Labor Unions: A New Perspective

Here are two clips from a thought-provoking article in Business 2.0 about rethinking labor unions. It says maybe we got the picture wrong and need to look at the issue differently. Could that be?

"There's one word that never fails to raise the blood pressure of my friends in business: unions. In the minds of many executives, organized labor is the archenemy of the basic prerequisites for business success -- flexibility, efficiency, and a relentless emphasis on results. Yet while that may be the conventional wisdom, my job is to provide managers with the information they need to make better, more profitable decisions. And I'm here to tell you that the evidence on the role unions play in the workplace belies many common preconceptions."

"What about unions' impact on profits? Generally speaking, the evidence shows that unions cost nothing. Yes, they raise direct labor costs. But on balance, the higher wages paid to unionized workers are offset by productivity benefits that come from having a higher-quality and more stable workforce, so the net effect on profits is essentially zero."

Source: Business 2.0 Magazine (Paid subscription required).