THE BLOG

Unions and Corporations: Failing to Unite, United to Fail

09/10/2013 01:20 pm ET | Updated Nov 10, 2013

Labor Day and the recent minimum wage demands by employees in the fast food sector have put unions in the news. With the drop in union membership and stagnant or dropping wages for 93 percent of Americans, now is the time to discuss the role of unions in the future.

Unfortunately, rather than having substantive discussions about how effective unions actually make companies more profitable while rewarding employees with a greater share of record profits, we get mired in nugatory rhetoric such as the wages of union leaders.

The reasons those who oppose unions think the salary of top officials is important is: 1) they believe there is little return on investment for union members and because 2) they misunderstand the union members' goals.

Contrary to popular belief, union members aren't communists who think everyone must make the same wages. So the fact that a union leader like Jimmy Hoffa makes $300,000 to 400,000 a year to run an organization with 1.3 million members doesn't seem too exorbitant considering that this works out to $0.31 per year per member. Especially considering the $10,000 or so per-year advantage union members have over non-union workers.

Although some union bosses make 10 times as much as their average member, that is small potatoes when compared with the average CEO who makes 273 times as much as the average worker. And when compared to the $131 million in compensation McKesson Corporation CEO John Hammergren made for company with 43,500 employees or $3,011 per employee, spending a few bucks a year to have an organization fighting for your piece of the pie doesn't seem so outrageous.

While many question the value of labor unions, those same questions don't seem to exist when it comes to industry trade unions like the Chamber of Commerce and American Petroleum Institute whose CEOs make $4.75 million and $6.4 million respectively. Their goals of "representing the interests" of their members and giving them a "voice" are no different than that of labor unions -- but since they represent businesses instead of the working class their contributions are somehow more meaningful.

Unfortunately, both union leaders and corporate management have become greedy. Rather than focusing on how they can work together to increase productivity, boost profits and expand the company, they concern themselves with power and money. This obsession has many good CEOs cooking the books and ultimately destroying their companies -- all to appease stockholders. It also leads to a jobs bank program that pays employees not to work.

In an ideal world all companies would value their employees enough to create a safe workplace, provide good benefits and share in the success of the company. And unions would make the companies goals their goals. But rather than seeing the upside of cooperation, both sides have turned the corporate/union relationship into an adversarial one. The truth is both entities want the companies to succeed and until we start seeing corporations and unions as two sides of the same coin, we will continue to fight a useless rhetorical war where union leaders pay is inexplicably considered an important talking point.