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Public Sector vs. Private Sector - Essay Example

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One of the key differences between public sector and private sector collective bargaining concerns the structure and ways in which upper management receives pay increases. In private sector upper management, salaries are often directly related to their individual performance…
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Public Sector vs. Private Sector

As a result, they have a vested interest in seeing salaries rise for all employees.
Another essential difference in collective bargaining between private and public sectors is related to location and labor value. Unlike private sector companies, public sector institutions are not capable of threatening to relocate for lower-wage costs (Guyton 213). This is evident in education where in response to union strikes, schools cannot possibly outsource employment overseas, as companies like Nike and have done. However, unions are able to use statistics from surrounding areas to pressure public sector companies to raise wages.
Indeed union negotiations are one of the major distinguishing characteristics in private and public sector collective bargaining. Private salary disputes are restricted by the knowledge that customers are able to obtain products elsewhere, whereas in the public realm it is often difficult or impossible for patrons to go to the closet competitor (Boggs 9). Libraries are an example of this situation. The union representatives are often long-term officials who have experience in negotiations, whereas the officials they are dealing with are appointed or elected officials who often only spend short amounts of time in their positions. As a result, negotiations are somewhat slanted in favor of the public union representatives.
While labor relations in the United States used to be more highly shifted toward private sector employee union membership, major changes have occurred in the intervening fifty-years. For instance, in 1956 American private sector union membership was 34.7%, more than three times as much as the public sector rate of 11.1%. In 2006, public and private sectors were seen to undergo and drastic change as union membership had shifted from 36.2% in the public sector to 7.4%. for the private sector (Guyton 210).
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