Labor Management Relations Labor management as a definitive term spans over the centuries. Despite the age and issues presented over the years, labor management and, more pointedly, unions continue to be the subject of great debate in today’s business and government environments. As workers and union representatives remain in the forefront of corporate debates over workers rights and wages, one must question how effective labor management relations are today. Unions present the opportunity for workers to have a representative voice; however, as history proves, unions also present the opportunity for union heads to fulfill self-serving agendas that offer little, if any, respite to workers. As such, this paper examines the history of labor management relations to set the stage for included discussion on current labor and union issues to determine how beneficial unions are and whether they do more harm than good in protecting workers’ rights.
History
Von Otter defines labor management relations as being related to “the rules and policies which govern and organize employment, how these are established and implemented, and how they affect the needs and interests of employees and employers” (np). Labor management relations involves both industry and economics and often encompasses strategic human resources. However, not all sectors of business, economic and social environments “work” well together as history has proven. The world economy experienced massive growth in the twentieth century with a significant portion of growth recognized after World War II. The economic growth in the United States impacted the world economy and the relationship between labor and management and productivity became a major focus at national and international levels. Despite massive economic growth in the twentieth century, however, the U.S. and other world economies saw a major decline with the turn of the twenty-first century. To regain a strong economic foothold, nations, specifically the U.S., must deal with the poor management practices it has become accustomed to both presenting and receiving and seek practices that not only fit contemporary issues but also work to strengthen a seriously weakened economy and a disgruntled American public. To understand how labor management relations has failed, one must understand its history and thereby draw from the strengths of historical practices and implement new practices that improve relationships between employees and employers, increase productivity, and put the national economy back on track for sustained growth.
After World War II, industry was booming with new products and ardent efforts to bring to market the products and services people wanted and needed. The war had left its mark on the world economy with the U.S. relying on a capitalistic way of managing labor and economics. Under the theory of capitalism, the U.S. utilized multiple management practices akin to Fayol’s centralization principle (Rodriguez). Initially, the practice is progressive management principles was strong and exerted great power within organizations—sometimes too much power. The downside of the post-World War II management principles, however, was that the practices asserted tended to give the government too much power as it was considered the primary manager over business. While the U.S. experienced the power struggle less than some other capitalistic nations (i.e. Western European countries and Japan), this fact did little to stop the economic and social decline recognized at the turn of the twenty-first century.
For more than 200 years, workers in all industries have fought for improving their standards of living by simultaneously fighting to improve working conditions, wages and job security. The “higher wages”, “shorter workdays”, and “better working conditions” workers demanded in the 1790s resulted in the realization that by working together workers they would present strength in numbers and would be more likely to get responses to their demands (“A Short History of American Labor”). This marked the birth of the labor union, a “group of workers who have banded together to achieve common goals in the key areas of wages, hours, and working conditions” (Boone 400). Labor unions were divided into two types: craft and industrial unions.
Craft unions restricted membership to workers who possess an identifiable skill as these members were often better educated, had some training, and were more unified due to common interests (i.e. United Food and Commercial Workers International Union), whereas industrialized unions were comprised of members with diverse backgrounds and skill sets but worked for the same industry (i.e. United Steelworkers, United Autoworkers) (Biggs). Founded in Philadelphia in 1869, the Knight of Labor became the first national workers union. The organization initially operated in secrecy, which hindered the union’s growth potential until the railroad strikes that sparked interest and resulted in more than 700,000 members in 1886 (Filippelli). During the height of the union’s reign, it was responsible for pushing legislation that subsequently led to the end of convict-made goods, the establishing of the Bureau of Labor Statistics, and the prohibition of importing contract labor from Europe. By 1890, however, membership declined to about 100,000, continuing until the union was no longer active. Some believe the decline to be a result of ineffective national leadership, opposition from existing craft unions, and the loss of major strikes (Filippelli).
Formerly named the Federated Organization of Trades and Labor Union in 1881, the American Federation of Labor (AFL), formed in Columbus, Ohio in 1886, was comprised of affiliated, individual craft unions and overseen by its president Samuel Gompers (Boone). Unlike preceding union heads, Gompers’ objective was to increase wages and improve working conditions (Dessler). Initially, the formation of the AFL yielded significant improvements for workers and instilled what, for the period, was seen as progressive management. The United Mine Workers union was formed in the early 1890s, becoming the first major U.S. industrialized union (Filippelli). By the turn of the twentieth century, organized labor had experienced a serious defeat in a strike at Homestead, Pennsylvania, after which the Amalgamated Association of Iron, Steel, and Tin Workers was eliminated (Filippelli).
In 1905, the Industrial Workers of the World (IWW) challenged the AFL by inviting unskilled and semiskilled workers the AFL had denied, resulting in a significant increase in members and the IWW being a leader among unions which lasted from 1910 to 1915. However, as the IWW’s efforts waned, the AFL presented challenges of its own and allowed unskilled workers into craft unions. By the middle of World War I, the IWW has disappeared while other unions whose primary industries involved war production thrived (Filippelli). President Woodrow Wilson influenced some of the unions’ decisions as Wilson pushed government contractors toward unions and collective bargaining, including his efforts to ensure railroads were operated by the executive branch of the U.S. government. Wilson is further credited with the formation of the National War Labor board, which also resulted in fewer strikes related to labor reaction of the rising inflation in 1917 (Filippelli).
With the war over and inflation on the rise, the start of the Great Depression was being felt. By 1929, millions were unemployed. Before the depression, many viewed business executives as leaders and union members as “dangerous radicals”. However, when Americans realized these big leaders could not overcome the depression their views shifted toward the union. As the people pushed for change, the powers that be heard their demands and, in 1932, the Norris-LaGuardia Act was passed. The act favored labor unions and removed many rights employers had, such as decreasing management’s ability to obtain an injunction; to stop union activities, to stop strikes, picketing and membership drives (Boone). Further, the act afforded workers the right to collective bargaining that was free from interference, restraint, or coercion (Dessler).
In 1935, the National Labor Relations Act (Wagner Act), designed to encourage and protect workers’ rights, was passed, adding to the Norris-LaGuardia Act by banning certain unfair labor practices and including provisions for secret ballot elections and majority rule for determining whether employees were to unionize (Dessler). The same year, the Committee for Industrialized Organization (CIO), consisting of individual industrial unions and with the focus on industries as whole, was formed. Like other organizations before it, the CIO was successful and posed a significant challenge to the AFL.
When the U.S. entered World War II, in 1941, union membership increased. Despite the government’s freeze on wage increases, it did allow benefits such as paid vacations and holidays, company-financed hospital insurance, and retirement pensions. With the economic benefits of war production industry, the U.S experienced massive economic growth. More blacks were employed during the war and union memberships among blacks increased, resulting in a spike in CIO memberships. However, the CIO’s open policy for blacks sparked controversy with the AFL (Filippelli). After the war ended in 1945, wartime regulation were lifted and unions regained their foothold in the fight for workers’ rights, specifically the fight to regain wages workers lost during the war—a fight that sparked nationwide strikes and subsequently resulted in the 1947 Taft-Hartley Act (Labor Management Relations Act) that prohibited unfair union practices and listed the rights of employees as union members and employer rights (Dessler).
Under the Eisenhower administration, the Republican party took majority control over Congress. Despite the history of the AFL and CIO as enemies, the two organizations drew closer and worked together to promote the Marshall Plan (promoted assisting in the rebuilding of Europe) and the United Labor Policy (Filippelli). In February 1955, the AFL and CIO merge to become the AFL-CIO. As unions gained power in the 1950s, union leaders were believed to be engaged in unethical practices, a suspicion that sparked an investigation led by Senator John L. McClellan (Arkansas) that revealed the leaders of the Teamster Union were taking union funds and that many leaders were also linked to organized crime. McClellan’s investigation resulted in the 1959 Landrum-Griffin Act (Labor Management Reporting and Disclosure Act, also considered an amendment to the National Labor Relations Act), designed to protect union members from the actions of their unions (Dessler). Under the act, unions were required to hold regular and scheduled elections of union officers where elections were by secret ballot and to include a bill of rights for members, the latter being in response to the efforts imparted by Senator John F. Kennedy (Boone). The act afforded members freedom of speech and control over union dues, among other rights. Further, unions were henceforth required to report financial information to the U.S. Secretary of Labor (Boone).
By the 1960s and 1970s, labor management and related laws changed to include federal, state and local government employees, health care workers, and workers in higher education while the number of public employees rose, the willingness to join unions increased, and unions shifted to a more traditional approach to collective bargaining (Filippelli). In the 1960s, unions reached four-year colleges and universities and by the 1970s had reached 30% of all four-year public institutions (Filippelli). By the 1980s, unions were experiencing a decline that some believe is linked to President Ronald Reagan’s 1981 firing of striking federal air traffic control workers. Because the strike resulted in losing the jobs for which they were fighting, members began to see the current union structure as ineffective. While unions saw an increase of white collar members, they faced continued loss of blue collar workers, which impacted the unions’ bargaining power (Filippelli). While there were significant changes occurring in the traditional unions, the 1980s saw rapid growth of government unions, particularly as new laws allowed organization and elementary and secondary education teachers, college professors and federal employees were able to join unions such as the newly formed American Federation of State, County and Municipal Employees, the American Federation of Teachers, and the National Education Association (Filippelli).
Discussion
Having examined the history of unions and labor management one can see advantages and disadvantages for workers. The major issue, however, tends to be related to ineffective union leadership and management’s failure to advise members on areas that could put their jobs in jeopardy. Clearly, many benefits exist, including the formation of unions to protect the rights of public workers who were previously excluded from participation (i.e. educators and some federal, state and local employees). Another issue that added to the controversy with some unions is the corruption that spread in the 1950s, specifically that of the Teamster Union and its link to organized crime. As such, it is equally important to examine current union issues to determine how effective unions are in protecting workers’ rights today and to uncover possible areas when labor management relations can be improved.
Reporting on outcomes from the 1990s, Dessler reveals that union members tend to earn higher wages and receive better benefits than non-union workers. Further, unions are intended to project all members but research reveals certain socioeconomic groups receive better benefits than others. For example, Filippelli reports that Ohio workers in lower paying jobs, minority workers and women tend to receive wages that work toward closing the gender, education, and race/ethnic gap. Some union members without a high school diploma earned $11.20 per hour compared to the $6.50-$8.75 per hour earned by non-union workers (Filippelli). Among workers in the same jobs, union males earned, on average, $2.50 more per hour than non-union males while union women earned an average $3.50 per hour more than non-union females. Union workers tend to have increased job security due to the workers’ rights instilled by unions and enforces by effective leaders (Filippelli; Hills). Further, union workers not only reported higher wages but also experienced more equal and fair treatment than non-union workers. A disadvantage, however, is that the data points toward an imbalance where men tend to receive lower benefits that women and minorities receive better benefits across the board. In this sense, there is an overall imbalance in how the union serves its collective members.
Recent news reveals ongoing debate over workers issues and how effective unions are in managing their rights, particularly when “neutrality agreements” are involved (The Washington Post). In general, a neutrality agreement exists when an employer chooses to remain neutral during specific union-organizing events but may grant access to company grounds or lists of employees (The Washington Post). As part of the agreement, the union may forego the right to strike or support other matters important to the company (The Washington Post). While this type of agreement sounds unconventional, such agreements have been used and “have been found lawful by several federal appeals courts” (The Washington Post para. 4). However, in a recent Florida case (Unite Here Local 355 v. Mulhall), the U.S Court of Appeals for the 11th Circuit found the neutrality agreement “violated a section of the Labor Management Relations Act [that] forbids an employer to ‘pay, lend, or deliver ... any money or other thing of value’ to a labor union seeking to organize the company’s workers” (para. 5). While the Florida company may be attempting to show “good faith” in remaining neutral, the action actually illustrates inaction whereby the company is essentially turning a blind eye to the issues at hand and, it seems, waiting it out—a practice that deters any sound labor management practice as it only prolongs the inevitable and puts the company’s productivity in jeopardy. However, Justice Stephen Breyer dissented Unite Here Local 355 v. Mulhall and was quoted saying, “Unless resolved, the differences among the courts of appeals could negatively affect the collective-bargaining process” (The Washington Post para. 11). Issues such as those cited in Unite Here Local 355 v. Mulhall, the reverse imbalance between genders and minorities, and the obvious flaws in the ways some unions oversee members and members rights have led some to push for deunionization. According to Schneider and Stepp, many private sector employers have moved toward deunionization. The authors explain that “they often strategically divest or close their older, less efficient union facilities while carefully selecting greenfield sites for new capital investment, in which new employees, management, and work systems virtually ensure the maintenance of a nonunion workplace” (Schneider 4). However, the authors further explain that instead of deunionizing, employers can adopt the new labor management model where partnerships are developed across a range of industries and unions. As the partnerships are developed, employers benefits from improved competiveness and a strong future for collective bargaining. Interestingly, of 56 unionized manufacturers surveyed that deunionized or developed cooperative relations, companies that engaged in joint relations reported a 29% increase in value added per employee while deunionized employers reported a 15% decline (Schneider 4).
Conclusion
Labor management relations has a long and tumultuous history from massive success to decline to infiltration by corrupt leaders. However, as the history timeline reveals, any national economy and its respective operating industries will experience periods of increase and decline where the strength of one’s labor management policy is determined by the effectiveness of those overseeing workers and their respective rights. Unions and labor management laws have progressively improved working conditions and mandated fair wages and benefits for workers across all industries. While some employers experienced negative issues that led to deunionization, the majority of those who ousted unions came to realize that when led effectively unions work for the collective benefit of both the worker and employer as a satisfied worker who is secure in his or her position is more productive; hence, the company will be more productive.

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