Unions And Corporations: Failing To Unite, United To Fail

Labor Day and the recent minimum wage demands by employees in the fast food sector have many talking about labor unions. With the drop in union membership and stagnant or dropping wages for 93% of Americans, now is the perfect time to discuss the role of unions moving forward.

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 reason that those who oppose unions think the salary of top officials is important is first because they believe there is little to no return on investment for union members and second because they misunderstand the goals of union members.

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 $300,000-400,000 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 for each 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.

And while many question the value of labor unions those same question don’t seem to exist when it comes to industry trade unions like the Chamber of Commerce and American Petroleum Institute whose CEO’s 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 too 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 CEO’s 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 completely useless rhetorical war where union leaders pay is inexplicably considered an important talking point.

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