Issuu

SOLUTION MANUAL FOR LABOR RELATIONS STRIKING A BALANCE 6E JOHN BUDD Chapter 1-13

CHAPTER 1 Contemporary Labor Relations: Objectives, Practices, and Challenges Chapter Overview This chapter begins with a brief description of what students will encounter as they begin their study of labor relations. Seeing labor unions is their most fundamental sense (a group of workers seeking collective influence) is important, as is grounding an understanding of labor relations in three major objectives of the employment relationship (efficiency, equity, and voice). Each objective is defined and the examples help illustrate how these objectives can either work together or conflict with each other. That these objectives can conflict raises the fundamental labor relations issue of finding a balance. Students are also introduced to the current state of the U.S. labor relations, including the major pressures and concerns emphasized by corporate and labor union leaders. The chapter closes with a reminder of the many reasons why labor relations has continued relevance. Lecture Tips To get students thinking and to establish a culture of participation, even before passing out the course syllabus, at the beginning of the very first class, jump right in and ask: ―What is a union?‖ If students need prompting, follow with: ―What do you think of when I say ‗union‘?‖ Most responses will refer to large, bureaucratic organizations (Teamsters, teachers, UAW) and perhaps conflict, work rules, and so on. Urge a more fundamental conception: a group of employees, at a plant or work site, who wish to act together to try to determine their wages and working conditions—a group of workers seeking collective workplace protection, influence, and voice. Alternative, take this one step further and start with a ―quiz‖ in which students write down answers to the following: 1. List your learning goals for this course. 2. What do you think of when you hear the phrase ―labor union‖? 3. How many union members are there in the United States? 1-1 Copyright © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

4. What fraction of U.S. workers are represented by unions? 5. Briefly, are unions good or bad? After they are done, ask for responses to question #1, and put them on the board. You can even ask for a show of hands to get a rough idea of how widespread each one is. Then establish expectations by indicating which will be addressed in this course, and which won‘t be (and why not). Question #2 is used as indicated above. Question 3 can be eye-opening to the students in that there are millions of union members. But, on average, density is low (question #4). Solicit a number of responses for question #5. I then tell them that the correct answer is ―this is complex!‖ which will be a theme running through the course. I then follow-up with one additional question: where did you get these answers from? And can probe further: How reliable are these sources? Do these sources consider multiple perspectives? I then integrate this with the course goals: A key objective of this course is understanding labor unions and unionized employment relationship from a variety of informed perspectives rather than narrow stereotypes or from prior experience that might be limited to a specific occupation or country. Continuing on the theme of course goals, this can also be a good time to explain the types of learning expected in the course: a. Understanding key terms and laws b. Participating in legal analyses, bargaining, and grievance handling c. But also a deeper analytical understanding This connects to dimensions of higher learning: (1) Declarative Learning: Learning WHAT (a) Facts and rules (2) Procedural Learning: Learning HOW (a) Skills and procedures (3) Conditional Learning: Learning WHEN and WHERE (a) Applications (4) Reflective Learning: Learning WHY 1-2 Copyright © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

(a) Understand one‘s values and the values of others (5) Metacognitive Learning: Learning HOW to LEARN (a) Directing and managing one‘s own learning The course will involve 1-4, and they are also responsible for #5.

Next, ask the following questions: Q1. What do you want to get out of working? (a) Money (b) Benefits (c) Sense of accomplishment (d) Feeling of self-worth Q2. How do you want to be treated? (a) Like a machine (b) Like a raw input (muscle or brains) (c) With dignity and respect (d) Fairly Students often admit that organizational and individual performance are important (efficiency), but also want to be treated with respect and would like to have some input (equity and voice). Moreover, they typically want more than just salary and benefits—in other words, work is not purely an economic transaction. Q3. How do you want your job conditions determined? (a) Do you always want someone telling you exactly what to do? Q4. What does the employer want? (a) High-quality work (b) Productivity (c) Team players From the students‘ responses, pull out: Efficiency, Equity, and Voice. Argue that the most difficult HR problems occur when these conflict with each other. In this case, a balance is needed. There are various ways to achieve this balance: labor unions are only one. Labor relations is the study of how employee representation—typically through labor unions— 1-3 Copyright © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

help strike a balance between efficiency, equity, and voice. Note: There are many justifications for equity and voice (e.g., religious, moral, political). Since students might find them philosophical, these theories are only hinted at in the text (in the ―Isn‘t Efficiency Enough‖ section). The important take-away is that equity and voice repeatedly show up in many theories and therefore merit consideration and respect. When efficiency, equity, voice, and other employee, union, and corporate goals conflict with each other, ask students what should happen next? Should property rights dominate labor rights? Or vice versa? Or should they be balanced? The U.S. labor relations systems seeks to strike a balance between property rights and labor rights. Even if you choose not to get into the details of property rights, labor rights, and human rights, at a minimum students need to appreciate that many of the tensions or conflicts in labor relations can be understood as conflicts between property rights and labor rights. Remembering this theme will help them understand various conflicts in the coming chapters (such as whether or not companies should be able to ban union organizers from their premises). If instructors want to discuss human rights to a greater extent, the question of whether labor rights are human rights is an important contemporary issue and will likely engage students. To this end, the optional Digging Deeper feature at the end of the chapter provides a unique discussion of the intellectual history of property rights and human rights. After this introduction, pass out the syllabus and discuss the details of the course, including the need to not only understand how the processes work, but what they are trying to accomplish, and the need to consider whether reforms are warranted. Conclude the discussion of the syllabus with a labor relations ice-breaker: ask each person to introduce themselves (could be their major or whatever) and to say something (anything!) pertaining to unions (potential examples: you belong to a union; your job include negotiating against a union; your favorite movie is ―On the Waterfront‖ or ―Norma Rae‖; you recently got into a car accident with a vehicle with a ―Union Yes!‖ bumper sticker…). Then cover the rest of the chapter: the basic premises of U.S. labor relations, the major pressures for reform, and the various ways in which labor relations is relevant for contemporary managers. Lecture Outline Learning Objectives: 1. Understand why studying labor relations is important and how the subject can be fascinating. 2. Define the objectives of the employment relationship (efficiency, equity, and voice) and of labor relations (striking a balance). 1-4 Copyright © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

3. Describe the basic features of the contemporary U.S. labor relations system—collective bargaining, detailed union contracts, and private sector union density decline. 4. Discuss the current pressures on the U.S. labor relations system—on the corporate side, workplace flexibility and employment involvement (stemming at least partly from globalization); on the labor side, low union density, a representation gap, and difficulties in organizing new workers. Labor union is a group of workers who join together to influence the nature of their employment. They seek improved wages and benefits, or protection against arbitrary treatment and discharge, or a greater voice in workplace decision making. From the worker‘s perspective, labor relations are about collective work-related protection, influence, and voice. For employers, labor relations are all about managing relationships with employees and labor unions in ways that promote organizational goals such as profitability (in the private sector) or cost-effective service delivery (in the public sector). Nonunion employers typically pursue these goals by trying to remain union-free through preventive labor relations strategies. These strategies can range from aggressive union-busting tactics that scare workers away from unions, to progressive human resource management tactics that seek to make unions unnecessary. Unionized employers might also try to undermine labor unions by using these same strategies, but most deal with their unions constructively, primarily through:  Collective bargaining  Adhering to the resulting union contracts  Resolving disputes through grievance procedures Society also has an important stake in labor relations. Strikes and other forms of labor– management conflict can deprive consumers of goods and services and can even jeopardize safety. Labor relations can also serve democracy by allowing labor unions to promote the decent working and living conditions that free and equal citizens deserve, and to provide a voice for workers in the political arena. Employees, employers, labor unions, the public, and policymakers are affected by the major processes of labor relations. Consequently, studying labor relations frequently emphasizes these processes:

   

The union organizing process (how unions are formed) The collective bargaining process (how contracts are negotiated) The dispute resolution process (how bargaining impasses are prevented or resolved) The contract administration process (how grievances over the application of the contract are managed) The Objectives of Labor Relations A. The foundation of studying any work-related subject is the objectives of the employment relationship. B. The three objectives of the employment relationship are: 1. Efficiency—the productive, profit-maximizing use of labor to promote economic prosperity. It is a standard of economic or business performance. Workplace policies that promote flexibility and productivity are examples of how efficiency might be achieved. In the public sector, efficiency can be seen as including cost-effective service delivery and other indicators of an efficient government agency. 2. Equity—fairness in the distribution of economic rewards, the administration of employment policies, and the provision of employee security. It is a standard of fair treatment for employees. Decent wage and benefit packages or policies that dismiss workers only for valid, performance-related reasons are examples of providing equity. 3. Voice—the ability of employees to have meaningful input into workplace decisions. It is a standard of employee participation. Employee autonomy and representation by labor unions are examples of ways to pursue the voice dimension. C. Labor relations must strike a balance between these three sometimes conflicting goals. D. Isn‘t Efficiency Enough? 1. For business leaders, business schools, the business press, and business-friendly politicians, the sole objective of the employment relationship is efficiency 2. Business is seen as best promoting economic prosperity through free-market competition. 3. Concerns like equity and voice are seen as social issues that interfere with business. 4. Companies, it is argued, have no obligation to provide personal and moral development. 5. The U.S. employment relationship is governed by the employment-at-will doctrine. A classic statement of this doctrine is the ruling that ―all may dismiss their employees at will, be they many or few, for good cause, for no cause, or even for cause morally wrong, without being thereby guilty of legal wrong.‖ 1-6

6. 7.

Employers have wide latitude to fire workers for many reasons—or no reason at all. The United States is unique among industrialized countries in the strength of at-will

employment and the corresponding lack of just cause discharge protections. There are a few exceptions to the employment-at-will doctrine in the United

States, but these are limited to several legislative restrictions (especially antidiscrimination laws), contractual restrictions (most widely associated with union contracts), and a patchwork of state-by-state judicial exceptions (such as firing someone for refusing to break the law). 9.

Although the employment-at-will doctrine treats workers as if they are nothing more than economic commodities exchanged in the marketplace, the fact that workers are human beings forces us to pay attention to equity and voice in addition to efficiency. 10. The quality of employment and the nature of the workplace are important for individuals, families, and society. 11. Work is not simply an economic transaction; work is a fully human activity such that employees are entitled to fair treatment and opportunities to have input into decisions that affect their daily lives. 12. Employee voice is essential for industrial democracy, a term that captures the belief that workers in a democratic society are entitled to the same democratic principles of participation in the workplace. 13. Work should be seen as more than an economic transaction. Equity and voice along with efficiency must be the central objectives of the employment relationship. II.

Conflicting Goals Mean Balancing Rights A. The greatest challenges in labor relations arise from conflicting goals. These clashes can be thought of as conflicts between the business pursuit of efficiency and workers‘ pursuit of equity and voice. B. Conflicts are generally resolved privately by individuals, unions, and companies through bargaining and other means. C. At a fundamental level, conflicts between employers and employees are seen as conflicts between the property rights of employers and the workers‘ rights of employees. D. The key right of workers is the ability to quit jobs they do not like. E. Most of the world‘s labor relations systems hold a pluralist perspective that sees the employment relationship as analogous to a pluralist political society in which multiple parties (such as employers and employees) have legitimate but sometimes conflicting interests and rights. F. The U.S. labor relations system is based on the belief that labor and management should freely interact and resolve their conflicts within a framework that appropriately respects the rights of each party involved. 1-7

G. Operationally, U.S. labor law tries to balance property rights and workers‘ rights, thereby balancing efficiency, equity, and voice. III. Contemporary U.S. Labor Relations

A. The three objectives of efficiency, equity, and voice provide a rich framework for understanding labor relations. B. Unionization is supported by both the society and workers because it helps strike a balance between efficiency, equity, and voice. C. Each labor law regime assumes that corporations have significantly greater bargaining power than individual, nonunion workers, resulting in the following conditions: 1. Substandard wages and benefits 2. Discriminatory treatment 3. Autocratic supervision 4. Long working hours 5. Dangerous working conditions D. Some of the reasons why the desired objectives of labor relations are not fulfilled: 1. Low pay and worker unrest can cause inefficiencies through lack of consumer purchasing power and economic disruptions because of strikes and other disputes. 2. Long hours at low pay under dangerous and discriminatory conditions violate equity. 3. Employer dictation of employment conditions as well as autocratic supervision fail to provide employee voice and are counter to democratic standards. E. The specific institutional approaches to striking a balance between efficiency, equity, and voice vary widely between countries in terms of the legal regulation of labor unions and other forms of worker representation, the scope of bargaining, and the specific nature of union contracts. F. U.S. labor relations processes are tightly regulated by the legal system. G. Some of the features of the U.S. labor law include the following: 1. It specifies that if a majority of workers in a specific workplace want union representation, their employer has a legal obligation to bargain with the union over wages, hours, and other terms and conditions of employment. 2. Workers cannot be fired or otherwise discriminated against because of their support for a union. 3. Employers cannot threaten employees or undertake other actions for the sole purpose of preventing unionization. H. The rationale for these legal protections is to allow workers to unionize to equalize bargaining power between employees and employers and thereby strike a balance 1-8 Copyright © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

between efficiency, equity, and voice in the following way: 1. Increasing the purchasing power of workers and reducing disruptive strike activity (efficiency) 2. Achieving fair labor standards and protection against worker exploitation (equity) 3. Providing democracy in the workplace (voice) IV. Contemporary Pressures: The Management Perspective 1.

When the U.S. labor relations system works effectively, efficiency, equity, and

voice are achieved through collective bargaining. In collective bargaining, representatives of the employer and the employees negotiate the terms and conditions of employment that will apply to the employees. The major subjects of the bargaining include:  Compensation—wages, benefits, vacations and holidays, shift premiums, profit sharing  Personnel policies and procedures—layoff, promotion, and transfer policies, overtime and vacation rules  Employee rights and responsibilities—seniority rights, job standards, workplace rules  Employer rights and responsibilities—management rights, just cause discipline and discharge, subcontracting, safety standards  Union rights and responsibilities—recognition as bargaining agent, bulletin board, union security, dues check-off, shop stewards, no strike clauses  Dispute resolution and ongoing decision making—grievance procedures, committees, consultation, renegotiation procedures The crucial feature of collective bargaining is that management‘s traditional authority to unilaterally establish terms and conditions of employment is replaced by bilateral negotiations. When the collective bargaining process results in terms that are approved by both upper management and union members, the provisions are written down and bound into a legally enforceable collective bargaining agreement, also called a union contract. Business pressures for competitiveness and quality have pressured the collective bargaining process in at least three major ways:  The business need for flexibility (efficiency) clashes with lengthy contracts that spell out detailed work rules (equity). As a result, there has been experimentation with shorter, less detailed (less restrictive) contracts.  The business need for cooperation and employee involvement clashes with 1-9

the traditionally adversarial bargaining process in which labor and management use aggressive tactics to extract as many gains or concessions from the other side as their power allows. As a result, some advocate the mutual gains of integrative or ―win-win‖ bargaining, which embraces a culture of joint problem solving rather than competition and conflict.  The need for both flexibility and involvement is not well served by a process in which contracts are renegotiated every three years or so with little productive communication (voice) between these formal negotiating periods. More bargaining relationships, therefore, are establishing mechanisms to foster ongoing communication. Characteristics of the business climate of the 21st century:  Flexible production methods  The rise of knowledge workers  The blurring of traditional distinctions between brawn and brains  Intense global competition

7. In the 2010s, there have also been sharp attacks on labor law in the public sector, particularly by conservative political groups and politicians who see strong public sector unions not only as political opponents, but also as obstacles to reducing the size of government V. Contemporary Pressures: The Labor Union Perspective. 1.

U.S. labor law is criticized by union supporters—not so much for being outdated but rather for being too weak. 2. The key measure of the state of organized labor is union density—the percentage of workers who are union members. 3. Private sector union density in the United States has declined since 1955 from about 35 percent to only 6.2 percent of the workforce in 2019. 4. In contrast, public sector union density jumped in the early 1960s, increased steadily for 15 years, and after a slight decline has leveled off at around 35 percent (though slight declines in past couple of years). Note: updated statistics can be obtained from the BLS: https://www.bls.gov/news.release/union2.toc.htm 5. One possible explanation for the 60-year decline of private sector U.S. union density is that employment has declined in traditionally unionized industries such as manufacturing while employment has increased in nonunion industries such as services. 6. Related structural, or compositional, changes include regional and demographic shifts, such as faster employment growth in southern states, more women in the 1-10 Copyright © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

labor force, and increases in education and skill levels. 7. A second possibility is that demand for union services has declined. This explanation has three components:  Demand can decline because unions are not doing a good job of responding to the desires of a changing workforce and overcoming the negative stereotypes of unions that are so common in American culture.  If employers have improved their responsiveness to employees‘ needs, this can reduce demand for union protection and advocacy.  Increased protective legislation may have provided a substitute for unions. Examples include the Civil Rights Act and Equal Pay Act (and related laws pertaining to age and disability discrimination) forbidding discriminatory employment practices; the Occupational Safety and Health Act governing workplace safety standards; and the Family and Medical Leave Act, which requires employers to provide unpaid leave for parental, family, and medical reasons. 8. The third, and most controversial, possible reason for the decline in U.S. union density is employer resistance or opposition. 9. One factor that seems to support the significance of employer opposition is the existence of a representation gap: Employees say they want more representation in the workplace than they have. 10. Union membership trends might also be caught in a downward spiral  The fraction of workers who have never been unionized is increasing so there are fewer opportunities for nonunion workers to experience unionization.  If union membership is like some consumer products, then it‘s not fully appreciated until it is experienced firsthand. So if workers are increasingly less likely to experience unionization, they are less likely to develop an appreciation for unions; and union membership will continue to decline.  Interestingly, however, significantly more people experience unionism at some point in their working lives than the low union density figures at any one time might suggest. But those who do experience unionism are likely to first do so at a young age (maybe you had a teen job in a unionized grocery store), so there is an opportunity for unions to do a better job of making this experience a good one.  Another possible downward spiral stems from the cost of forming unions in nonunion workplaces. As membership declines, it is difficult for unions to maintain their level of organizing because organizing drives are expensive. But less organizing likely means fewer new members, which leads to further reductions in new financial resources. So the cycle 1-11 Copyright © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

continues as there is less money to support new organizing. VI. The Continued Relevance of Labor Relations A. Contrary to popular stereotypes, unions are relevant not only to blue-collar occupations; doctors, nurses, lawyers, teachers, writers, professional athletes, college professors, and even graduate students are represented by unions. B. Labor relations are a relevant and dynamic area of study and practice. C. An understanding of labor relations is important for all current and future managers. D. The study of labor relations considers the goals of workers and society and does not shy away from the conflicts that can arise between competing groups, especially in a real world characterized by imperfect competition. E. Labor relations can help everyone understand and resolve conflict—in the workplace, in business relationships, and in everyday personal interactions. Active Learning Ideas 1. 2. 3.

4. 5.

Have students write down answers to the four questions posed in the lecture tips section before asking for responses. Have students take the employment-at-will quiz with a partner and discuss their answers. Have students discuss the four nonunion scenarios in ―In a Nonunion Workplace, Can Managers...?‖ in small groups and come up with a group answer before sharing with the class. Have students discuss the Ethics in Action case in small groups and then have groups debate each other. I adapted this from a writing exercise called ―Writer‘s Last Word,‖ perhaps it could be called ―Chooser‘s Last Word.‖ This is an active learning suggestion for the end of the course, but it requires advance assignment, so it is presented here. Early in the semester, tell students: ―As you read the course materials or other relevant materials (such as newspaper articles or websites pertaining to labor relations), write down passages that you find interesting, controversial, or insightful (whatever catches your attention). By [a date close to the end of the semester should be inserted here], e-mail me at least three passages (including the source and page number). We will discuss selected passages during the last week of class.‖ To conduct the exercise, put selected passages on overheads or into PowerPoint. Do not identify who submitted the passage on the slides, but keep a note for your own use in class. In class (for me, during the last week of the semester), put up one passage at a time and ask for student reactions. Then call on the person who chose the quote (―the chooser‖) to have the final word. You can also start with a passage or two of your own to kick things off. 1-12 Copyright © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

Reflection Questions 1.

In a concise paragraph, paraphrase what you have learned about labor relations to explain to a potential employer why studying labor relations will make you a stronger job candidate. Students‘ answers will vary. Their answers may contain points like studying labor relations will help them manage relationships with their employees and labor unions in ways that promote organizational goals such as profitability or cost-effective service delivery, labor relations reveals the consequences of poorly managing a workforce, etc.

Interview workers, union officials, and managers who have been involved in a union organizing drive (or look in the newspaper or online). What issues were emphasized in the organizing drive? Are the issues examples of efficiency, equity, or voice? Students‘ answers and cited situations will vary.

Summarize the major facts about U.S. union density. Why has union density declined so sharply in the private sector? Is this good or bad? Students‘ answers will vary, but the answers need to be tied to obvious observations. The reasons for the 65-year decline of private sector U.S. union density are controversial. One possible explanation is that employment has declined in traditionally unionized industries such as manufacturing while employment has increased in nonunion industries such as services. A second possibility is that demand for union services has declined. A third controversial reason for the decline in U.S. union density could be employer resistance or opposition.

As an employee, what kind of voice would you like on a job? Would this make you more productive? Should whether or not you are more productive be the only criterion for whether or not you should have this voice in the workplace? Students‘ answers will vary, but comparison should be made between the industrial relations and human resource management views. The former argues that while voice might make you more productive, you are entitled to voice even if it does not make you more productive. The latter emphasizes the importance of voice for enhancing productivity. Suggested Class Discussion or Short Essay Topics

Pareto optimality says that no one can be made better off without making someone else worse off. Otherwise, if someone can be made better off without harming someone else, the current situation is wasteful (efficiency). Do you agree or disagree? Why or why not?

Market failures can be controversial because many believe that trying to correct a market failure, such as through government regulations or subsidies, can make things worse, not better. Do you agree or disagree? Can anyone cite examples of attempts to correct a market failure (such as the government paying farmers not to grow food)?

Modern workers have become dependent on their jobs, not on their property, as in earlier agrarian and craft-based societies: ―We have become a nation of employees. We are dependent upon others for our means of livelihood, and most of our people have become completely dependent on wages. If they lose their jobs, they lose every resource, except for the relief supplied by the various forms of social society.‖ How do students feel about this quote, particularly the last sentence? Do they agree that if they lose their jobs, they lose every resource? Discuss how the Great Depression may or may not support this theory.

Discuss the characteristics of a public sector vs. private sector workplace and ask for examples of each. Why might union density be so much higher in public sector workplaces than in private workplaces?

The standard of equity in employment relationships partly derives from religious views on the sanctity of human life and respect for human dignity. The Catholic Church‘s papal encyclicals have been the most explicit. Explain what a papal encyclical is, who wrote it, to whom it‘s directed, and what effect the content regarding workers may have on society. Good reference: http://www.papalencyclicals.net/.

Discuss why it is imperative for students of labor relations to study not only the existing processes, but to also consider reform possibilities. Ask students to write down any reform possibilities that have occurred to them after this short foray into labor relations. At the end of the term, ask the students this question again.

Many brands have been accused of producing their wares in ―sweatshops.‖ Define sweatshop. Would you buy a product if you knew it was made in a sweatshop? Online Exploration

Additional suggestion beyond the two online exploration exercises that appear in the text: 1. Search the Internet for Papal encyclicals or statements about labor in other religious denominations. Are these good principles for the employment relationship? If so, how should society ensure that they are fulfilled? Note: the major encyclical on labor is ―On the Condition of Workers‖ (Rerum Novarum, 1891) by Pope Leo XIII which was followed by 1-14 Copyright © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

―Reconstruction of the Social Order‖ (Quadragesimo Anno, 1931) by Pope Pius XI, ―A Call to Action‖ (Octogesima Adveniens, 1971) by Pope Paul VI, and ―On Human Work‖ (Laborem Exercens, 1981) and ―The Hundredth Year‖ (Centesimus Annus, 1991) by Pope John Paul II.

CHAPTER 2 Labor Unions: Good or Bad? Chapter Overview Students (and practitioners and policymakers) often already have ideas about whether labor unions are good or bad, but these are often incompletely formed and do not reflect an understanding of alternative views. The goal of this chapter is to illustrate four alternative views that are each rooted in a well-developed intellectual school of thought: neoliberalism, (unitarist) human resource management, (pluralist) industrial relations, and critical (or Marxist) industrial relations. These schools are initially illustrated by a consideration of their views on the causes of, and therefore on the appropriate solutions, to labor problem of the early 20th century. Then the relevance for thinking about contemporary labor relations is illustrated. The industrial relations school is key for understanding the existing labor relations legal framework and processes. A thorough understanding of this school of thought is essential, and this understanding is achieved by contrasts with the other three schools. Moreover, the other schools are essential for understanding alternative perspectives on labor unions and desired future directions for U.S. labor policy. This leads into the relevance for the broader issue of how one prefers to have employment terms and conditions determined, and an illustration of how different schools have dominated in different time periods. Lastly, whether or not labor unions are good or bad can also be seen as an empirical issue. So the research on what do unions do is briefly summarized. Moreover, labor unions are not purely workplace institutions. There are various categories of theories of the labor movement based on the social roles of labor unions. Some of these theories are discussed in the context of the workplace. Others move into political, psychological, and spiritual arenas. But ultimately, how someone evaluates what unions do depends on what school of thought guides their thinking. Lecture Tips The most important goal of this lecture is for students to understand that there are four very different ways to think about the employment relationship: 1. The neoliberalism model 2. The human resource management model 3. The industrial relations model 4. The critical industrial relations (or Marxist) model Each of these schools of thought embraces different assumptions about whether or not labor is simply a commodity, how markets work (are they perfectly competitive), the nature of conflict in the employment relationship, and the importance of employee voice. This is essential for understanding labor relations because different views yield different visions of labor unions. Many students see unions as bad or unnecessary. This is because many embrace the neoliberal or human resource management vision of the employment relationship—though they have probably not thought about these models explicitly. It is important to show them that their views of labor 1-16 Copyright © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

unions are linked specifically to certain assumptions about the employment relationship. The importance of this understanding is magnified by the fact that U.S. labor law, the existing labor relations processes, and many union leaders embrace a different school of thought—the pluralist industrial relations model. It bears emphasizing that students do not need to accept the views of the industrial relations school, but it is imperative that they understand it in order to understand the world of labor relations. Students can be more receptive and less defensive when confronting these issues in a historical context. Therefore, use the historical labor problem of the working conditions of the early 20th century to discuss various sources of this labor problem, and by extension, the four schools of thought on the employment relationship. Students frequently have a general sense of the exploitive conditions of those times so rather than lecture about these conditions, encourage them to offer ideas that can be written on the board (the testimony from Table 2.1 can supplement this discussion). Then have students brainstorm about possible causes to the labor problem. Once a variety of alternatives are on the blackboard, take these responses and shape them into the four schools of thought. To make these schools of thought stand out, reinforce them by using the line art that appear in the text (alternatively, see the active learning ideas section for a different use of the pieces of line art). The imagery of Figure 2.3 (the pendulum diagram from the Survey, February 7, 1914) is critical for understanding the entire course (labor relations as striking a balance both in terms of bargaining power and rights). And the other pieces of line art can be used to deepen the understanding of each alternative because the features of any one school are made clearer through comparisons with alternatives. Once the students understand the differing views of the four schools from a historical perspective, discuss how they continue to be essential for understanding contemporary labor relations and all aspects of the employment relationship (and broader economic and social debates, such as over globalization). Make sure students understand the significant difference between the HRM vision of unitarist conflict and the IR vision of pluralist conflict, and between the neoliberal faith in free markets versus the IR desire to place checks and balances on markets to help them work better and produce fairer outcomes. Point out that this reveals why supporters of free markets see labor unions as special interest monopolies, why HR managers don‘t see a productive role for labor unions in their workplaces, and why union leaders are skeptical that markets and HR policies always look out for workers‘ interests. If desired, you can also reinforce the power of these schools of thought by showing how they provide important frames of reference for not only evaluating labor unions, but also HRM practices as summarized in the following table which parallels Table 2.2 in the text:

Views of Human Resource Management Practices

Model of the Employment Relationship

Human Resource Management Practices Are…

Neoliberal

Of secondary importance because they are administrative or institutional mechanisms for implementing implicit contracts, incentives, and other manifestations of selfinterested economic actors interacting in competitive labor markets.

(Unitarist) Human Resource Management

Essential because they are the key method for creating productive employment relationships by aligning the interests of employees and employers.

(Pluralist) Industrial Relations

Useful for aligning those employee-employer interests that are shared, but insufficient for balancing competing interests because of problems of unilateral employer authority and power.

Critical Industrial Relations

Manipulative managerial tools for shaping the ideology and structure of the workplace to strengthen capital‘s control and power over labor.

Source: John W. Budd and Devasheesh Bhave (2019) ―The Employment Relationship : Key Elements, Alternative Frames of Reference, and Implications for HRM,‖ in Adrian Wilkinson et al., eds., Sage Handbook of Human Resource Management, 2nd ed. (London: Sage), pp. 41-64.

The last two sections of chapter 2 can be covered more quickly. To evaluate the effects of unions, you can use slides that summarize the varying effects of labor unions. Then, the subsection on the labor movement is a reminder to students that unions have diverse roles in society, even though this book focuses primarily on their workplace roles. For both of these topics, reinforce the importance of the four frames of reference for how we evaluate what unions do. A powerful example is the contrast between the common critique of excessive union wages (rooted in the free market beliefs of neoliberalism), and the aim of U.S. labor law to help workers unionize in order to increase their wages (rooted in an IR vision of unequal bargaining power). In the optional Digging Deeper section, students with a basic understanding of economics can be shown how the varying effects of unions relate to Freeman and Medoff‘s two economic faces of unions. But this material is not essential. Understanding the four schools of thought, and the implications for alternative perspectives on labor unions and labor law, is a major foundation of this book. I have found that this really deepens students‘ understanding of the key concepts, practices, and debates. So I believe it‘s important not only to create that foundation in this part of the course, but also to re-introduce it throughout the course. For example, the evolution of U.S. labor law (chapter 4) reflects shifts in the dominant school of thought. Alternative perspectives on how to deal with globalization (chapter 11) are rooted in different schools of thought. And future directions for labor relations (chapter 13) are also shaped by one‘s school of thought.

Lecture Outline Learning Objectives: 1. Explain the four distinct schools of thought about the employment relationship— neoliberalism, human resource management, industrial relations, and critical or Marxist industrial relations. 2. Understand how different views of labor unions are fundamentally rooted in the basic assumptions of these four schools of thought. 3. Discuss various roles of labor unions in the employment relationship and in society. 4. Identify alternative methods for making workplace rules. 5. Compare employee representation through labor unions to other methods of workplace governance. The mainstream media in the United States—that is, the major TV networks and newspapers that are themselves corporations concerned with making profits—reinforce important stereotypes of labor unions. In general terms, the media report on issues from a consumer rather than worker perspective while emphasizing the accomplishments of business leaders and entrepreneurs.

It is important for students of labor relations to recognize their own stereotypes of labor unions and to replace them with an informed understanding of the central issues in labor relations, and to appreciate multiple perspectives on labor relations and labor unions. I.

The Labor Problem A. Today‘s critical issues in human resources and industrial relations include the following: 1. 2. 3. 4. 5.

Growing labor market disparities Problems of low-wage workers trying to move out of poverty and support families Corporate pressures for cost control, quality, and flexibility to compete in a global, information-rich economy The need to educate individuals as lifelong learners because of ever-changing technologies Problems of work–life balance, especially for working mothers

B. The critical human resources and industrial relations issue in the early 1900s was the labor problem: undesirable outcomes that stem from an inequitable and contentious, or perhaps even oppressive and exploitative, employment relationship. C. Important dimensions of the labor problem include: 1. 2. 3. 4. 5.

Long working hours Low wages Poor living conditions Unsafe and unsanitary conditions in the workplace Insecurity

D. The important dimensions of the labor problem were reinforced by the managerial mind-set of ―workers as machines.‖ E. Labor was frequently viewed as just another production input—no different from machines or raw materials. F. With mass manufacturing methods emphasizing repetitive, narrowly defined tasks by individual workers to achieve high output, workers had no contact with the final product and minimal control over the content of their jobs. G. The poor conditions of the labor problem were a problem for two broad reasons: 1.

The societal or human perspective—people should have better lives. This is partly an economic issue, that is, workers should be able to afford decent housing, clothing, food, and the like; in other words, equity is important. The business perspective—are the workers motivated? Loyal? Productive? Absenteeism and turnover were costly.

H. Strikes and other forms of industrial conflict that resulted from the labor problem in both the private and public sectors were costly to business and to society more generally. II. Four Schools of Thought about the Employment Relationship A. The Neoliberal School. 1.

The neoliberal school of thought focuses on the economic activity of self-interested

agents, such as firms and workers, who interact in competitive markets. Efficiency, equity, and voice are achieved through free-market competition. Under some assumptions (such as perfect information), competition results in the optimal allocation and pricing of resources. 4. Prices in a competitive market reflect the value of what‘s being purchased, so outcomes are efficient. 5. Voice is expressed through freely participating or abstaining from transactions. 6. The conditions of the labor problem are not seen as exploitation if there is sufficient labor market competition. 7. Employees are paid their economic value and are free to quit if they feel they are being exploited. 8. Competition should be ensured if market failures prevent competitive markets from working properly. 9. The best protection an employee has against his or her current employer is not the government, a lawyer, or a union, but rather other employers. 10. As long as there is competition, employment outcomes are not seen as a ―problem‖ (with its negative connotations). 11. Outcomes are value-free, so there may be a labor situation (which simply describes the outcomes) but not a labor problem (which implies that the outcomes are undesirable). 12. Unions are seen as labor market monopolies that restrict the supply of labor and interfere with the invisible hand of free-market competition. 13. The economics view of work is that it is a lousy activity endured only to earn money. 14. The role of government is not to establish labor standards but only to promote competition. 15. The role of law is to protect individual freedoms that are necessary for competition. 2. 3.

B. The Human Resource Management School. 1. 2. 3. 4. 5.

7. 8.

The human resource management school, which was formerly called the personnel management school, believes that the labor problem stems from poor management. This school of thought presents a different underlying cause of the labor problem: poor management. The resulting solution to the labor problem is better management. The interests of workers and the firm need to be aligned via better management. To create motivated and efficient workers, firms should design and implement better supervisory methods, selection procedures, training methods, compensation systems, and evaluation and promotion mechanisms. If workers want justice, security, respect, and opportunities for advancement, then firms should design human resource management policies that are responsive to these needs to create motivated and efficient employees. Voice is typically informal, such as in open-door resolution procedures in which workers individually discuss complaints with their managers. To consider the role of unions in the human resource management school of thought, it is important to distinguish independent labor unions from nonindependent employee organizations:  Independent labor unions—are legally and functionally independent of employers and governments and have the power to elect their own leaders, collect and spend their own dues money, establish their organizational objectives and strategies, and lead strikes. 

Non-independent employee organizations— lack such authority as enjoyed by

independent labor unions and are controlled by employers (like the company unions in the United States in the 1920s) or by governments (as traditionally is the case for unions in China). 9.

In the human resource management school, unions are considered a sign of unhealthy human resource practices and so a healthy company shouldn‘t have one. 10. Human resource professionals have greater influence in companies when there is a threat of unionization, but an important objective is often to keep unions out. 11. Critics see human resource management as nothing more than a sophisticated (albeit gentle) antiunion device. 12. Independent unions are seen as unnecessary ―third parties‖ that prevent employers and employees from getting ―closer together.‖ 13. ―Company unions‖ or ―nonunion representation plans‖ were created by the companies in order to meet and confer with worker representatives; but there were no bargaining, and the representation plans had no authority outside management.

C. The Industrial Relations School. 1.

4. 5.

The industrial relations school, formerly called the institutional labor economics school, believes that labor problems stem from unequal bargaining power between corporations and individual workers. Institutional labor economists saw the following market imperfections:  Persistent unemployment 

Company towns dominated by a single employer



Lack of worker savings and other safety nets



Large, monopolistic employers with undue influence in markets, politics, and the legal system

With greater bargaining power, employers can pay low wages for working long hours under dangerous working conditions. This greater bargaining power allows managers to be autocratic and authoritarian. When there is a balance of power between labor and management, there is an abundant harvest for both to share. The industrial relations school believes that, if the labor problem stems from unequal bargaining power, the solution is to increase workers‘ bargaining power by forming independent labor unions and pursuing collective bargaining.

D. The Critical Industrial Relations School. 1.

2. 3. 4.

The critical industrial relations school, traditionally labeled ―Marxist industrial relations,‖ and also referred to as a radical perspective, emphasizes that capitalist institutions do not simply exist but are created by society (such as through laws governing market transactions or business incorporation, and through social norms governing acceptable behaviors). This school focuses on how dominant groups design and control institutions to serve their own interests, albeit imperfectly due to resistance from competing groups. Initiatives that appear to benefit workers can be seen as reflecting class interests. A labor law that legally protects workers who try to unionize is seen as an attempt to mollify the working class and prevent it from agitating for deeper changes in the

6. 7.

capitalist system. Within their own organizations, employers are seen as structuring the organization of work and human resource management practices to serve their interests at the expense of labor. The division of labor is viewed as a strategy to make labor easily replaceable and therefore weak. Some of the strategies to prevent workers from unionizing include the following:  Fair treatment through progressive human resources policies 

The perception of input through nonunion voice mechanisms



The creation of pro-company attitudes through the development of distinctive corporate cultures

The cause of the labor problem is believed to be the control of society‘s institutions and the means of production by specific groups or classes. 9. The solution to the labor problem is a significant restructuring of the nature of capitalism—such as replacing capitalism with socialism. 10. Labor unions can be important in critical industrial relations. 11. Strong, militant unions can aid workers‘ struggles with capitalism by mobilizing and raising the consciousness of the working class and fighting for improved compensation, better working conditions, and greater control over workplace decision making. 8.

E. The Fundamental Assumptions of Human Resources and Industrial Relations. 1.

2. 3.

4. 5.

Low wages for long hours of dangerous work under autocratic supervision and periods of insecurity can be traced to four possible underlying causes:  Market failures 

Poor management



Unequal bargaining power between employers and individual employees



The domination of labor by the capitalist class.

In turn, these lead to four different views of labor unions (Table 2.2). Underlying these views are three fundamental assumptions about how markets work and the nature of employment:  Is labor just a commodity? 

Are employers and employees equals in competitive labor markets?



What is the nature of conflict between employers and employees?

Each of the four schools of thought answers these questions differently. What is the nature of labor? Neoliberalism views the purpose of the economic system as consumption. Labor is just another commodity or machine in the production process. The other three schools (human resource management, industrial relations, and critical industrial relations) reject the belief that labor is just a commodity and instead see labor as human beings with aspirations, feelings, and rights. Work fulfills important psychological and social needs and provides more than extrinsic, monetary rewards that

support consumerism. Are employers and employees equal in the labor market and the legal arena? The assertion that employers and employees are equal is equivalent to believing that the fundamental assumptions of neoliberalism, such as perfect information and no transaction costs, are fulfilled. The other schools of thought, however, assert that employers and employees are not equals, either in the labor market or in the legal arena. What is the nature of conflict between employers and employees? Three different answers distinguish the human resource management, industrial relations, and critical industrial relations schools of thought—and are therefore important. The human resource management school has a unitarist view of employment relationship conflict. Conflict is not seen as an inherent or a permanent feature of the employment relationship; conflict is seen as a manifestation of poor human resource management policies or interpersonal clashes such as personality conflicts. In contrast, the industrial relations school sees the workplace as characterized by multiple interests—that is, a plurality of legitimate interests akin to a pluralist political system—so this school embraces a pluralist view of conflict in the employment relationship. Believers in pluralist workplace conflict see government laws and labor unions as balancing conflict—striking a balance among efficiency, equity, and voice. The critical industrial relations school believes in an inherent conflict between employers and employees, but it is significantly broader than the limited economic conflict in the pluralist view. Conflict is not limited to higher wages or better benefits; it is a social conflict of unequal power relations or class conflict. The power of these alternative perspectives on the true nature of the employment relationship is that they yield different visions of the practice of human resource management, diversity initiatives, public policies on work, and of particular importance here, employee voice mechanisms. Employee voice is an important component of many contemporary human resource strategies; and with a unitarist view of conflict, workplace voice can successfully be provided through policies that encourage individual voice or through a nonunion employee representation plan. In contrast, if employment relationship conflict is in fact pluralist (the industrial relations belief in the existence of some inherent conflicts of interest), it follows that industrial democracy can be achieved only by traditional labor unions that are independent of management. Only independent unions can fight for the protection necessary for industrial democracy such as free speech and due process protections.

III. The Continued Relevance of the Labor Problem A. Solving Labor Problems: What‘s Your Preferred Method? 1.

Thinking about how to best solve labor problems is particularly instructive for understanding labor relations because it provides the context for evaluating whether unions are good or bad.  Unions are assumed good if they achieve a better balance among efficiency, equity, and voice than do alternative mechanisms. 

Unions are assumed bad if alternative mechanisms strike a better balance.

2. Each person‘s belief about their preferred system is connected to how one thinks the employment relationship works as captured by the intellectual models outlined earlier in

the chapter (see Figure 2.5). If one believes that the employment relationship is characterized by unequal bargaining power as in the industrial relations school, there are two important governance mechanisms for balancing the goals of employers and employees:  Statutory government regulation—try to establish labor standards, but it does not involve employee voice. 

Labor unions—try to counter corporate bargaining power and also provide voice that is independent of managerial authority.

B. Solving Labor Problems: The Evolving U.S. Approach. 1.

U.S. political and legal thought during the 1800s and early 1900s was dominated by laissez faire views consistent with the neoliberal school, especially the supremacy of the freedom to enter any type of economic relationship—including employment—without government or union interference. 2. Collective bargaining was an important model of workplace governance in the postwar period, but in the latter part of the 20th century, the nonunion human resource management model came to dominate. 3. This transformation resulted from the growth of nonunion companies and from heavily unionized companies becoming less unionized by the construction of new nonunion plants in the southern United States. 4. With little threat of unionization or new employment laws in the United States, finance has trumped human resources in many organizations. 5. Despite the rise of the nonunion human resource management model and the reemergence of the free-market model, the U.S. labor relations is founded on the beliefs of the industrial relations school in the context of the early 20th-century labor problem. 6. All four schools of thought continue to have great practical relevance:  The laissez faire emphasis of neoliberalism dominates national and international policy debates under the guise of the neoliberal market ideology



Today‘s corporate human resource policies are rooted in the principles of the human resource management school of thought



The critical model underlies the movement to revitalize unions by transforming them into aggressive champions of the working class

Although some details may have changed, the United States and every other developed and developing country in the 21st century continue to struggle with the modern equivalent of the labor problem. All three dimensions of efficiency, equity, and voice are relevant to today‘s employment relationships.

IV. What do U.S. Unions do? A. The evaluation of labor unions fundamentally depends on the following: 1. 2. 3.

The nature of work, How labor markets operate The nature of employment relationship conflict

The importance of employee voice

B. In neoliberalism unions are harmful because they are monopolies that impair economic efficiency. Unions may exist, but they are bad. The preferred method of workplace governance is reliance on competitive markets. C. In the human resource management school, unions are an indication that management is not successfully creating motivated and efficient workers via firm-created human resource management policies. Unions may exist, but they are unnecessary. D. In critical industrial relations thought, unions are either management tools of worker suppression or worker tools of power and revolution, though neither of these are mainstream U.S. beliefs. The desired mechanisms for governing the workplace are worker control or socialism. E. Within the intellectual framework of the industrial relations school, unions are a critical part of the solution to the labor problem because collective, not individual, bargaining is needed to match corporate bargaining power and because independent employee voice is important in a democratic society. The preferred method of workplace governance is a combination of government standards and labor union representation. One important method for answering the question of whether unions are good or bad is conceptual. F. Evaluating the Effects of Unionism. 1. 2.

6. 7.

The research on the effects of unions on U.S. workers and workplaces is summarized in Table 2.3. Unionized workers in the United States are generally estimated to have wages approximately 15 percent higher than comparable nonunion workers. This is called the union wage premium. Unions can be hypothesized to lower productivity by using their power to negotiate restrictive work rules and by introducing time-consuming decision-making procedures. On the other hand, unions can potentially enhance productivity in several ways. The research evidence supports the presence of a shock effect: The presence of a union shocks managers out of complacency and forces them to develop better managerial practices and policies that improve workplace efficiency, including more formal human resource policies such as training programs, and objective rather than subjective selection tests. Union voice gives workers an alternative to quitting when they are dissatisfied with a job, and research finds that unionized workers are in fact less likely to quit than similar nonunion workers. Labor unions can also provide a sense of community in the workplace and counter some negative psychological effects of the lack of ownership in one‘s work. Unions can also enhance a democratic society by promoting workplace interactions among workers from diverse backgrounds.

G. Theories of the Labor Movement. 1.

A labor movement is a social movement in which workers and unions from multiple workplaces join together to pursue common interests, most frequently in the political and social arenas. The labor movement provides a voice for workers in the political arena; whereas labor unions, or their associated political action committees, endorse candidates for political offices, mobilize get-out-the-vote efforts, campaign on behalf of candidates, and lobby

4. 5.

and make donations to lawmakers. From the perspective of neoliberalism in which labor unions are labor market monopolies, a labor movement‘s political activities are also seen as the use of power to benefit unionized workers at the expense of others. The critical industrial relations model sees labor movements that are active in the political and social arenas as vital for countering the dominant power of employers. From the perspective of the industrial relations school of thought, a democratic society is seen as a pluralist society in which numerous groups have common and conflicting interests—corporations, consumers, farmers, workers, home owners, and the like. From a pluralist perspective then, the labor movement makes important contributions in the political and civil arenas in contemporary democratic societies; and the relationship between a vibrant, independent labor movement and a healthy, balanced democratic society must be remembered when evaluating labor unions. The intellectual foundations of the U.S. system of labor relations come from the industrial relations school of thought.

Active Learning Ideas 1.

The chapter 2 PowerPoint slides include the four pieces of line art representing each school of thought. As an alternative to integrating these into the lecture, lecture on the four schools without referring to the pieces of line art. Then make photocopies and distribute the four pictures, and (in pairs) have students try to match the pictures with each school of thought. Do not let them use their textbooks. Discuss and de-brief. Note: the four pieces of line art without any identifying information appear at the end of the chapter 2 PowerPoint slides for use in this exercise. The description of each picture in the text provides the details needed to make the connections between each picture and the school of thought.

Have students list the four schools of thought along with the basic cause of the labor problem and solution to the labor problem for each. Alternatively, have them construct a ―defining features matrix‖:

Directions: Place a check mark or a ―Y‖ next to the features that typically characterize each school of thought and an X next to features that are not characteristics. IR School

HR School

Markets are important, but not completely deterministic

Workers are seen as having rights in a democratic society

Defining Features

{student should add more dimensions here} 3.

Assign small groups of students a specific nonunion business situation (e.g., a hotel, auto assembly line, insurance company sales force, etc.) and ask them to discuss the issues raised in the HR Strategy box on employee voice. Then have the small groups report their ideas to the class.

Consumers almost unanimously agree that they should be able to keep their phone number if they switch phone companies. Before November 2003, however, individuals who switched wireless carriers had to get a new cell phone number. Only with government-mandated ―local number portability‖ rules that became effective in November 2003 were consumers able to keep their cell phone number when changing carriers within the same local area. Have students discuss the following: Without government regulations, why do you think consumers were unable to obtain local number portability? Hint: Apply the different schools of thought described in this chapter. Besides government regulation, what are some alternatives for obtaining local number portability? Suggestive Answer: Neoliberalism: market is competitive, but consumers unwilling to pay for the extra cost of portability; alternatively, there is a market failure because this requires coordination across a number of competing companies HRM: companies are ignorant and don‘t understand that they could attract more consumers by offering portability Pluralist IR: imbalance of power between individual consumers and large wireless companies Alternatives besides government regulation: Neoliberalism: industry association to internalize the coordination problem HRM: educate companies as to better ways of managing their business Pluralist IR: help consumers join together to collectively pressure the companies to change

Reflection Questions 1.

Mother Jones, a colorful figure in U.S. labor history who will be introduced in chapter 3, said in 1913, ―The world is suffering, today, from an industrial yellow fever, not less fatal, but I am certain, as preventable.‖ Yellow fever was caused by mosquitoes, so Mother Jones continued, ―Search for the mosquito! That ought to be a slogan with investigators on both sides of the labor question.‖ What is the mosquito that causes the labor problem in each of the four schools of thought? The following are the causes of labor problem in each of the four schools of thought:  Neoliberalism —the disruption of competition by unions or the government  Human resource management—poor management  Industrial relations—inequality of bargaining power between corporations and individual workers  Critical industrial relations—control of both society‘s institutions and the means of production by the capitalist class

How are the major premises of the neoliberal and industrial relations schools consistent with Figure 2.2? How would you change the label on the wheelbarrow to make this into a neoliberalism drawing? An industrial relations drawing? In both the neoliberal and industrial relations schools, everyone benefits from cooperation. Sharing the bounty of the harvest in the wheelbarrow is therefore consistent with these schools in addition to the human resource management school. In neoliberalism, the wheelbarrow should say ―competition‖; and for industrial relations, ―equal bargaining power.‖

Review Figure 2.3. Sketch a similar diagram to capture the range of outcomes possible within the human resource management school (Hint: Use a pendulum but not necessarily a power struggle between labor and management). Students‘ answers will vary. However, one possible idea for the diagram would be a pendulum that goes from conflict and distrust at one end to harmony and productivity at the other. Ineffective policies that fail to align the interests of workers and employers fall at the one end of the spectrum, effective policies that produce alignment are at the other.

Think of jobs you or someone you know has had. What was undesirable about these jobs? Was the pay too low? Hours too long? Were you treated poorly? Which of the four schools of thought best explains the causes of these undesirable aspects? What would you try to do to redress these undesirable features? Students‘ answers will vary.

How should employment terms and conditions be determined? Why? Students‘ answers will vary, but there should be clear connections between assumptions about market and conflict on the one hand, and one‘s preferred method for setting employment terms and conditions as indicated in Figure 2.5. 1-29

Suggested Class Discussion or Short Essay Topics 1

Give a definition of ―laissez faire‖ economics (an economic doctrine that opposes government regulation of or interference in commerce.) Why do you think this was the dominant political and legal view in the 1800s and early 1900s?

Workers in many occupations want a stronger voice in the workplace and there is increasing recognition that this is a fundamental human right. Do you believe that voice in the workplace is a fundamental human right? Why or why not?

Theory X, the traditional control model, assumes that people dislike work and have little ambition. Theory Y assumes that, under the right conditions, individuals can derive satisfaction from work and will ambitiously pursue various goals if they are committed to them. Which theory do you agree with? Give several reasons why you agree. Give several reasons why you disagree with the opposing theory. Online Exploration

See the text for two online exploration exercises.

CHAPTER 3 Historical Development Chapter Overview To better understand the current U.S. labor relations system and its future challenges, this chapter presents important events, organizations, and strategies from the history of U.S. labor relations. Two related yet distinct types of historical elements are emphasized throughout this chapter: events and organizational strategies. Industrialization changed the face of the traditional workforce. People moved from fields to factories and suffered long hours, low wages, and poor working conditions during the rise of big business. The first unions were local in nature, focusing on a single skilled occupation, such as printers and carpenters. Railroads then dramatically affected how products were shipped. After businesses began to grow and function on a national scale, so did the unions. It wasn‘t long before organized labor saw the need for national union federations. Conflict and violence became a common theme in the late 1800s to early 1900s. The Great Uprising of 1877, the Haymarket Tragedy, the Homestead strike, and the Pullman strike are all discussed in detail. The Knights of Labor made a concerted effort to replace capitalism with a 1-30 Copyright © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

system of producer cooperatives in which producers owned and controlled businesses. However, their overall philosophy did little to address everyday working issues. Therefore, the American Federation of Labor (AFL) was created. The Industrial Workers of the World was subsequently created as a militant alternative to the conservative business unionism philosophy of the AFL. The Congress of Industrial Organizations was created to pursue unionization of the mass manufacturing industries through industrial unionism. Each of these major organizations, as well as the unionism philosophies of each and their struggles are illustrated. Unions and employers have a longstanding, conflicted relationship. Strikes and anti-union strategies play tug-of-war. Roosevelt‘s New Deal program led to the Wagner Act and the government became supportive of union organizations and bargaining. World War II ended the mass unemployment problem, but when the war ended, intense strikes erupted. The chapter also covers important themes from the postwar period—the cementing of a bureaucratic model of unionism in the 1940s and 1950s, early struggles with the Communist issue and corruption in the 1950s, the Civil Rights movement in the 1960s, the oil crisis of the 1970s, and the firing of the air traffic controllers and the use of strike replacements in the 1980s. The labor movement at the beginning of the 21st century is still struggling, but studying labor history provides the needed background for understanding how labor relations has gotten to where it is today, and provides insight into what the future of U.S. labor relations might hold.

Lecture Tips I cover U.S. labor history in two class sessions: one class on the pre-New Deal organizations and another class on events and the development of the CIO. Motivate studying labor history with three facts: 1. The U.S. labor relations system, including both laws and union strategies, developed over the past 200 years of labor history so understanding today‘s system requires understanding this historical evolution. 2. Unions continually emphasize historical events and, therefore, history directly shapes current labor relations (for example, the UAW continues to celebrate the General Motors sitdown strike). 3. Looking at historical organizations can provide insights into future alternatives for U.S. labor relations. For the class on the pre-New Deal organizations, I find it difficult to deliver an engaging lecture on these organizations. So I instead structure most of the class time around small groups of students (typically 2-3 students) working on a worksheet, ―The Rise of National Union Organizations in the United States, 1865 – 1920.‖ This worksheet focuses on four organizations: the National Labor Union, the Knights of Labor, the American Federation of Labor, and the Industrial Workers of the World. There are a number of categories, such as strikes or organizational structure, each of which has four choices (one for each organization). The worksheet provides some philosophical statements for each organization, and the students must think which philosophical statement is the most consistent with each choice in the given categories. This can be a nice vehicle for getting students actively involved in thinking about these organizations and their contrasts. It usually takes about 20 minutes to de-brief this exercise, to calculate how much class time can be devoted to completing the worksheet. During this group time, circulate among the groups to provide hints and encouragement. Indeed, in the beginning of the exercise, the students often feel lost and don‘t really see the point. But give them some hints to get them going (keep them going), and I find that it works really well. The student worksheet (for copying and distribution in class) as well as a Teaching Notes version can be found in the ―Instructor Resources‖ section of the textbook‘s site in Connect (http://connect.mheducation.com). The Teaching Notes includes tips that you can use as hints and to explain the answers during the de-brief. It is also included at the end of this document. For the class on events and the CIO, try to convey a broad sense of the violence and importance of the struggles. The lecture can be greatly enriched by mixing video clips into the lecture at appropriate points. For example, start by briefly talking about the Great Uprising of 1877 and the Haymarket Riot. Then set the stage for the Homestead Strike and show an excerpt from ―The River Ran Red‖ (Mon Valley Media 1993), which covers the construction of Fort Frick and the battle with the Pinkertons. Follow this with a discussion of the Pullman Strike and other events. Another video you can use is ―With Babies and Banners‖ (New Day Films (1978), which focuses on the role of the Women‘s Emergency Brigade during the General Motors Sit-down strike. To 1-32 Copyright © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

set the stage for this video, start with the mismatch between the AFL‘s model of craft unionism and mass manufacturing (as illustrated by the failed 1919 steel strike), and then turn to the conflict within the AFL in the early 1930s between supporters of craft unionism and industrial unionism, which culminates in the fight at the 1935 AFL convention and the formation of the CIO. Both films are available on YouTube: 

―The River Ran Red‖—a documentary on the Homestead strike https://battleofhomestead.org/bhf/the-river-ran-red/



―With Babies and Banners‖—a documentary on the Women‘s Emergency Brigade during the General Motors sit-down strike. https://www.youtube.com/watch?v=q4n9vQZEza0

Lecture Outline (if following the text rather than the above suggested approach) Learning Objectives 1. Understand why workers have tried to form unions throughout U.S. history and the influences on their successes and failures. 2. Identify the major events in U.S. labor history, including what happened and why each event is significant. 3. Compare the major organizations in labor history and their contrasting strategies, including labor strategies for promoting collective action among workers and business strategies for discouraging or repressing such action. 4. Understand how studying the historical record deepens our comprehension of the current labor relations system and alternatives for reform. The current U.S. labor relations system is a product of history, some of which is relatively recent, such as the breakup of the AFL–CIO in 2005, whereas other aspects might seem like ancient history, such as the Great Uprising of 1877. Every student of labor relations should be aware of the major events in U.S. labor history. These events often reveal the leading issues and conflicts of an era, and they altered the course of labor relations. A broad historical investigation therefore provides the opportunity to consider a wider range of organizational strategies than currently exists in 21st-century labor relations. This wider analysis sharpens our understanding of each organizational strategy while broadening our ideas for future options. Consideration of major events and organizational strategies in the history of U.S. labor relations 1-33 Copyright © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

also illustrates the twin roles of the environment and individual choice that are so important for understanding outcomes. The historical development of U.S. labor law has a rich fabric of events, organizations, and strategies that weave together with social, economic, business, and labor history to show the historical development of the U.S. labor relations system. I.

From Local to National Organizations A. Most workers today are employees selling their labor for a wage or a salary. Only about 10 percent are self-employed. B. Half of employees today work for large organizations with 500 or more employees. These patterns are the result of tremendous, tumultuous economic and social changes that occurred in the 1800s—changes typically summarized as ―industrialization.‖ C. At the end of the 1700s, a large majority of free people were self-employed as farmers, shopkeepers, blacksmiths, shoemakers, and the like. D. Some of the changes that occurred in the nature of work and of industrial society include the following: 1. Working for a paycheck became widespread. 2. Fixed working hours and days, punctuality, and constant work effort replaced autonomous work habits. 3. Business became ―big business‖ characterized by hierarchical, centralized control and concentrated wealth and power. E. The roots of the modern labor relations system lie in these massive changes in the nature of work and of industrial society. F. The forms and functions of labor unions paralleled the changes in work and business organization. G. The first permanent unions in the United States were local and focused on a single skilled occupation—shoemakers, printers, carpenters, and tailors. H. The importance of the legal and economic environment for labor relations is a universal theme from the 18th to the 21st centuries. I. As business organizations became larger and more national in scope, so too did labor unions. J. National unions began to develop in the 1850s—necessitated by the ability of manufactured goods to be shipped via railroads, and likely facilitated by the ability of union leaders to travel via railroads. K. The National Labor Union, founded in 1866, was one of the first national labor federation in the U.S. which represented unions from different occupations or industries; L. Some of the features of the National Labor Union include the following: 1. Although it lasted only six years, it established a precedent for the labor movement by uniting diverse unions into a single federation. 2. It emphasized political activity to bring about legal reform. 3. It campaigned for the eight-hour working day (rather than the 10-or-more-hour day 4.

common at the time) through maximum hour legislation It favored currency and banking reform, women‘s suffrage, and ultimately a national