Labor unions are considered to be very beneficial to employees because they advocate for their welfare over their working conditions collectively. The bargaining aims at moving economy in a better direction. Collective Bargaining is the process in which labor management representative bargain an acceptable labor agreement (Blair566). When employees bargain collectively, they get a chance to attach their benefits and wages to productivity gain of the overall economy of the state. A long standing labor organization is capable of improving the quality of future jobs. Collective bargaining results to better management and increased productivity (Blair567). Labor unions increase creation and retention of skills and offer information on what happens on the shop floor.
Labor unions enhance economic power. In most cases, employees do not have business option and, therefore, are disadvantaged in negotiating with the employer. Power in the business depends on the options each party possess and how badly they can get affected if they fail to make a deal. In many cases, employer has many options. For instance, it hurts an employee to be fired more than it hurts the employer if the employee quite the job since he can hire another employee easily. To rectify these imbalances of power in market, labor unions through the government impose rules and regulations on labor contracts that minimize the ability of the employer to dictate terms of the job agreement. Example of such rules includes; health rules, minimum wage rule, rules on working overtime and safety rules.
Labor unions protect workers against arbitrary management decisions. They give them a voice at the place of work and in the political arena. Many companies have cited the benefit of labor union on their business.
Labor unions also rectify the imbalance of power by creating semblance of equity in negotiating over the contract of employment. In circumstances where unions are strong, employers must develop a collective covenant with the employees if not so the employer will not have access to the labor force. It means workers have the right to punish the employer if he fails to meet the agreed term through strikes (Youngblood 577). Labor unions coexist with healthy levels of employment for different reasons. Labor unions can affect the economy in various ways. Apart from increasing workers' pay and benefits, they also raise the firm’s productivity, reduce worker turnover and act to coordinate workers’ compensation expectations with the aim of promoting steady growth. It means that, labor union improves the way the economy functions. Labor unions influence the primary source of the growth of employment, which is said to be an overall level of economic activity.
Labor union enhances Political power. They foster democratic participation and contribute to organic solidarities. Unions in the place of work organize activities and assist ordinary workers to get involved in several collective decisions within work. In many countries labor unions are involved in safety and health regulations, monitoring and evaluating working conditions and grievance procedures. Incase conflicts occur with the management, workers will experience these as collective battle; not as individual complaints. These solidarities facilitate high level of involvement in wider democratic politics (Youngblood 587).
A strong union builds a sense of connectedness and solidarity in people. It also solves important organizational issues. Labor unions offer information to their members on how to solve problems of rational ignorance on issues concerning politics. They lower individual cost of participation in active politics.
Labor unions give workers bargaining power that they require to negotiate critical improvements in their working conditions. Similarly, evidence shows that the union can achieve better pay for its workers and excessively increase the cost of business. Lastly, one can conclude that labor union are good and contribute greatly to the economy of the state.
Blair, Douglas H., and David L. Crawford. "Labor union objectives and collective bargaining." The Quarterly Journal of Economics 99.3 (1984): 547-566.
Youngblood, Stuart A., et al. "The impact of work environment, instrumentality beliefs, perceived labor union image, and subjective norms on union voting intentions." Academy of Management Journal 27.3 (1984): 576-590.