HRM textbook

496 PART 5 EMPLOYEE RELATIONS
1 Give a brief history of the
American labor movement.
THE LABOR MOVEMENT
Even with the pressures they ve been under the past few years, about 14.7 million U.S.
workers still belong to unions about 11.9% of the total number of men and women
working in this country. 3 Many are still blue-collar workers. But workers including
doctors, psychologists, graduate teaching assistants, government office workers,
and even fashion models are forming or joining unions. 4 In some industries
including transportation and public utilities, where more than 26% of employees are
union members it s still hard to get a job without joining a union. 5 Most union
members are in the public sector, as opposed to the private sector. 6
Furthermore, it s a mistake to assume that unions affect employers only
negatively. For example, perhaps by professionalizing the staff and/or systematizing
company practices, unionization may improve performance. Thus in one study,
heart attack mortality among patients in hospitals with unionized registered nurses
was 5% to 9% lower than in nonunion hospitals. 7 The accompanying Strategic
Context feature provides another illustration of the potential positives of good
union-management relations.
THE STRATEGIC CONTEXT
The Anti-Walmart
Its not easy competing with Walmarts always-low prices, but Costco may have found a
way. Walmart Stores Sams Club is actually second in sales to Costco. How does Costco
stay ahead? In part with strong labor relations, low employee turnover and liberal
benefits. 8 For example, Costco pays about 90% of the health insurance costs of its
over 90,000 domestic employees, about $6,000 annually per employee. 9 And its
relations with labor unions are comparatively benign. Costcos HR strategy is to fend off
Walmarts low wages and labor costs by eliciting higher productivity and better service
from its employees. The strategy seems to be working. Costcos sales per employee are
about $500,000 a year versus $340,000 at Sam s Clubs. 10 Turnover among those
employed with the company at least 1 year is about 6%, far below the retail industry
average. 11 Aligning its labor relations strategy with its overall strategic aim to compete
on the basis of better productivity and service seems to be working for Costco.
In any case, support for unions has always ebbed and flowed in America, and today
pressures are building against unions. For example, critical budget problems following
the 2008 2010 recession in states such as Wisconsin and New Jersey prompted those
governments to reduce public employees numbers, pensions, and pay. The number
of U.S. workers belonging to unions actually declined by 612,000 from 2009 to 2010.
We ll look at unions and dealing with them in this chapter.
Why Do Workers Organize?
Experts have spent much time and money trying to discover why workers unionize,
and they ve proposed many theories. Yet there is no simple answer to the question,
partly because each worker probably joins for his or her own reasons.
However, workers don t unionize just to get more pay or better working conditions,
though these are important. For example, recent median weekly wages for
union workers was $917, while that for nonunion workers was $717. 12 Union workers
also generally receive significantly more holidays, sick leave, unpaid leave, insurance
plan benefits, long-term disability benefits, and various other benefits than
do nonunion workers. Unions also have been able to somewhat reduce the impact
of (but obviously not eliminate) downsizings and wage cuts in most industries. 13
Two other factors employer unfairness and the unions power are also important.
In one Australia-based firm, researchers found that individuals who believe that
the company rules or policies were administered unfairly or to their detriment were more
likely to turn to unions. 14 But, to vote pro-union, the employees also had to believe
the union could improve their wages, benefits, and treatment.