labor union.

Although there are safeguards in place to make it illegal to for employers to fire workers that strike as a part of a labor union, there are instances where this has occurred.

Moving Labor Overseas
Another huge negative of labor unions is that it often results in some businesses moving their labor overseas. Labor union agitation and unrealistic wages can keep some businesses from keeping their labor in the states. Overseas it is possible to get labor for cheaper and you do not have to deal with meeting the demands of labor unions. In the end, losing jobs is what some labor unions have caused to happen.