Labor Day, the second bookend of the traditional summer season, is a national holiday that celebrates America's workforce, the people whose blood and sweat have helped to build our country into a great nation. Holiday parades will feature members of organized labor marching down city streets to be recognized and applauded.
Today, the value of unions is increasingly being called into question, including by college professors in the classroom. Unions are seen as out-of-date and unnecessary; by some they are characterized as the source of all evil and the reason for every problem in the business world. Why are unions seen in such a negative light? The answer is complex. It is important for business students to understand the issue from both sides. On the one hand, unions have historically provided positive outcomes to members through collective bargaining agreements. Members earn higher wages and better benefits than similar nonunion workers. In the public sector, however, these superior union-negotiated health and retirement benefits can threaten the government's fiscal health. This is being seen across the country as governments grapple with soaring pension liabilities and declining credit ratings. Additionally, union contracts include grievance procedures that reduce management's ability to treat workers arbitrarily -- such as firing someone without just cause.
Given the opportunity to enhance your wages, benefits and job security through a union, one would think the normal sentiment of people to be, "Where do I sign up?" But that is not the case in the United States. Union membership has plummeted from its peak of 35 percent of the workforce in the 1950s, to today's unionization level of about 11 percent. Employers, including leading business associations such as the U.S. Chamber of Commerce, have opposed unions and many companies have adopted policies intended to forestall unionization. Various interest groups have attacked unions and encouraged states to roll back public employee bargaining rights or to pass "Right-to-Work" laws, which prohibit collective bargaining agreements from requiring workers to pay union dues.
It is not unusual for faculty in business schools and other university programs, such as economics and hospitality management, to suggest that unions are "bad" and give such reasons as unions reduce efficiency, inhibit change, restrict employers' ability to manage the workforce and even that unions are sometimes connected with organized crime (references to Jimmy Hoffa's demise sometimes follow).
Union supporters point out that in recent years, ordinary workers have faced wage stagnation, while company bosses have received generous salaries and a growing list of perks unavailable to subordinates. Thomas Piketty's book, Capital in the Twenty-First Century, has ignited a firestorm by suggesting that increasing inequality threatens society. Despite the growing inequality, unions have failed to generate political support to change labor laws in ways that would help workers and promote more equality. I've always found this interesting. I believe that it is connected with the general desire of Americans to support entrepreneurship and innovation. But why do workers support a theoretical view over a pragmatic approach that would put more money in their pockets?
My purpose in this entry is not to answer the question. There are hundreds of studies that have looked at the issues associated with unions and their effects. Many show that outcomes vary across public and private sectors and nations. In coming years, more studies will be cited as governments, politicians and activists continue to debate ways to reduce costs in the public sector. The question will continue to be complex and controversial.
Instead, on this Labor Day holiday, I humbly ask readers to reflect on the collective efforts of working people across the nation to build our country, to create profits and successful projects for their employers and to earn a decent living. Indeed, I believe that across the world, in every nation, people show a willingness to work in order to earn a decent living. In other blog entries, I've mentioned the necessity for business schools to excel in their job placement efforts. We must emphasize placement because an education is irrelevant if it does not provide an opportunity to earn a living. This view is received positively by parents and students, and, at my school, it is driven by our overriding concern to make future generations better off. Carrying out this value provides what our students require -- and what people desire around the world.
This brings me to a quote from legendary Pittsburgh Steelers coach Chuck Noll, which I believe is relevant to business students and schools on Labor Day. "Champions are champions," he said, "not because they do extraordinary things but because they do the ordinary things better than anyone else." This speaks to the value of taking pride in hard work and having the will to succeed -- two values that were shared by the workers whose labors helped mold the United States into a world power.
As much as the news media seeks to point out instances in which working people have failed or fallen short, time and again I have seen the good created by hardworking people. They don't seek glory or recognition beyond knowing they have done commendable work. They display values that some say have vanished. The lesson is that business schools must ensure students get a dose of those values so that they will practice them and understand that most workers strive to do the same.
Thank you to all the workers, yesterday and today, who have contributed to the greatness of our nation.