Aaron Shannon

MC# 543

Issue 12: Do Unions Help Organizational Productivity?

The main thesis in support of unions is a view by Professor Harley Shaiken of the
University of California-Berkeley who is convinced unions are linked to higher productivity,
lower employee turnover, improved workplace communication, and a better-trained
workforce. Several arguments are given as evidence, namely economic growth, productivity,
product and service delivery and quality, training, turnover, solvency, workplace health and
safety, and economic development.
Between 1945 and 1973, wages increased with productivity. Many workers were
unionized in those days. After those years, wages fell behind as productivity increased. There
was definitely a correlation which they interpret as evidence that the lack of unions is the cause
of wage stagnation.
A recent survey is looked upon in which evidence reveals a positive correlation between
unions and productivity. An example is provided of nurse unions improving patient care
through the unions negotiation of staff-to-patient ratios, better training for nurses, and
reduction of unwarranted overtime. Unions reduce turnover by improving communication
between the employer and employees. Safer workplaces is cited as a benefit of unions. The
example in support of the argument is significantly less deaths in coal mining in the period of
1897 to 1929.
Some of the arguments in support of unions is based on work conditions in the past,
specifically about 40 to 120 years ago. Unions may have been very helpful in the past, but this
does not mean unions are necessary today, at least not in the same degree. Unions may be a

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MC# 543

shorter-term solution to problems between the employer and the workers, but there are better
long-term solutions which are taking place today. One day, unions may become obsolete
entirely. This idea will be expanded after the following review of the side against unions.
Dennis Berman is against the idea of unions helping organizational productivity. He
provides a single example of Chrysler. The companys liabilities are around $18 billion dollars in
relation to the costs of health-care and other benefits as brought about through union
negotiations. Or should we say union bullying? The payments have a terrible effect on company
profits. Chrysler had operating profits of $2.7 billion in the previous five years from the time of
Bermans writing, but after paying the liabilities to employees they had a net loss of $1.75
billion. Chrysler wants the unions to lighten up on their demands, but the union refuses. How
will the CEO convince unions to ease on their demands? The answer is yet to be seen at the
time of Bermans writing. The point he is making with the example of Chrysler is the negative
impact the unions are having on the company, and by implication, on many other companies.
The two sides of the issue address the benefits unions have had on some companies,
and the negative effects the unions have had on other companies. To reiterate the point made
earlier, unions are not the long-term solution to employer-employee conflicts. Some
alternatives to unions were mentioned, namely outsourcing, nonunion strategies, and
effective HRM practices. The long-term solution to be discussed briefly for the remaining of
this essay is Conscious Capitalism. This follows a stakeholder philosophy of maximizing value for
all major stakeholders and seeking Win-Win solutions through synergies rather than accepting
win-lose solutions through trade-offs.

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MC# 543

John Mackey, the co-CEO of Whole Foods Market, says, [L]abor unions primarily came
about because of the failure of businesses to care about their workers as human beings
[emphasis mine]. Mackey speaks on behalf of the company, Our belief is that if a company
does an outstanding job caring for its team members, creating value for them, and respecting
them as key stakeholders, it can successfully avoid unionization. He adds, A conscious
business knows that treating its people well is the right thing to do; it does not need to be
coerced into doing so. For businesses that already have labor unions, his advice is to engage
with them constructively rather than viewing them as adversaries.
Mackey provides Southwest Airlines as a great example of a company with a largely
positive win-win relationship with its unions. Former CEO Herb Kelleher says he maintained
good relationships with the unions by treat[ing] them like human beings. Former president
Colleen Barrett shared how all participants in the union and management were mixed together
during the meetings as opposed to being arrayed on opposite sides. The example exemplifies
how conscious leaders of conscious businesses should interact with stakeholders; one body
versus two bodies. Mackey tells a story of a time when unions tried to get a hold on the team
members of Whole Foods Market, but the company was able to defeat their attempts.
Unfortunately, space does not permit the story to be shared here, but companies which
transition to conscious principles and philosophies can maximize the value of employees
without the coercion of unions. Business has always been progressing overall rather than
regressing, and one day unions will likely become unnecessary and obsolete. Elsewhere in his
book John Mackey discusses conscious cultures and describes the need for love and care. We

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MC# 543

need to give permission, he says, for love and care to be expressed in the work setting as
qualities that are not taboo but encouraged and celebrated.

Works Cited
Rao, P. (2013). Do Unions Help Organizational Productivity? In Taking sides (2nd ed., pp. 188-199). New
York, NY: McGraw-Hill.
Mackey, J., & Sisodia, R. (2013). Conscious capitalism: Liberating the heroic spirit of business. Boston,
MA: Harvard Business Review Press.