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Business Management: Union Power

Some observers feel that unionism or the right to strike gives public employees excessive power. Do you believe the public sector unions actually have more power than private sector? How does public sector collective bargaining differ from private sector bargaining? In which would you prefer to be a member?

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According to Sunshine Review (2010) laws governing public employee unions and collective bargaining in the public sector (all levels of government, including local school districts) are often modeled on similar legislation governing collective bargaining between unions and private companies; similarities exist, but the following differences are important to recognize:

1) Public sector managers have almost none of the financial incentives of private-sector management to minimize labor costs; private sector managers are likely either to own stock in their firm or know that their own paychecks depend on negotiating a cost-effective deal; if anything, public sector administration (e.g. school superintendents) have incentives to see their subordinate employees paid as highly as possible because their own and their immediate staff's salaries tend to rise in tandem with those of their unionized employees;

2) In public sector bargaining unions have advocates on both sides of the table; that is, elected officials may own their own positions to support from unions; according to this source, they themselves or members of their immediate family may be union members; for example, Pennsylvania laws bar school board members who are also union members from participating directly in union contract negotiations, but does not bar them from voting on any resulting contract;

3) Unlike private firms, public agencies cannot move to threaten their operations to areas with lower labor costs; for example, according to this source, unlike private firms, public agencies cannot move or threaten to move their operations to areas with lower labor costs; for example, a school board cannot outsource its operations to a neighboring school district, much less to a non-union state or offshore; in states like Pennsylvania, for example, where public employee strikes are legal, teacher unions can strike without having to fear anything like a manufacturing plant closure; on the contrary, teacher unions can point to higher levels of salaries and benefits in any nearby area as a reason why their own employees should be paid more, not less;

4) Unions ...

Solution Summary

This solution provides a detailed discussion of union and power.