Sunday, September 25, 2011

Collective Bargaining: Labor Unions

Economics perspective: Generally large employers(such as large corporations or the government) dictate how much employees get in terms of wages and benefits. To maximize profit, the less labor costs the better it is. So on one side there are employers attempting to keep costs as low as possible to make as much money as possible (extreme example are 'sweat shops') and on the other side are labor unions which seek to maximize the welfare of its members (i.e. a higher paycheck or benefits). Having logical and rational discussions are key to attaining balance between the two to help economic and social balance.

Definition of LABOR UNION
: an organization of workers formed for the purpose of advancing its members' interests in respect to wages, benefits, and working conditions

Here is a fuller explanation from a basic economics tutoring page (in this example they call labor unions, 'trade unions'):

Trade unions are organisations of workers that seek through collective bargaining with employers to protect and improve the real incomes of their members, provide job security, protect workers against unfair dismissal and provide a range of other work-related services including support for people claiming compensation for injuries sustained in a job.

The following link is to a video that illustrates today's sudden economic challenges and the contradictions to a balanced economic approach one particular solution brings to the table... Click here To Watch Video: Are Public Sector Strikes Always Right?.

As far as economic and social balance goes, Ronald Reagan phrased it appropriately when he said, "Where free unions and collective bargaining are forbidden, freedom is lost".

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