The Probable Effects of Globalization On Union Membership - Essay Example

 The globalization process is one of the most effective fundamental of today’s world. This factor is wide spread and irreversible. But to start with we must few specified definitions of terms that are to be used widely throughout the paper. Comparative advantage In economics, the theory of comparative advantage explains why it can be beneficial for two countries to trade, even though one of them may be able to produce every kind of item more cheaply than the other. What matters is not the absolute cost of production, but rather the ratio between how easily the two countries can produce different kinds of things. The concept is highly important in modern international trade theory. Comparative advantage may be compared to absolute advantage. When one entity (be it a company or a country) is able to produce more efficiently than another entity it has an absolute advantage: that is, assuming equal inputs, the entity with an absolute advantage will have a greater output. Bargaining Unit The bargaining unit is a group of employees with common interests who are represented by a labor union in their dealings with agency management. Prior to an election, representatives from management, the union and the Federal Labor Relations Authority meet to define the scope of the unit. One factor in defining the scope of the unit is that it must ensure employees the fullest freedom in exercising the rights guaranteed under the Federal Service Labor-Management Relations Statute. Further, a unit will only be considered appropriate if it will ensure a clear and identifiable community of interest among the employees in the unit and will promote effective dealings with, and efficiency of the operations of, the agency involved. Bargaining unit status (that is, whether the position is in or out of the unit) pertains solely to the employee's position in the agency -- it does not take into consideration whether the employee is a dues paying union member. As such, these are two distinct groups. Bargaining unit members are employees whose positions are included in the defined bargaining unit while union members are employees that pay dues to the labor organization. (Automatic payroll deduction of dues is commonly referred to as dues withholding.) Only employees within the bargaining unit can have automatic dues withholding. The globe doctrine Under the Globe doctrine the NLRB divides employees into separate groups for voting purposes without deciding the appropriate unit whenever the arguments pointing to one comprehensive unit are evenly balanced by the arguments in favor of separate groups. If a majority of any group votes for a union seeking to represent only the craft or department, the craft or departmental unit is found appropriate. If a majority of the group vote for the industrial union, the NLRB holds that they should be part of the comprehensive unit for the purposes of collective bargaining. Thus the desires of the employees are said to prevail. Appropriate bargaining unit The purpose behind the concept of the "appropriate bargaining unit" is easy to state: it is "an effort to inject a public policy component into the initial shaping of the collective bargaining structure, so as to encourage the practice and procedure of collective bargaining and enhance the likelihood of a more viable and harmonious collective bargaining relationship" The effects of globalization on union membership The term “globalization” is now occupying center stage in contemporary economic, social and political discourse. It is being projected as a phenomenon which has grave portents for the continued existence of the trade union movement and it is therefore necessary that the members of trade unions, including the rank and file, have a clear appreciation of its meaning and implications. The term has only recently been popularized, and there is a sense that the phenomenon has suddenly become an issue in academic, intellectual and popular discourse. It may well be true to say that prior to the 1990s,Caribbean trade unionists would not have focused significantly on globalization as a phenomenon in their teachings or even in their strategizing and planning on behalf of their membership. Yet, to the extent that emphasis was placed on explaining the economic history of the region, and of the world, in locating the birth and struggles of the trade union movement for existence, emphasis would have been placed on describing the economic foundations of globalization. Globalization is a creature of the thinkers, entrepreneurs, manufacturers and policymakers of the dominant countries of the world. Much effort has been extended in developing a paradigm shift, in forcing the mass of people into observing the reality of their existence from an alternative viewpoint. Few now see socialism as a path for human development, and most are convinced that the market is the mechanism for advancement. Underdevelopment in former colonial territories can no longer be blamed on the colonial masters but must be seen as the fault of the colonials, who no longer require aid and assistance. The demography of labor unions are far and wide spread. The impact of liberalization on employment and wages are massive. A study in Indonesia and Chile reveals this phenomenon. This study divides the study period into two: the period 1991 to 1996 which is the reform period, and the period 1997 to 2000 which is called the crisis period. 1997 marks the genesis of the crisis currently afflicting the Zimbabwean economy. It is the latter period that is used to demonstrate how government commitment can affect the result of economic reform. The hypotheses of the study are entrenched in neoclassical economics which forms the foundation of orthodox economic reforms. It is envisaged that labor market liberalization results in employment and wage flexibility that enhances firms’ competitiveness. Such flexibility also results in employment growth. Structural adjustment, through expenditure switching, improves labor market efficiency by causing labor to shift from non-tradable goods to tradable goods. This should improve the foreign currency position of the country. Through expenditure reduction, the reforms result in public sector restructuring in order to reduce fiscal deficits. It is also anticipated that labor market reforms should culminate in allocative and dynamic efficiency gains. The state is expected to reduce its role in the economy and to make laws governing the conduct of economic activities. Following these assumptions, the study argues that in planning, the labor market must form an integral component of policies, given the role it plays in redistribution, increasing productivity, and raising national standards of living. It asserts that active labor market policies that set minimum conditions yield more superior outcomes than passive policies that leave everything to market forces. It argues for the protection of minimum conditions of employment and income security. It further states that the government is a potent player in the power dynamics of the nation, and any policies that may adversely affect its existence may be sacrificed. Structural adjustment policies are entrenched in neoclassical economic theory. They envisage that macroeconomic problems like balance of payments deficits, high inflation and budget deficits characteristic of many developing countries are caused largely by inept domestic policies and unnecessary interventions in the market. The resolution of these problems is viewed as possible through concretionary demand policies which include fiscal austerity, exchange rate devaluation, and market liberalization. Liberalization is aimed at attaining the right prices operating in the economy through allowing the operation of market forces to attain efficiency. It is argued that governments meddle too much in economic activities and cause inefficiencies. Thus governments should reduce their involvement, implying they have no business in business, but in making laws and regulations that make business transactions flow smoothly, hence improved efficiency. In the labor market, this efficiency is achievable through allowing employment and wage flexibility so that the demand for labor responds to changing economic conditions. Flexible wages are assumed to clear involuntary unemployment. This theoretical analysis treats the labor market like a goods market where the equilibrium price is established through the interaction of supply and demand. Any excess supply of or demand for labor will be eliminated through wage adjustments. Under such conditions, there will be no involuntary unemployment, and where it exists, it is because wages are inflexible. Such analysis results in the conclusion that the state should not interfere in the labor market, but should liberalize it and let wages fall to the ‘right’ level that clears the market. The World Bank (1981) contended that distortions in the developing countries’ labor markets resulted in capital intensive production processes which did not reflect the economies’ labor abundant status. Debate on the efficiency and/or inefficiency of interventions in the labor market has been raging on since the 1980s. The debate gained major impetus from the publication of the UNICEF Report in 1987 which challenged structural adjustment’s neglect of social issues. The development of the debate took a dichotomous institutional perspective. One group consisted of researchers who supported the international financial institutions’ view that market forces give superior employment results. This group called for non-intervention in the labor market. The other group consisted of researchers sensitive to the UNICEF Report who supported the International Labor Organization’s view that given the existence of market failures in resource markets, including the labor market, government intervention is necessary to establish minimum conditions for employment. The World Bank (1990) reiterated the non-interventionist perspective by expressing that rigidities in the labor market like job security regulations raise the cost of labor and reduce its demand, thus resulting in high unemployment, expansion of the informal sector, and increasing poverty. On the contrary, the ILO (1991) envisaged intervention through tripartite dialogue as critical for economic development, which is further strengthened by the ILO conventions. It also envisages support to the informal sector to enhance its employment creation capacity. These contradictory views result in different policy prescriptions. The Bank’s ‘distortion’ view claims that interventions result in employment failing to adjust to economic shocks. It argues that economic policies that protect employment in the face of economic decline result in more pain to enterprises, and worsens the recession, but says nothing about the pain to workers. Thus asserting that employment protection has efficiency costs is in a way selective and incomplete use economic theory. Nevertheless, Fallon and Lucas (1991) found the impact of labor market interventions to be perverse in India and Zimbabwe. They observed that strict employment protection significantly reduced the level of employment growth. The strength of unions is also viewed as a source of labor market inflexibility. Advocates of non-intervention therefore call for the weakening of unions to facilitate flexibility. Reference: Carrell, Michael R. & Heavrin, Christina. Labor and Collective bargaing Text 7th edition. 2004 California Public Transit Labor Relations Guide The California State Mediation & Conciliation Service. Department of Industrial Relations. October, 2005 Hospital for Sick Children [1985] O.L.R.B. Rep. Feb. 266. Read More