UNION ORGANIZATION

Union Organization

Union Organization

Labor unions are organizations formed by employees for the purpose of using their collective strength to improve compensation, benefits, and working conditions through bargaining; to bring fairness to the workplace through the provision of due process mechanisms; and to represent the interests of workers in the political process. Economists have traditionally viewed unions as functioning as labor market monopolies. Because they raise wages above the competitive levels set by the market, economists argue that labor unions create inefficiencies resulting in the loss of jobs and in greater income inequality in the workforce. For this reason, economists view unions as an undesirable interference in the operation of the market (Booth, 1995; Friedman & Friedman, 1980; Simons, 1948). However, some economists argue that in addition to their negative monopoly face, unions have a second, positive collective voice face. They further argue that, on balance, the positive impact of unions outweighs the negative (Bok & Dunlop, 1970; Freeman & Medoff, 1984; Reynolds & Taft, 1956).

Unions are formed by employees who desire to improve their compensation, benefits, and working conditions and to bring greater fairness and due process to their workplace. Employees recognize that unless they have unusual or unique skills or talents, individuals have very little influence with their employers and very little power to improve the conditions under which they work. However, by banding together, workers are able to exert collective pressure that is more likely to force an employer to make specific improvements in the workplace. This collective power can also be used to obtain improvements through the political and legislative processes.

Over the last 25 years, another perspective on unions, based on the writings of Hirschman (2007), but most effectively articulated by Freeman and Medoff (1984), has gotten significant attention and has influenced economists' views of unions in important ...