Hostess Brands is shutting down and 18,500 of its workers are temporarily losing their jobs given the Bakers Union of 6,700 workers went on strike. It’s safe to say thousands of Hostess employees are pissed off they will no longer get a paycheck until the owners find a buyer. Even then, there is no guarantee employees will still keep their jobs.
Walmart workers are planning a huge strike on Black Friday because they are complaining about low wages, poor working conditions, and bad benefits. If workers go on strike during the biggest shopping day of the year, there will undoubtedly be a loss of profits which will potentially lead to a drop in share price. In this scenario, nobody wins, especially consumers who are looking for deals.
Going on strike is an American tradition. We strike all the time here in San Francisco against everything and anything. It feels good to chant for your rights, especially if you can get paid to protest! Let’s talk about the pros and cons of labor unions.
ARGUMENTS FOR LABOR UNIONS
* Higher survival rate. With competition as cutthroat as ever thanks to globalization, companies are finding every way possible to cut down expenses. Labor is often the highest cost associated with running a business. By teaming up in force, each worker has a higher chance of survival as it’s harder to get singled out. Think of a shark and a school of fish analogy. Workers who feel threatened due to age, sex, or orientation may also survive longer under a labor union.
* Higher wages and benefits. A labor union’s bargaining power is much greater than the bargaining power of a single individual. This is especially true for younger employees and employees who are below average in performance. Mess with one, and you mess with all carries weight. The labor union has a team of wage specialists who actively do market salary research for the group to ensure everyone is getting paid properly.
* Duty to protect the weak. Some people are just naturally stronger, better, and smarter than others. A labor union allows for such gifted individuals to protect the less fortunate. If you believe it is the responsibility of the rich to take care of the most destitute, you are more inclined to believe in a labor union. Even the strong fall on hard times. Everybody needs a helping hand at some point.
ARGUMENTS AGAINST LABOR UNIONS
* Makes our companies less competitive. If a company has to pay artificially higher wages, then a company’s bottom line gets impacted. This is bad for management, shareholders, and anybody who investments in stocks or mutual funds. A weak company means less capital to hire and expand.
* May foster complacency. If you have a labor union always watching your back, you might stop studying after work to advance your knowledge and skills. With a backstop, you might forget about building multiple income streams. A labor union might demotivate you to find a new job, even if you are well aware your company is a sinking ship.
* Might not agree with the labor union. Seldom do we always agree on everything. If you were to ask the 6,700 member Baker Union at Hostess Brands to rewind time and not strike, maybe they would have been softer on their demands. Once you’re in the labor union, you can’t do anything outside the labor union for fear of retribution. For example, if you are caught working non-union wage side jobs as a plumber, you will be fined, booted, and ostracized.
THE GREEN GRASS GROWS
After about the 10th year of work, I began dreaming of joining a labor union. The finance industry is notoriously volatile and people get blown up during each economic downturn. A labor union could help minimize my risk of unemployment and allow me to rest easier. I was tired.
Unfortunately, I was never given the opportunity. I had to scratch, claw, and fend with the best of them to achieve financial security. I knew nobody was going to watch my back, so I had to watch my own. I didn’t even trust the government with its Social Security promises so I saved like a mad man every year since college.
If I was part of a labor union, I might still be happily working at my day job while working on my online endeavors at night. But, I’m happy now being free, so what’s the difference?
Readers, what are the pros and cons of a labor union in your opinion? Have you ever wished to join one? How do we know which one is better if we’ve never experienced both? Is a 100% pay cut better than a 25% pay cut given unemployment benefits?