ch 15 union role

deferred wage inc

negotiated at initial contract with timing and amt specified

COLA

periodic adj based on changes in CPI

impact of unions in wage determination

general wage and benefit levels, structure of wages, nonunion firms -spillover effect, wage and salary policies and practices in unionized firms

reopener clasue

specifies wages will be renegotiated at a specified time or conditions

Four explanations for the decline in unions.

Declining industries are unionized, growing industries less so. Workers do not see unions as a solution. Reduced union organizing efforts. Management is taking an increasingly hard stance against unions in general and union demands in particular.

union impact on general wage levels

Do unions raise wages? Making comparisons is difficult due to measurement problems. Ideal situations rarely exist. One strategy is compare firms within the same industry at different levels of unionization. Another strategy is compare two industries that vary dramatically in level of unionization. The Bureau of Labor Statistics has data on unionized and nonunionized firms. The best conclusion about union versus nonunion wage summarizes 114 studies. Unions do make a difference in wages; across all studies and all time periods. The size of the gap varies from year to year. Union employees in the public sector earn about 22% more than nonunion workers. There are some large variations across unions, depending on the occupation. Wage concessions have become more prominent. Experts claim these concessions reduce the union workers' advantage.

Unions and Alternative Reward Systems

Lump-sum awards are one-time cash payments, not added to base wages. One-third of contracts offer these awards. Employee stock ownership plans (ESOPs) A company under intense competition may control base wage by giving employees part ownership. Pay-for-knowledge plan Pays employees more for learning a variety of different jobs or skills.-Unions may favor these plans as they make each worker more valuable, and less expendable. Gain-sharing plans align workers and management to streamline operations and cut costs. Cost savings are split between the organization and the workers. Unions delay taking a stand until real costs and benefits are apparent. Advantages of profit sharing plans is debatable. Saving and creating jobs is rapidly becoming top priority.

wage adjustment provision

Multiyear contracts make provisions for wage adjustments. Three major ways these adjustments might be specified. deferred wage reopener clause and cost of living adj

Role of Unions in Wage and Salary Policies and Practices

basis of pay, occupation-wage differentials experience/merit differentials other differentials vacations and holidays wage adjustment provisions Most contracts specify hourly and overtime pay, premium pay, and pay schedule. The basis of pay. Contracts usually specify occupation-wage differentials. A single rate prevails within occupations. Though rare, some contracts specify a single standard rate for all jobs. Agreements may specify wage ranges. Seniority moves workers through the range. This process is automatic progression. Less common, is moving employees through the wage range based on merit. Disputed merit appraisals may be grieved. A third method of moving through the range is to combine automatic and merit progression. Automatic up to midpoint, merit-based thereafter. Other contractual differential provisions. Different pay for employees in different geographic regions, and cost of living. Some contracts provide for part-time and temporary employees. Some pay above full-time wages, some below. **Vacation and holiday entitlements are frequently found in labor contracts.

spillover effect

employers avoid unionization by offering wages, benefits, and conditions won in unionized firms. Management avoids union 'interference' in decision making and workers enjoy rewards. Occurs less often as union power diminishes

Structure of wage packages

two dimensions: the division between direct wages and ee benefits the evolution of two tier wage pay plans Unions add 30 - 40% to benefits. Unionization means higher expenditures. 213% higher pension and 136% higher insurance. Two-tier wage pay plans differentiate pay based on hiring date. For management, wage tiers can be used as a cost control strategy to allow expansion or investment, or as a cost-cutting device to allow economic survival

Workers show strong interest in joining a union when:

workplace relations are bad, management is not trustworthy, or workers feel they have little influence over decisions affecting them. Unions may be down, but not out. A changing stance of unions is two-tier wages.