Outline

1
Outline

• A. Sectoral Organizing and the Trigger?
• 1. Union Membership and Dues
• 2.Structure of Organized Labor
• 3.Bargaining Structures
• 4.The Bargaining Process
• 5.Bargaining Subjects
• Mandatory, Permissive and Illegal

• Returns
• Review questions
• Do more than 10 and Ill count the 10 highest
  grades

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News of the Class

• Railway Labor Act governs airline workers
• Note current fight over how union votes should be
  counted

• Labor Mural in Maine sparks Controversy

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(No Transcript)
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Are we clear on these ideas Taking wages out of
competition and triggers

•  5. Lerner argues that unions need to stop
  organizing workplace by workplace, and begin
  organizing entire industries at once in order to
  takes wages out of competition. Try to explain
  how organizing an entire industry at once takes
  wages out of competition, being sure to discuss
  how this changes employer behavior toward unions.
• 6. In his opening paragraph, Eimer suggests that
  SEIU has developed a strategy that seeks to
  organize whole labor markets at once using a
  trigger mechanism which is sensitive to the
  competitive pressures employers face when
  confronted with the costs of unionization(Eimer
  2008 1). After reading the article, please
  explain what that statement means. Be sure to
  discuss what is meant by competitive pressures
  and trigger mechanisms.
• 7. Eimer argues that trigger mechanisms reduce
  employer opposition to unions. How? What evidence
  does he provide to support this assertion?

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The Organizing Process

• Collective Bargaining cannot take place until a
  bargaining representative has been certified
• To gain certification, unions pursue one of two
  paths
• Path 1 Normally, a union must win an election to
  be certified as the exclusive representative of
  the employees
• Path 2 An employer may voluntarily recognize a
  union if the union can demonstrate that it
  represents a majority of the employees

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NLRA and the Duty to Bargain

• Since the NLRA was passed in 1935, Employers are
  obligated to recognize and bargain if union is
  certified by NLRB
• 1 year duty to bargain in good faith
• About 50 percent of the time, no first contract
  is reached
• After 1 year, employer can withdraw recognition
  if proves union does not have majority support
• Decertification election
• This is a problem for unionswhich they are
  trying to address legislatively through EFCA

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One Important Subject of Bargaining is Membership

• Union shop
• within set period of time after hire, employees
  required to join the union as a condition of
  employment
• Agency shop
• Requires that all employees in the bargaining
  unit who do not join the union pay a
  representation fee in lieu of union dues to help
  defray the organizations expenses
• Logic
• Workers get benefits of unionization, so must
  help pay for the costs that the union occurs in
  bargaining and enforcing the contract
• Right to work laws
• Workers can not be required to join union as a
  condition of employment
• 21 states adopt such lawsprimarily in the South
• WIs new law

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Right to free ride or Right to Work

• Unions are only certified when majority indicate
  desire for organization
• Unions are required by law to represent all
  workers so all workers should have to support
  organization
• Company rule about unions is no different than a
  rule about proper attireIf worker does not like
  rule they are free to work elsewhere or to work
  to decertify the union

• Individual workers should not be forced to
  support an organization that they do not want to
  support
• Decertification is a difficult process

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The Conflict in WI
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The Conflict in Indiana How would you vote?
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Union Membership Means Union Dues

• Members Pay Union Dues To Local
• Average dues are 2 hours of pay per month
• Local unions keep ½
• Spent on overhead, enforce contract, bargain,
  organizing, strike support etc.
• Sometimes for paid staff
• NJEA Sheet

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Union Membership
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Union Membership Means Union Dues

• Members Pay Union Dues To Local
• Average dues are 2 hours of pay per month
• Local unions keep ½
• Spent on overhead, enforce contract, bargain,
  organizing, strike support etc.
• Sometimes for paid staff
• Where does the other ½ go?

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So youre in a unit, where do those dues go?

• Local Pays Per Capita Dues to
• Per-capita x dollars or cents per member
• State Union- bargaining help, grievance help,
  research, education, training, politics

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So youre in a unit, where do those dues go?

• Local Pays Per Capita Dues to
• National Union-bargaining help, grievance help,
  research, education, training, politics,
  lobbying, organizing

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So youre in a unit, where do those dues go?

• Local May Also Pays Per Capita Dues to
• State Local AFL-CIO- education, training,
  publicity, politics, lobbying

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So youre in a unit, where do those dues go?

• National Union Pays Per Capita Dues to
• AFL-CIO research, education, training, politics,
  lobbying, organizing

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O.KBack to the Local Union

• Remember NLRB decides what the bargaining unit
  will be on a case by case basis
• Key mutuality of interest in wages, hours and
  working conditions
• Greater the mutuality greater likelihood that
  members will agree on things, and thus CB will
  work better
• Formal bargaining structure is defined as the
  employees and employers who are legally bound by
  the terms of the agreement
• About 180,000-194,000 agreements exist in the
  U.S. (Katz Kochan, 2002)

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Bargaining Units Vary in Type

• Need to be attentive to scope of union or
  employee interests in the unit
• These interests can be narrow craft
• Cops, Firefighters, Teachers, Electricians
• Broad industrial or multi-skill
• Grocery, Auto, Steel
• Katz Kochan, 2002

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Bargaining Units Vary in Type

• Need to be attentive to scope of employer
  interests in the unit
• Can be multiemployer (centralized)
• Bituminous Coal Operators Association
• Association of many coal operators
• New York Realty Advisory Board

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Centralized Bargaining for Multi Employer and
Craft Union
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Centralized Bargaining Multi Employer
Industrial Union
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Types Examples of Bargaining Structure
Multi-employer (Centralized)
Craft (narrow) Construction Long shoring
Industrial/Multi-Skill (Broad) Coal Grocery
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Bargaining Units Vary in Type

• Need to be attentive to scope of employer
  interests in the unit
• Can be multiemployer (centralized)
• Bitumionous Coal Operators Association
• Single-employer, multi-plant
• Ford operations in America

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Single Employer, Multi Plant
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Types Examples of Bargaining Structure Scope
varies
Multi-employer (Centralized) Single-Employer- Multi-Site
Craft (narrow) Construction Long shoring Airline Teachers Firefighters State Troopers
Industrial/Multi-Skill (Broad) Coal Grocery Auto Steel
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Single Employer Multi Plant Pattern Bargaining

• Pattern Bargaining
• A national union strives to establish equal wages
  and benefits from several employers in the same
  industry.
• One company serves as model, others pushed to
  follow pattern
• Treaty of Detroit as Example
• UAW typically targets most profitable firm at the
  momentcuts deal and tries to get other two to
  follow pattern
• Target Fordget GM and Chrysler to follow
• Becoming less and less common as unions become
  weaker

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Bargaining Units Vary in Type

• Need to be attentive to scope of employer
  interests in the unit
• Can be multiemployer (centralized)
• Bitumionous Coal Operators Association
• Single-employer, multi-plant
• Ford
• Single-employer, single plant (decentralized)
• Bronx Motts Apple Sauce Plant and Local Union

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Single Employer, One Union
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Types Examples of Bargaining Structure Scope
varies
Multi-employer (Centralized) Single-Employer- Multi-Site Single Employer-Single Site (De-centralized)
Craft (narrow) Construction Long shoring Airline Teachers Firefighters State Troopers Electricians in a small plant Lawyers for the City of Philadephia
Industrial/Multi-Skill (Broad) Coal Grocery Auto Steel State Govt. Industrial Union in a small plant Chester Public Sector Workers
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Bargaining Units Vary in Type

• Need to be attentive to scope of employer
  interests in the unit
• Can be multiemployer (centralized)
• Bitumionous Coal Operators Association
• Single-employer, multi-plant
• Ford
• Single-employer, single plant (decentralized)
• Eimer Blankets
• Which model does Stephen Lerner argue allows for
  stronger unions that can win better contracts for
  its workers?
• Katz Kochan, 2002

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The Decentralization of Bargaining Structure in
the United States

• Compared to other countries, the U.S. has a
  highly decentralized bargaining structure
• Multi-employer bargaining is not common in US
• In many European countries, contracts cover
  entire industries or broad regions
• European employers are now trying to change
  thisunions are resisting
• Take a look at the following slides

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Industry Wide Bargainingwith Inclusive
Industrial Unions Germany
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Societal Bargaining with National Labor
Federation Comprised of Industrial Unions Sweden
for much of 20th century
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The Duty to Bargain

• Whether new union or existing union, bargaining
  must occur in Good Faith surface bargaining
  not permitted
• Surface bargaining
• going through the motions with no intent on
  reaching a deal
• Both parties have an obligation to bargain in
  good faith with an intent to reach an agreement
• Parties dont have to agree or be fairbut have
  to put forth a serious effort
• The New York Times reports owners have gone
  before the National Labor Relations Board,
  claiming the players union did not bargain in
  good faith

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The Three Stages of The Bargaining Process
5-4
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Bargaining

• 2. Chaison notes that collective bargaining has
  two faces it is first about getting agreement
  before going to the bargaining table and then
  getting agreement at the table. Please explain
  what he means by the first part of that sentence
  it is first about getting agreement before going
  to the bargaining table. Be sure to provide an
  example to illustrate your explanation.

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The Three Stages of The Bargaining Process
5-4
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The Three Stages of The Bargaining Process
5-4
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The Three Stages of The Bargaining Process
5-4
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Bargaining

• Exchange of economic and non-econmic demands
• 1. Briefly explain the difference between
  distributive and integrative bargaining. Be sure
  to provide an example of each.

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Bargaining

• 1. Briefly explain the difference between
  distributive and integrative bargaining. Be sure
  to provide an example of each.
• Distributive deals with distribution of scarce
  resources, usually pay and benefits (Chaison
  2007 105)
• Zero sum meaning if workers get 3 raise, thats
  money the firm loses
• Integrative deals with areas in which both
  parties gain together because they integrate
  their goals to solve problems jointly (Chaison
  2007 105)
• Freeman emphasized thiswork together to solve
  staffing needs
• Posturing, Exchanging proposals etc
• SEIU strategy on revealing its wage demand for
  Janitors in NYC?

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Bargaining

• Posturing, Exchanging proposals etc
• SEIU strategy on revealing its wage demand?
• The union, Local 32BJ of the Service Employees
  International Union, has inserted a big question
  mark into the bargaining by announcing that it
  will not tell management negotiators how large a
  raise it wants until Dec. 27, five days before
  the contract deadline (Greenhouse 2007)

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Subjects of Bargaining

• 1958 Supreme Court Case known as Borg Warner
• Established 3 Categories of bargaining subjects
• Mandatory, Permissive, Illegal
• Lets examine each one

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Mandatory Subject

• A party may insist on its inclusion and the other
  party cannot refuse to discuss it
• Wages, hours, working conditions
• Example Christmas Bonus
• Employees see as wages
• NLRB ruled it a mandatory subject
• Legal impasse occurs when parties cant agree
• Impasse?

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The Negotiation Process

• Impasse
• Point of negotiation where no compromise appears
  achievable. (Katz Kochan, p.461)
• Dead-lockstalemate
• Further bargaining seems futile
• Reasons for Impasse
• interests of parties have not been reconciled
• one party has no intention of settling
• union membership rejects proposed contract

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Permissive Subject

• a party must withdraw it from bargaining if the
  other party does not voluntarily agree to discuss
  it
• concessions seldom made on permissive subject
• Cannot bargain to impasse, or strike
• Pensions for employees are mandatory
• Pensions for Retirees are permissive
• They are no longer employees under the NLRB

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Illegal Subject

• Can not be bargained over because it violates
  public policy or is inconsistent with NLRA
• Hot Cargo
• demand that union not handle goods from employer
  involved in a strike

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The Three Stages of The Bargaining Process
5-4
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Outline

• Impasse
• Negotiating Wage Adjustments
• Ability to Pay, Productivity, Comparison
• Types of Wage Adjustment
• Lump Sum, COLA, Profit sharing
• News of the class

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Social Welfare Spending, (as pct. of gross
national product)
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Federal Budget
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Funding the Welfare State Household Tax Wedge,
2003
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(No Transcript)
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Health Care Spending Compared
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Union Help Facilitate the Great Compression
the creation of the American Middle Class
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Inequality is Highest in the US

• Ratio of Top 10 to Bottom 10

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Union Density Compared

• Union Density, 2002
• US was 13.3

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The Three Stages of The Bargaining Process
5-4
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The Negotiation Process

• Can either reach an agreement
• Usually goes to union members to vote up or down
• If voted down back to bargaining table, or
  declare an impasse.

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Impasses Can Be Resolved 2 Ways

• 1) If an impasses is reached parties can go to
  mediation or arbitration
• Have an outside party try to broker an agreement
• Private sector voluntary
• Public sector often mandated
• 2) Or..Management can implement its last offer to
  the union
• Union must then accept it or strike
• Love it or shove it!
• More on strikes, lockouts and such next week

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Collective Bargaining

• Broad Range of Topics Are Negotiated
• Well Consider Some of the Big Areas
• Wages
• Health Care
• Pensions

• Mandatory
• Rates of pay
• Wages
• Hours of employment
• Overtime pay
• Shift differentials
• Holidays
• Vacations
• Severance pay
• Pensions
• Insurance benefits
• Profit-sharing plans
• Christmas bonuses
• Company housing, meals,
• and discounts
• Employee security
• Job performance
• Union security
• Management-union relationship

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WagesA Bread Butter Issue

• For Employees Wages Involve
• Standard of living
• Ability to plan for retirement
• Measure of self worth
• For Employers Wages Involve
• Largest Single Cost Factor
• Competition with other firms

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Negotiating Wage Rates

• Within context set by law, unions and firms
  negotiate wage rates
• Good bargaining requires good information about
  financial status and position of firm
• Employer has access to financial data about firm
• Ostensibly knows its situation
• Union at a Disadvantagemay or may not have
  financial information
• Knows needs of members
• Often less sure on status of firmCan get
  complicated

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Negotiating Wage Adjustments

• Getting Financial Information
• Firm is Unable to Pay vs. Firm Does not Want to
  Pay
• Publicly Trades Firms file 10ks with Securities
  and Exchange Commission
• Union negotiators can access to determine health
  of firm
• If firm has 1 plant no problem22 plants problem
• Privately Held Firms file no financial reports
• Can be trouble
• Trade PressInsider who will help
• Liability Suits that required financial info

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Wages Whats Fair?

• 3 Major Approaches Used By Union
• 1) Ability to Pay Company can afford raises so
  it should pay them
• Base claim on financial information
• Company is very profitable, they can pay more
• Firms response?

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Wages Whats Fair?

• 3 Major Approaches Used By Union
• Ability to Pay Company can afford raises so it
  should pay them
• Base claim on financial information
• Company is very profitable, they can pay more
• Firms response?
• Just because we can doesnt mean we should
• Money to shareholders, not to workers
• Money best used elsewhere

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Negotiating Wage Adjustments

• 2) Productivity employees should share in
  increased profits caused by greater productivity
• Labor, machinery/equipment, managerial ability
  create profit
• Employees entitled to fair share of increased
  profit
• Poses Interesting Problems for Unions
• What is fair? How calculate contribution of each?
  
• Measuring Productivity can be tricky?
• Easy in Auto output per hour value of goods
  produced divided by hours of labor
• Teacher, Sheriff, NurseMe? How measure?

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Negotiating Wage Adjustments

• 3) Comparison to Other Workers demand wages be
  adjusted to match those in similar workplaces
• Easiest argument for union to make
• Especially for local union leaders
• But all sorts of questions emergelike what
  should basis of comparison be?

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Negotiating Wage Adjustments

• Occupational Comparison but to what?
• Unionized Pepperoni Factory vs. other Unionized
  Pepperoni Factory
• or maybe to non-Unionized Pepperoni Factory
• or maybe to other factory in same Pepperoni
  Company
• Firefighter in NYC to Teacher in NYC
• Is this legitimate

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Negotiating Wage Adjustments

• Geographical Comparisonbut to where?
• Teacher in town A to Teacher in town B
• Pepperoni Factory workers to other workers in
  area
• Pepperoni Factory in WI vs. Pepperoni Factory in
  NJor AL
• Garment Factory in Philly vs. Garment Factory in
  Honduras

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Geography and Union Density

• Manufacturinga global economy puts some unions
  in a bind
• Firms must meet the China price and many will
  try to do it by reducing labor costs
• Service Sector is different
• Walmart or Aramark cant hire people in China to
  do worknor can they move their operations
• If unions can raise density in a smaller
  geographic region, they can increase their power

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Geography and Density

• Nowadays we represent 70 to 90 percent of
  building service workers in these cities (Boston,
  Denver, Washington). That means a lot in terms
  of bargaining power.
• Stephen Lerner, SEIU
• Questionagain. How does a high level of union
  density in an industry in a particular geographic
  region permit the SEIU to bargain better wage
  increases and better benefits?

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Union Density Matters

• Higher Union density in an industry region
  translates into increased bargaining power for
  union
• During bargaining, the low wage example does not
  exist
• If basis of comparison is unionized, union is at
  an advantage
• Level playing field means employers all firms
  will incur the same costs

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Density Matters for Collective Bargaining Nursing
Homes
California Bay Area and Los Angeles
Union Density
Wages
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Bay Area
12.17
8
Los Angeles
8.75
Source SEIU, United We Win.
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Density Matters for CB Commercial Building
Services
Los Angeles
Union Density
Wages
80
7.07 insurance
Source SEIU, United We Win.
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Retail (Acme, Shoprite, Walmart)

• Union Density in retail, 1993 26
• Members of retail union twice as likely to have
  health insurance
• Members of retail union more than twice as likely
  to have pension
• Retail Union Wage Premium is 28
• ButWages Benefits Directly Related to Density
  in Region
• 10-20 union density .03 to .36 cent wage
  premium
• 60 to 70 union density 1.89 to 2.35 wage
  premium

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Other Forms of Wage Adjustment

• Cost of Living Adjustments (COLA)?

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Adjusting Pay COLAs

• Cost of Living Adjustments (COLA)?
• Negotiated compensation increase given an
  employee based on the percentage by which the
  cost of living has risen
• Typically a cents per hour increase (4xs a year)
• Measured by CPI market basket of goods
• usually CPI-U
• (captures 80 workers)
• Consumer Price Index Home Page

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COLA

• Main benefits of COLA for workers?

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COLA

• Main benefits of COLA for workers?
• Changes base pay
• Why is this important for workers?
• Pegs pay to inflation
• Raises become real raises
• Main problem for Employers

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COLA

• Main benefits of COLA for workers?
• Changes base pay
• Why is this important for workers?
• Pegs pay to inflation
• Raises become real raises
• Main problem for Employers
• Doesnt take firms performance into
  consideration
• Must pay COLA even if firm is having financial
  trouble

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COLA Trends

• Use of COLA decreased over last 25 years
• Decline of COLAfrom 60 to 28 of agreements

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Other Forms of Wage Adjustment

• One time Lump Sum Payment
• Increasingly popular with management. Why?

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Adjusting Pay Lump Sum

• One time Lump Sum Payment
• Increasingly popular with management. Why?
• Total cost during the contract is easier to
  predict
• Do not increase hourly wage rates
• Workers Accept, but problems?

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Adjusting Pay Lump Sum

• One time lump sum payment
• Workers Accept, but problems?
• Does not effect base pay
• 100,000 2 raise 102,000 and next year
  starting base pay is 102,000
• 100,000 lump sum of 2000 102,000 BUT next
  years starting best pay is still 100,000

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Adjusting Pay Profit Sharing

• Workers receive a lump-sum payment in addition to
  regular wage
• Payment is based on negotiated formula
• Can get complicateda problem for local unions
• Found in 10 of CB agreements
• Management favors profit sharing paymentsWhy?

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Adjusting Pay Profit Sharing

• Management favors profit sharing payments
  becauseWhy?
• Profit Sharing
• Payment does not get made if company did not make
  a profit
• Not tied to inflation a measure which doesnt
  take companys performance into consideration
• Provides incentive to make company more
  profitable
• Lump sum, one time paymentAgainwhy is this good
  for employer?

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Adjusting Pay Profit Sharing

• Problems for Workers
• Lump sum does not go into base pay
• Profits may stagnate or decline in their firm
  while prices around them go up
• Saturn and UAW
• Wages stagnate, but kids college costs up 10

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Public Employees

• Many Aspects of bargaining are the samebut
  complicated by fact that workers are public
  employees
• Budgets funded by tax dollars so can be a source
  of tension
• School board, city council, governor
• Public Sector Unions often politically active
• Often very well organized and actively lobbying
  for increased budgets
• Adjustment Arguments Become More Complicated
• Ability to pay impacted by willingness to raise
  taxes?
• Comparisons to other districts? Union wants
  richer one, city a poorer one
• Comparisons to non union workers? 60,000 vs.
  25,0000
• Turnpike workers yesterday

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A Lot Going On.

• Indiana Governor took away the right for public
  sector workers to unionize
• NJ Christie obtained 2 percent property tax cap
• Will limit ability to raise property taxes,
  thereby limiting money for police, fire,
  teachers, city workers
• WI
• public employees will only be able to
  collectively bargain over wage increases no
  greater than inflation (BW 3/16/11)

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Next

• Collective Bargaining Subjects
• Pensions Health Care
• Grievance Procedures
• Strikes