Labor Union

C

Union Structure

In the United States, unions have a democratic management structure because union members elect the chief officers. These elections typically take place at the local unions or at a national union convention. Such elections must occur at least once every five years. Within this structure, unions vary widely.

The AFL-CIO itself holds a convention every two years. Delegates to this convention, who represent the affiliated national unions, elect a president to a two-year term. John J. Sweeney, former president of the SEIU, won election as president of the AFL-CIO at the federation's biennial convention in 1995 and has won reelection thereafter. An executive council supervises the day-to-day management of the AFL-CIO. This council consists of the president, executive vice president, secretary-treasurer, and about 50 vice presidents, most of them presidents of national unions affiliated with the AFL-CIO. The executive council plays a role similar to that of a board of directors in a corporation.

The UAW holds a convention every three years. Local unions elect delegates to this convention by secret ballot, and any member in good standing of the autoworkers’ union is eligible to run for delegate. The delegates elect the president, secretary-treasurer, and other officials for three-year terms. The UAW executive board consists of many of these elected officials.

Most of the power in the national union typically resides in the elected president. In many cases the union president acts as chief negotiator in bargaining with management. After a collective bargaining agreement is reached, it must receive approval by a vote of either the executive council or the entire union membership.

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D

Union Services

American unions collect dues from their members. Union dues average about 1 percent of a worker’s annual income. In 1997 members of the UAW paid 1.15 percent of their monthly income in dues—equivalent to two hours’ pay. Unions use these fees for a variety of purposes. The UAW, for example, allocates 38 percent of the dues to the local union, 32 percent to the national union’s general fund, and 30 percent to the strike insurance fund. The local and national unions use these funds for union activities and for paying organizers and other staff members who take part in collective bargaining and hearing grievances. The strike fund supports union members during a walkout or a lockout, when they receive no pay. During contract negotiations, a large strike fund helps convince employers that the union is prepared to strike, thereby strengthening the union’s bargaining power.

Local unions typically hold membership meetings at a regularly scheduled time and place. These meetings give members valuable information about working conditions and provide social opportunities. The local leadership can also learn about the grievances and concerns of the members. In many unions, these meetings are poorly attended. Within each unionized firm, at least one worker is chosen to act as shop steward or union delegate. These union representatives handle day-to-day grievances of their coworkers.

Membership in some craft unions requires completion of an apprenticeship while training to become a skilled tradesperson, such as electrician or plumber. After the apprenticeship the worker becomes an experienced journeyman. Craft union regulations typically limit the number of apprentices relative to the number of journeymen in the union. Apprentices typically face a different pay scale, earning 60 to 90 percent of a journeyman’s wage. Apprenticeship regulations serve to ensure proper training in the trade, but they also regulate entry into the trade and limit membership in the union. Because apprenticeship regulations limit the supply of workers, they increase wages in these occupations.

The United Association of Journeymen and Apprentices of the Plumbing and Pipefitting Industry has the oldest nationally registered apprenticeship program, with 17,000 apprentices in the United States and Canada. This apprenticeship program lasts five years and provides both classroom and on-the-job training. Each apprentice must obtain 1,700 to 2,000 hours annually of on-the-job training and at least 216 hours of related classroom instruction, including courses in mathematics and drawing.

Unions provide many other services to their workers, although the nature of these services varies greatly from union to union. Many unions offer low-cost credit cards and subsidized mortgage loans to their members. Some have scholarship programs for members and their dependents. Some union services help members advance in their careers. For example, the Amalgamated Transit Union, which covers many transit workers, assists members in obtaining commercial driver’s licenses.

V

What Unions Bargain For

Historically, unions in the United States have bargained for improved working conditions, particularly higher wages. Unionized jobs in the United States pay substantially higher wages than nonunion jobs, even after taking into account skill differences among workers employed in different establishments.

A

Wages and Benefits

Overall, the gap in wages between unionized workers and nonunion workers is about 15 percent in the United States, with unionized workers receiving higher wages. This union wage gap varies by skill level and changes over time. Unions tend to increase the wages of less-skilled workers by a larger percentage than they raise the wages of more-skilled workers because they have had greater success at organizing less-skilled workers. The union wage gap for low-wage workers averages about 30 percent; for high-wage workers, about 10 percent. During a recession (economic downturn), unions often help their members maintain a higher economic status than nonunion workers in comparable jobs, because the union wage gap typically tends to widen during recessions.

Economists argue that the impact of unions on wages extends beyond unionized firms for two reasons. First, so-called threat effects may lead nonunion employers to pay higher wages to keep workers satisfied and thereby lower the chances of a successful union organizing drive. Second, unions may have spillover effects on nonunion workers. If unionized firms layoff many workers in response to higher labor costs, these laid-off workers may enter the nonunion sector. This increase in the labor supply could then lower the wages of nonunion workers, according to the law of supply and demand.

Government regulations in the United States also ensure that the results of collective bargaining agreements are sometimes transmitted to the nonunion sector. For example, a provision in the Davis-Bacon Act of 1931 requires that workers employed in federally subsidized construction projects receive what is called a prevailing wage. The U.S. Department of Labor has typically interpreted the prevailing wage for such projects to be the union wage for construction workers in the locality. Economists estimate that the prevailing-wage provision increases the costs of these construction projects by as much as 25 percent, by increasing the wages of nonunion labor used in the project.

The collective bargaining agreement also has an important effect on the fringe benefits offered by firms. Fringe benefits include health and life insurance, vacation and sick days, pensions, and bonuses. The value of fringe benefits averages 20 percent of the wage in unionized firms but only 15 percent of the wage in nonunion firms. Because union workers earn more, they receive fringe benefits worth more than those received by nonunion workers.

B

Working Conditions

In addition to wages and fringe benefits, unions also bargain over hours of work and other working conditions. The eight-hour day formed an important demand of the early union movement in the United States, when many workers routinely put in 12-hour or longer days, six days a week. Today, unions and management routinely bargain over tuition remission (partial reimbursement of tuition fees), cost-of-living adjustments (increases in wages because of inflation), safety and health protections on the job, maternity and paternity leaves (paid or unpaid leave following the birth of a child), and various types of detailed work rules, indicating the tasks that a unionized worker can and cannot do.

In the absence of unions, workers do not have an established mechanism for informing employers of grievances about working conditions, wages, or other aspects of the employment relationship. If a single worker were to complain, the employer might respond by demoting or firing the worker. Nonunion workers typically register their dissatisfaction by “voting with their feet”—that is, by leaving the firm. Because unions give workers a recognized channel for airing grievances, labor turnover is lower in unionized firms. Collective bargaining thus leads to a more stable workforce.

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