The history of labor unions is akin to interest groups evolution in the country. U.S. Unionization in the post world war era contributed to the creation of jobs, pay rise, workers' rights, and also stabilized the economy in short-term and long-term. Several factors have affected the functions of unions. Amongst these factors are globalization and the impact of organizational structures and strategies. The workplace has become global, and the work dynamic has changed to conform to the strategies of organizations. There is a difference between what employers want and what most unions offer. The youth do not see most unions as beneficial. Most high skilled employees do not join unions, and most companies want high skilled workers (Abowd & Henry, 1982). A cultural shift from one generation to another is critical to the role that unions play in America. Companies understand the impact of unionization in their workplace. Thus, more than anything else, unions serve their members interests than the business or economy. They do not appear to be vibrant as they use to in the past century. The proliferation of service industries changed the nature of unions in the U.S.
Competitiveness in the global business environment is stronger now than it was in the last generation. The pricing of products to make a profit by companies depends on factors that include unions pay. Wage increase demands by unions may put companies out of business if prices move higher. Also, if a company does not have a competitive advantage, the effect of unionization will be less. Unionized organizations decrease investment opportunities through taxation for the benefits of its members. Less investment affects employment and reduced employment impacts the economy negatively. Unionized companies may increase pay but often limit work opportunities for their profitability and competitiveness.
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A generational culture change on U.S. Unionization has both micro and macroeconomic implications. On the micro-economic level, unions act as middle-persons in contract negotiations. This function has a broad impact on the American employees and the employers. They become the interface between workers and employers such that no changes can place without their consent. The financial cost of attorney fees causes employers to do a cost-benefit analysis before making alterations in the workplace. This practice hinders innovation, and best workers not often get a promotion because unionization works on seniority even when the seniors are underperforming. Through unions, employers find it difficult to promote and incentivize employees because of their performance (Budd & In-Gang, 2000). Thus, unions perform well in spreading wages across its members reducing inequality, whether competent or not. From the employer perspective and the economy, the cost affects prices and overall workers performance.
The macroeconomic implications reflect the country's GDP and employment status. The general perception is that America's overall manufacturing employment has dropped over the decades. Findings reveal otherwise. Nonunionized manufacturing employment increased over the same time that unionized construction fell (Barry & David, 2009). This finding agrees with the results from research done by labor and economists that unionization tends to affect the economy by influencing employers' choice for the type of workers and pay they will want to give their employees. There is a counterargument that demonstrates that unionization is better for the economy.
The demand for skill jobs increases as globalization becomes a reality. The U.S. economy is not in short supply of a workforce but a shortage of skilled labor force. The evidence to support this fact is broad according to research. The demand for skills will continue to increase as technological innovation, which is the primary factor that drives globalization is rapidly transforming the workplace. According to the Department of Labor (1999) "The demand for skills is bringing about changes in the way some unions and employers engage in collective bargaining. Technology, and the skills needed to master it, is taking their rightful place on the negotiating table" (p.6). As stated above, when unions negotiate they do it for their members and not necessarily for the employers or the economy. This study by the Department of Labor found that unionized workers earned more than nonunionized by some margin.
An estimation establishes that the baby boom generation of the 1950s forms about 47% of the U.S. workforce. Also, they constitute a generation that strengthened the America's unionization system. With this group dwindling in number, and the effects of technology, educational attainment, and culture, the future of unionization is bleak. The elements of promotion, work performance, education, and skill are overriding the bargaining power of unions. It is because employers look at government regulations, the level of competition, sustainability, and profit in offering jobs to people. If the union's interest puts the company in a position of less investment, profit, and competitive advantage, it will prefer to hire nonunionized employees that will offer skilled services.
Moreover, the job seeker of this generation is less incline to join a union. The younger generation has less interest in labor unionism. This lack of interest is also due to their versatile nature. They have developed different skills to help them adapt to different job situations through technology and the competitiveness in the workplace. The firmness of labor unions' regulations may also be a factor that weakens their ability to attract the new generation of workers or employment seekers.
Labor unionization in the U.S. will continue to play its significant role in the workplace. However, these functions are beginning to wane because of the impact of globalization and the resultant shift to dependence on a high skilled and versatile workforce. The degree of competition in the business space is causing more employers to rely on nonunionized employees with skills that are adequate in their service or work performance. Thus, the implication is that unionization will be less effective with the generational culture changes if nothing is done to attract the younger generation.
References
Abowd, J., & Henry F. (1982). "Job Queues and the Union Status of Workers," Industrial and Labor Relations Review , Vol. 35, No. 3 pp. 354-367.
Barry T. H., & David A. M. (2009). “Union Membership and Coverage Database from the Current Population Survey” Retrieved from http://www.unionstats.com
Budd, J. W., & In-Gang Na. (2000). "The Union membership Wage Premium for Employees Covered by Collective Bargaining Agreements," Journal of Labor Economics , Vol. 18 , No. 4. pp. 783-807.
U.S. Department of Labor. (1999). Futurework-Trends and Challenges for Work in the 21th Century. Retrieved from https://www.dol.gov/dol/aboutdol/history/herman/reports/futurework/execsum.htm
